NZ Businesses Wasting Millions on Projects

31st July 2013

NZ Businesses Wasting Millions on Projects

New Zealand organisations are undertaking a greater number of projects – but two-thirds of those projects are failing, according to the findings of KPMG’s Project Management Survey released on Wednesday.

The 2013 analysis shows there’s been a significant increase in project activity across all sectors of the economy. In the 12 months to September 2012, 54 per cent of organisations surveyed completed more than 21 projects.

However the failure rates of projects also showed a worrying increase.

“The average reported spend per project is $15m – and the survey results indicate that only one-third of that spend is delivering the desired outcome,” says Perry Woolley, a KPMG Director who specialises in Project Management.

“If those results are extrapolated across New Zealand’s public and private sector organisations, then it equates to a truly staggering waste of resources.”

On the positive side, Perry Woolley says New Zealand organisations are generally more aware of the challenges of project management, and are showing a higher awareness of what must be done to improve.

New Zealand’s high-performing organisations adopt a number of ‘good practices’ that correlate highly with project success. For instance, they use a proven project management methodology, and have effective risk management strategies.

Another key factor for success is having a Project Management Office (PMO) within the organisation. Worryingly though, while PMOs become more common worldwide, the latest survey showed there has been a 30% decline in the number of PMOs across New Zealand since 2010.

“We strongly recommend that all New Zealand companies involved in significant project work should seriously consider the value of having a PMO,” says Perry Woolley.

“Companies that have poor delivery records are now waking up to the fact that project managers need support and infrastructure to deliver more reliably. The days of relying solely on the ‘superhero project manager’ are numbered.”

The full report is available here.

About the KPMG Project Management Survey
The KPMG Project Management Survey is a biennial research project undertaken by KPMG New Zealand. It examines the real-life experiences of businesses who are working on the challenges of improving their project performance. It combines insights and trends from across New Zealand, with detailed analysis by our experienced project management practitioners.

These and other publications are available at www.kpmg.co.nz

About KPMG New Zealand
KPMG is one of New Zealand’s leading professional services firms; specialising in Advisory, Audit and Tax services. Our firm of over 800 professionals work with a wide range of New Zealand enterprises – from SME’s, privately owned businesses, to publicly listed companies, government organisations, and not-for-profit bodies.

KPMG has offices in Auckland, Wellington, Christchurch, Hamilton and Tauranga.

Globally, KPMG operates in 144 countries; employing 140,000 people in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (”KPMG International”), a Swiss entity.

ENDS

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