In a 2016 Fast Track piece, we covered a disconcerting study conducted by The Project Management Institute (PMI). The research illustrated that organizations around the world waste an average of $122 million for every $1 billion spent on projects as a result of poor project management practices.
Called Pulse of the Profession®: The High Cost of Low Performance study, the study indicated that the amount of waste had increased 12 percent over the prior year. Featuring insights from nearly 2,500 project managers, nearly 200 senior executives, and nearly 300 Project Management Office (PMO) directors from a range of industries, Pulse of the Profession was one of the only studies to look at project management trends globally.
Despite the fact that of the industries included in the study, government agencies had the lowest average monetary waste on spending projects ($108 per $1 billion spent, financial services was much higher), the feds were the first to take action.
On His Way Out, Obama Saved Project Management
Without getting overly political, I feel that Obama did a lot of good for our country, and especially for the field of project management. Allow me to explain. Before he turned the reins over to Trump, Obama signed bill S.155, or the Program Management Improvement and Accountability Act (PMIAA).
The PMIAA requires the implementation of established project management strategies to create a more consistent, efficient and effective federal government, as well as the carrying out of policies to correct widespread inefficiencies.
Obama got this done with relatively little fanfare, mostly because unlike much of his proposed legislation, the PMIAA received substantial bipartisan support. “We are thrilled that this significant piece of legislation has been signed into law by President Barack Obama. PMIAA will help maximize efficiency within the US federal government, thereby generating more successful program outcomes and increasing the value that Americans receive for their tax dollars,” said PMI President and Chief Executive Officer Mark Langley in a press release.
Implementation of the new law will be overseen by the Deputy Director for Management of the Office of Management and Budget (OMB). The legislation mandates that federal agencies work together and consult with private sector organizations to determine the best project management practices. It’s a sweeping law, meaning that all areas of government fall under its umbrella with the notable exception of the Department of Defense.
All Bases Will Be Covered
The specifics are even more intriguing. According to Moira Alexander at CIO, any government agency that is required to have a CFO is mandated to appoint a Program Management Improvement Officer. This officer is responsible for developing a five-year strategy to improve program manager roles within the agency, as well as implementing all associated policies and reporting on progress. In addition, a Program Management Policy Council within OMB is expected to be established for the purpose of improving program and project management practices.
The Office of Personnel Management will be involved too. This group will ensure that the government as a whole ups its PM game. It will regulate PM competencies, develop a new program and project manager job series, update existing PM jobs, and identify new PM-related career paths.
As an additional safeguard of accountability, within three years of the law passing, the Government Accountability Office (GAO) will issue a report documenting the effectiveness of the new initiatives – including strategic plans, policies, and guidelines – and the performance of the Program Management Improvement Officers and the Program Management Policy Council.
There’s little doubt that PMIAA is a boon for the project management profession. “Passing this law opens up opportunities not only within the government setting, but it also amplifies and elevates the profession as a whole,” wrote Alexander in CIO. “PMIAA creates an increased awareness of the need for certified experienced PM professionals across America. It shines a spotlight on the imperative role PM professionals play in government and the private sector especially as it relates to accountability, efficiencies, and strategic value.”
Considering the Implications
Even if you don’t work in the government, and even if you don’t have direct PM responsibilities, PMIAA matters to you. For one thing, you know your tax dollars will be put to good use. PMIAA’s system of checks and balances and enhanced inter-agency communication are meant to ensure a reduction in waste, an increase in productivity, and an increase in value.
Inevitably, the law’s implementation will also result in job creation – beginning in the federal government and eventually spreading throughout state and local government and the private sector. And finally, if the law works as intended, it will provide a blueprint for all organizations to effectively manage their PM.
What immediate effects can we expect, both inside and outside the PM world? According to the HotPMO blog, everyone working in the US is bound to feel the impact of the new legislation. “If the government starts to buy-in talent, then we may see wage inflation for certified project managers. There is likely to be increased demand for consultants and trainers, in the short-term at least, as departments come to grips with new ways of working,” it said. “Companies who contract with the government can expect to see contract clauses requiring certified project managers and asking for evidence of adherence to program and project management standards.”
One thing is for sure, the degree to which the government plays in the PM space has just gotten far more significant. From here on out, government agencies will lead instead of follow – dominating national discussions about the purpose and future of the profession. They will showcase the value of having PM gurus highly placed within the ranks, and of maintaining a focus on the efficiency of operations in all types of organizations.
Have you heard about PMIAA? What’s your impression?