Addressing common pitfalls in Financial Project Management
Addressing common pitfalls in Financial Project Management
With so many moving parts and departments, large projects in the financial sector need a robust approach and the right solution to ensure that high-value deliverables make it over the line. It’s important to demonstrate to business executives and high-level stakeholders that investments are performing as planned and compliance is being maintained at all levels.
According to a study published in the Harvard Business Review, more than half of projects fail, making it imperative to adopt strategies that mitigate risks and enhance the probability of success. As the chief transformation or governance officer for a financial company or bank, it is crucial to be aware of and address common pitfalls that can impede project success.
In this article, we’re looking at the common issues that your organisation may encounter with the management of large-scale projects.
Common pitfalls to avoid with large-scale project management
Let’s dissect some of the common problems that are encountered in the financial sector and how you can help project managers resolve them.
Choosing low-value projects
Sometimes it’s not the management of a project portfolio that is the issue. Instead, it can be the choice of projects that hinders success.
If low-value projects in the pipeline are approved for the active portfolio of work, this can drain resources. Consequently, tasks that could contribute to higher-value outcomes are delayed due to resource constraints. You can also end up with poor-quality outcomes.
That’s why it’s key to vet projects according to business objectives, ROI and risk assessments.
Portfolio managers can evaluate whether a project is worth pursuing or a high priority by considering the below questions:
Is the project time-sensitive and vital for business compliance?
A risk assessment can be completed that highlights the consequences of not completing a project and fulfilling objectives by a certain deadline. It’s imperative that investments are employed correctly.
What’s the return on investment?
Calculating the return on investment is one of the most important factors that will influence whether a project is worthwhile. However, it’s also important to attach this to the business’s goals and values.
Is the project realistically achievable?
If the project is outside the current business scope or level of maturity, it could be worth waiting until your business has acquired the correct resources to render it achievable.
Will the outcome provide genuine value on a large scale?
In other words, will the output and outcome be something that would benefit a lot of people, or something that a lot of people want?
Are the objectives clear?
With no clear objective or outcome in mind, a project could easily become irrelevant.
How are you going to measure project success?
By knowing how you’re going to measure the success of a project, you can more easily assess whether it’s providing value. Understand your stakeholders and what they consider success.
These should be considered before onboarding a project and setting the plans in motion, but they should also be monitored throughout the project lifecycle.
Exercising business rationale before a large-scale project is given the go-ahead can help save significant time, money and hassle. It can also protect a financial organisation’s reputation, lead to higher value outcomes, and boost the morale of your teams.
By ensuring there’s a robust vetting process for projects, you can empower your teams and ensure that everyone is contributing to a high-value outcome for your financial company or bank.
Unrealistic expectations and not enough resources
Committing to ambitious projects that don’t have the right resources is another common pitfall of large-scale project management.
If a large-scale project involves many people working over an extended period, it can be difficult for managers to predict all the activities and work streams required.
When multiple projects are underway simultaneously, it’s important to ensure that the right resources are available. That’s where resource and capacity planning are essential.
Having a good business process and a single source of truth with the visibility required to allocate the right people and flag up any gaps in resources for projects can save a lot of time. It should also help resource managers proactively address resource gaps before they slow down project progress.
Ensuring there are gaps in project timescales helps to ensure that if a project requires extra time, you have the flexibility to do so. It won’t impact other activities or projects that are on the go.
Overall, this will also improve team morale and reduce the likelihood of burnout. Stress can result in absence, so it’s in every organisation’s best interests to ensure that any time constraints and workloads are reasonable. Resource planning functionality within strategic management software can assist with this.
Failing to accommodate the unexpected or adapt to changes
It’s true of all projects that some required activities won’t be identified in advance. Sometimes, unforeseen additional activities are needed. With the right approach and solutions, your operations can better respond to market changes and become more proactive rather than reactive.
Even the most knowledgeable and experienced teams can encounter difficulties when completing tasks. An unforeseen issue could arise that requires extra time and budget allocation before resuming the activity in hand. That’s why being able to accommodate the unexpected is crucial.
You are likely aware of the common factors that can derail a project’s progress. This can include both internal and external conditions, such as delays between interdependent projects, changing customer requirements, scope creep, market and economic fluctuations, and resource gaps.
Leaving gaps in the project plan from the offset to accommodate this can be helpful. However, there is also another way to approach this issue – one that doesn’t involve a crystal ball.
“What if” scenario planning lets you find the best response to inevitable change in real-time. This is a feature of strategic portfolio management.
Enabling managers to view demand in the pipeline, understand the potential impacts of approving, rejecting, or rescheduling the work, and find the optimal scenario is vital. Resources are not just people; they’re all your company’s resources, including time, money, people, facilities, equipment, etc.
If circumstances change, your portfolio managers can rely on a scenario planning feature to find the best fit. If new actions are required, such as hiring new talent or postponing a non-urgent project, this can be addressed efficiently.
Using a strategic portfolio management solution, portfolio managers can review and assign a range of scenarios, which can be instantly assigned to projects. This enables your business to adapt more quickly to changes, reducing confusion in your teams or unnecessary loss of productivity.
