Project management doesn’t come cheap—it takes up to 20% of the overall project budget. Running a project without solid management, or bad project management, however, will do more harm than good.
That’s why we’ve put together the most important project management statistics to help you paint a clearer picture of the PM performance rate but also understand why projects fail, what factors are crucial to success, and more. So, read on to learn all about project management, and most importantly, why you can’t afford to overlook this process.
The percentage of projects that fail is fairly high—a whopping 70% of all projects fail to deliver what was promised to customers. The implementation of a management process, however, is shown to reduce the failure rate to 20% or below.
Project management statistics show that in 2018 organizations that overlooked the PM process reported failure of half or more of their projects. This means huge financial losses, along with potential missed business opportunities and lost clients.
Nearly every 10 seconds, $1 million is wasted by companies worldwide as a result of the ineffective implementation of business strategy. This results in approximately $2 trillion a year.
The latest project management stats show that 58% of organizations fully understand the value of implementing project management as a way to achieve better performance. This means that 42% of companies undervalue the importance of project management as a crucial component for project success.
Undoubtedly, robust project management improves the chances for success, drives cost-saving, and risk reduction. The Pulse project management statistics show that high-performing organizations with proven PM practices in place have met their original goals 2.5 times more often (89% vs. 34%).
Investing in proven project management practices reduces wasted financial resources by 28 times. This reduction comes as a result of successfully completing a larger proportion of their strategic initiatives.
Setting clear goals helps you to track the milestones and the progress, giving you a clear picture of where you are at the moment. Thanks to this data you can make some tweaks or reinforce the practices that benefit your end goal.
IT project failure statistics show that 75% of respondents think their projects are always or usually doomed to fail from the start. Out of this 75%, 27% constantly feel this way. At the same time, the majority of respondents (80%) have admitted to spending half their time reshaping the projects.
As software project failure statistics show, the lack of alignment of projects with the business objectives is the reason why nearly half of the strategic initiatives fail. The lack of alignment results in less organizational agility which leaves businesses unable to reach strategic shifts in customer demands, leverage the expected economic growth, and mitigate losses.
Over half of project managers consider budget overruns the main reason for project failure. This is often due to unforeseen events that go beyond human control. Reducing cost overruns systematically, therefore, should be a priority for project managers. Proper planning and good software can help with this.
Construction project failure statistics show that over 50% of construction project owners worldwide (and 61% in the US) have seen their projects failing despite the confidence in project planning and controls. They have further reported that only 31% of their projects were delivered within 10% of the budget and 25% within 10% of the original timeframe.
Effective project sponsors provide consistent engagement and support which is crucial to project success. 41% of underperformers and 17% of high performers report inadequate sponsor support as the main reason for failure, according to project management failure statistics.
Organizations with a higher percentage (more than 80%) actively engaged sponsors to have 40% more successful projects than organizations with a lower percentage of projects (less than 50%) with sponsors.
The attempt of Coca-Cola to introduce New Coke in 1985 is one of the most popular poor project management examples. Instead of conducting in-depth marketing research, the team administered more than 200,000 taste tests to confirm that the subjects liked the taste of New Coke more than the classic one and Pepsi. As it turned out, consumers hated it and Coca-Cola learned a very important lesson — every project needs proper management.
By the end of 2020, approximately 15.7 million new project management roles will be created. Along with the job growth, the demand for PM skills will grow significantly and the project management industry size is slated to grow by $6.61 trillion.
Project management facts show that the adoption of PM software remains low despite the fact that 77% of high-performing projects use it. At the same time, 55% of organizations don’t have access to real-time KPIs. The result is spending more time manually assembling project reports. These stats highlight the huge productivity gains offered by the best project management software.
Between 2017 and 2018, the number of organizations that use spreadsheets for project management has significantly dropped. These companies have moved to specialized PM tools and software, as indicated by management statistics.
Despite the relatively low usage of project management software, these systems will become indispensable as corporations increase in size and complexity, simplifying the management of workload, resources, and budget. The growing trend of the PMS market will continue to grow, reaching 10.17% CAGR between 2020 and 2025.
Current project management stats put Microsoft Project on the throne. With a 22.74% market share, this project management software product is the absolute industry leader. Jira follows with 19.50%, while Trello comes in third with 5.51%.
The only way that goals can be met is through the use of effective processes and techniques. Consistent practices reduce the risk and lead to better results which is why the majority (93%) of organizations use standardized PM practices throughout.
