Although many companies do a good job of tracking performance on the schedule, cost, and scope of authorized projects, I have never seen an example of providing an equivalent level of measurement or scrutiny to project benefit. Often, once a project is started, the focus switches to the performance of the project. From a TOC perspective, this is surprising given the large impact that project benefit has on the ROI and the usual case of much greater uncertainty on project benefit than on project investment.
Periodic updating of the project risk-adjusted ROI (Table 8.1-3) provides one mechanism to ensure project benefit. Ensuring accountability for project benefit can add to focus on it.
I discussed how the TOC approach enables adding new projects to the portfolio as they arise and that when doing so, one should update the project risk-adjusted ROI to rank the projects considering only the remaining investment to complete, removing the sunk cost. This provides an opportunity to also update the benefit estimates.
Larry Leach is the president of Advanced Projects and teaches graduate-level management courses for the University of Phoenix. He has published many papers in his field and is the author of Critical Chain Project Management (2nd ed., 2004). Larry is certified as a Project Management Professional by the Project Management Institute, an instructor for PMI's seminar series, and a speaker at PMI conferences and for global project management training. He has master's degrees in business management and mechanical engineering.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.