Agreeing on how to measure success
For large banks and financial institutions that operate on a national or global scale, it’s crucial to understand success and what that looks like for various stakeholders. How to communicate project success is another consideration.
Santander UK had this exact issue, which is why they reached out to a leading portfolio management solution company to get their expertise.
Launching an enterprise-wide transformation required a clear vision to keep everyone focused. This included outlining strategic goals, creating well-defined roadmaps, and establishing criteria to measure success. This last point proved the most challenging.
For Santander UK, the stakeholders consisted of leadership, business units, IT, finance, and product teams, each accustomed to quantifying success on their own terms using anything from cost avoidance to risk management, capitalisation and user adoption.
With no one-size-fits-all measure of success, Santander UK relied on embracing an adaptive attitude toward governance. They required a framework that provided a sufficient structure for viewing progress.
With PPM solutions, stakeholders and various role holders could actively drill into and analyse key data points from within a single source. The impacts of decision-making at every layer of the organisation could now be viewed in real-time by project managers.
Looking at the business outcomes, Santander UK experienced up to 80% better-informed reallocations of investment budget and 25% quicker decisions.*
Not working towards a common goal
It can be difficult to imagine that teams can execute all their tasks to high-quality standards, on time, and perhaps even under budget, and yet the overall project may still fail to deliver the intended results.
Why?
Disparate activities can all be fulfilled, but they need to come together to fulfil the end goal.
That’s why you need a solution that’s built to handle multiple projects and multidisciplinary teams across various geographical zones.
The various work streams need to become integrated, rather than being set up as individual projects that don’t intertwine or interact in any way.
Ensuring that everyone is working toward a common goal and that the management approach is tailored to handle complex, large-scale projects is a must. Applying a strategic portfolio management system can help bring information from various departments together.
By utilising strategic pillars, you can organise separate portfolios for your financial organisation. For instance, you could have a pillar for ‘digital transformation’ and a separate one for ‘regulatory compliance and risk remediation’. The latter is critical for financial sector businesses and banks.
Lack of visibility and transparency on portfolios
Visibility into portfolios allows banks to make better decisions based on up-to-date analytics, improve accuracy in recording and maintaining assets, respond proactively to potential issues, and safeguard their investments.
Getting visibility over an entire portfolio is a dream scenario for portfolio leads and business executives.
Being able to create custom reports that automatically update with the data that matters in real time can transform the way projects are overseen. Finding a way to easily identify the projects that are underperforming or at risk of not getting completed will help executives make more informed decisions.
Portfolio dashboards can reveal a lot. For instance, the performance view of portfolio investments shows how well they are doing, when they are likely to be completed, and the projected outcomes. Real-time budget allocations and whether a project is on-budget will also be visible within the dashboard views. It’s not just the progress that’s important. Ensuring that all the financial elements and resources are accounted for is also critical.
Decision-makers should be able to access all the information they need to postpone or fast-track projects as required.
As a chief governance officer, your role is to make sure that the entire portfolio is governed the way it should be and give complete transparency to senior management to make the right decisions.
With a single source of truth and access to the right data dashboards and reports in just a few clicks, your project managers and senior management can identify issues that could impact project success sooner. That way, decision-makers can make proactive and informed decisions to ensure that high-value projects remain on track.
Ineffective communication
According to the Project Management Institute, 30% of the projects that fail are the result of ineffective communication. Most large scale project managers will have experienced a communication breakdown within a project.
If outdated documents and information are being used, or you routinely experience bottlenecks as a result of a lack of internal notifications and updates across your teams, this can be addressed.
The good news is that strategic portfolio management solutions can alleviate these issues by providing a single source of truth, automated notification processes triggered by tailor-made roadmaps and enhanced collaboration.
Not leveraging automation!
Enterprises that continue with manual processes for menial administrative tasks when they could be automated are missing out on a wide range of productivity benefits.
Project onboarding processes and timesheets can also be templated and automated, saving time on routine administrative tasks. By building roadmap templates for common project processes, time can be spent on other high-priority tasks instead, ensuring that projects run smoothly towards completion.
Having one window ensures a single source of truth and brings all the departmental silos together. Alerts can be automated to reduce bottlenecks. It also reduces the risk of human error.
Empower your portfolio managers with the right solution
Hiring skilled portfolio management experts is only part of the equation; providing them with the right solutions is equally critical. Strategic portfolio management solutions offer features that can help your organisation monitor progress, anticipate challenges, and ensure the success of large-scale financial projects.
Ignite Technology specialises in providing strategic portfolio management systems for enterprise-level projects.
Schedule a free consultation to receive a tailored demonstration of our software solutions, and how we can align them with your business requirements. Our experts have a proven track record of helping businesses leverage industry-leading solutions for enhanced productivity and impactful project outcomes.
Addressing these common pitfalls through strategic portfolio management solutions will not only contribute to project success but also position your financial company for sustained growth and excellence.
Sources:
*https://www.planview.com/resources/case-study/santander/