Project management statistics show that 73% of organizations that use formal project management approach always or often have met the goal or intent. 63% have completed the projects within budget and 59% have delivered the projects on time.
By comparison, only 58% of organizations that rarely/never use formal PM methods have met the initial goals, 48% complete the projects within budget, and 43% have delivered the projects on time.
Project management facts show how good high performers are at choosing the approach that fits best their needs. 44% of the high performers use predictive approaches, 30% use agile methods, while 23% leverage hybrid approaches. Only 4% of high-performing organizations use other methods.
According to time management statistics, project managers are crucial to project success. If you try to do everything by yourself, you could see a productivity drop by 40%.
High-performing organizations recognize the benefits of project management training. 81% further prioritize the development of project management technical skills and 79% prioritize the development of project management leadership skills. The project management statistics for low performers in these areas are 34%, 13%, and 11%, respectively.
Firms will continue to focus on PM performance improvement to stay competitive and relevant. Accordingly, the need for skilled, trained individuals will continue to grow and by 2027, 87.7 million experts will be working in PM-oriented roles.
According to project management success statistics, the project success rate has been improving over the years. In 2016, 62% of projects met the original business goals and only 50% were completed within the set budget. In 2018, these numbers went up to 70% and 60%, respectively.
60% of respondents point to poor resource management as their biggest challenge. Other issues included poorly trained project sponsors (33%) ineffective PPM solution deployment (30%), and lack of governance (26%).
Management statistics show that the most critical process to project success is stakeholder engagement. Roughly 50% of the respondents say so. Risk management comes in second with 40%, followed by planning with 35%, and resource management with 25%.
A sponsor is an important factor for project success. They aim to provide direction, address specific issues, secure project resources, ensure that the project is on time and on budget, and more. Without such guidelines in place, projects are much likelier to fail.
Risk management is one of the most widely adopted practices. Project management statistics show that almost a third of organizations (27%) always use it while 35% use it occasionally. Only 3% of the respondents have said they never use risk management practices.
This stat further emphasizes the importance of having sponsors who are actively supportive. Also, 78% of respondents in the Geneca project management survey have said they would like the business stakeholders to be more engaged in the project.
Project management statistics show that senior managers are more aware of the value of project management than other members. Among them, 87% have said they completely understand the importance of PM practices. On the other hand, the lack of involvement from senior management is the main reason why 33% of projects fail.
Project management helps organizations complete projects within budget and on time, and meet the original goals and business intent. Additionally, this practice has a proven track record of positively influencing project realization maturity. 80% of high-performing organizations have reported using project management practices which further highlights this notion.
This can largely vary. Project management time is not done in straight average numbers of hours. There can be an ebb and flow of time requirements—a manager can be occupied full-time during the planning phase and then clock in fewer hours as the project advances. While the number of projects a manager can handle at once can’t be set in stone, the realistic projections would say it’s 4.
Inadequate project planning is the number one reason for project failure. Project planning is one of the most important responsibilities of a project manager. This process is vital because without a clear vision the team won’t be able to properly execute tasks and reach the project goal. The Denver International Airport’s Automated Baggage System is one of the best-known examples of failed projects due to poor planning.
70% of projects globally fail. This can be due to many reasons: inaccurate requirements, uninvolved project sponsors, inaccurate estimates, shifting project objectives, and more.
A survey has found out that the average age of PMs is 42.4. The study also showed there is a peak at 27.4 and 54.6 years of age, pointing out the generational gap in the industry.
The estimates show that the project management costs range between 7% and 11% of the project’s total cost. When adding project control support, this figure might jump to 9-15%.
Dividing the project management process into phases can help you structure and simplify it into more logical steps; therefore giving you better chances of succeeding. The five crucial stages of the PM lifecycle are project initiation, project planning, project execution, project monitoring and control, and project closure.
Customers and stakeholders’ expectations will continuously change during the project completion process, making it difficult to achieve project goals. These project management statistics have hopefully helped you understand that proper management is the key to decreasing the failure rate — make some notes and get ready to nail your next project.
Sources
4PM, PMI 2018, PMI 2016, CIO, G2, Geneca, PMI 2014, PMI 2017, KPMG, Business2Community, PMI, Wellingtone, Agile247, Mordor Intelligence, Datanyze, Business First Family, PMI, Wellingtone, Wrike, Business2Community, Workamajig