Industrial manufacturing companies in which project managers report directly to senior executives are almost twice as likely to complete their projects on schedule compared with companies where project managers report to mid-level project sponsors, according to a survey conducted by the Economist Intelligence Unit (www.eiu.com), a London-based global research and advisory firm. Companies in which senior leadership has oversight of project managers are 50 percent more likely to meet or exceed budget expectations.
The study, titled “Industrial manufacturing: managing for success,” was done by the Economist Intelligence Unit, an arm of The Economist Group, which publishes The Economist newspaper, and was sponsored by Oracle Corp. (www.oracle.com), the Redwood Shores, Calif.-based enterprise software supplier.
The study demonstrates that a rigorous approach to project management and senior executive oversight result in measurable benefits for the industrial sector. The report focuses on organizations involved in the design, manufacture and installation of heavy equipment and machinery, energy systems and complex equipment. It is based on a March 2010 survey of 251 senior executives and project managers worldwide, supplemented by in-depth interviews and other research.
Industrial manufacturing companies manage deeply complex projects. These initiatives may have many public and private stakeholders, cost hundreds of millions of dollars, take several years to complete and face tight margins. The technical challenges of such projects make strong leadership essential for achieving success, the report concludes.
Other findings of the study include:
• Clearly defined project management methodologies increase the likelihood of success. Sixty-two percent of companies that employ a rigorous approach to project management across the organization rate themselves as very good or excellent at managing projects, compared with just 32 percent from companies that do not apply such methodologies across the board.
• Organizations with a well-established project management approach are better at managing risk. A proactive approach to problem solving is a highly valued skill across this industry. In the survey, 85 percent of respondents rate the ability to identify problems and solve them quickly as extremely critical (53 percent) or critical (42 percent) to project success.
• The right tools enable project teams to manage risks, but do not take the place of good oversight. “You can have all the tools in the world, but if your team doesn’t understand how to use the data, and how it fits into the context of the project, they don’t add value,” says Edwin Bolwerk, of Vanderlande Industries, a global industrial automation company.
“Industrial manufacturing: managing for success” is available free of charge at: www.eiu.com/sponsor/oracle/pmsuccessindustrialmanufacturing.
Economist Intelligence Unit