November 22, 2017

Making Good on South African Infrastructure Projects

Projections are that GDP for Africa will increase fivefold from 2000 to 2019, supported by key transport, energy and communications infrastructure projects, and South Africa is expected to play a large role. Mark Langley, president and CEO of the Project Management Institute (PMI), discusses how to maximise the success of these economic drivers.

South Africa has committed to substantial infrastructure investments spanning multiple industries that are critical to the nation’s economic growth and long-term development. With R84.3 billion already having been spent on such projects and some of them already behind schedule, it is critical that measures be taken to increase the likelihood that these projects will deliver on their objectives and do so within scope, deadline, and budget.

South Africa, like many countries, suffers from a shortage of qualified project and programme managers whose skills are integral to maximising the return on investments in key areas, such as the ones South Africa is making in Eskom power stations. A recent study showed that there will be 1.57 million new project management jobs globally each year between now and 2020, with a dearth of qualified people to fill that pipeline.

While this is a situation that is set to worsen globally, South Africa may be positioned to weather the situation better than many other countries. An increasing number of tertiary institutions – Stellenbosch University, for example – are offering project management curricula. As a result of the profession’s maturation across the whole of the continent, PMI currently represents more than 10,000 project managers in Africa.

We have offices throughout the world and have seen other positive industry trends elsewhere. About 10 years ago in China there were fewer than five project management degree programmes offered countrywide. China began investing in this area and within a year there were more than 90 degree programmes focusing on project management training and education. On top of that, the government began creating genuine career paths for people entering into project management.

But talent is only one of several issues South Africa and other BRICS nations must address to improve returns on investments. PMI conducted a global study with the Economist Intelligence Unit in 2013 around organisations’ strategy and implementation. Specifically, we asked executives: “How many of you think that strategy implementation is important?” Eighty-eight per cent responded that they thought it was important, yet a significant majority also acknowledged they struggle to bridge the gap between strategy formulation and its day-to-day implementation. Since all strategic change happens through projects and programmes, it is easy to see why many organisations fail to deliver value to their stakeholders – and why only 54 per cent of an organisation’s strategic initiatives meet their goals.

The bottom-line consequences of this performance rate are considerable. In Africa, organisations report wasting the equivalent of R88 million for every R1 billion invested in projects due to poor project performance. At PMI, we are committed to raising awareness of the amount of money that is wasted due to poor project management and the inability to execute on strategic initiatives, and to providing insights about how the best-performing organisations waste less money and deliver more successful projects.

From the outset, project management needs to take into account the full life cycle of the project – not just the elements of production or the final delivery. This is necessary so that you don’t overlook the downstream costs of maintenance. An example here would be a lack of maintenance leading to downtime of a power station resulting in the inability to achieve the desired 800 MW output. Another example of incomplete or immature planning could be the building of coal-powered stations when long-term planning calls for prioritisation of gas-powered stations.

Regardless of the type of project, a key success factor in project management is the presence of an engaged executive sponsor – a member of senior management who makes the business case for a project, champions its value and obtains the necessary organisational resources to make the project viable. Where a project or programme manager leads, the sponsor operates at the highest level of an organisation’s management structure to lay out the requirements and to hold others to account. The sponsor initiates and signs off on the project, promoting the change and benefits. When this engaged executive involvement is absent, we see projects fail because there is no one with a full understanding across and up the organisation, and navigating, and advocating for, changes throughout the organisation.

The governance of a project is a complicated process, involving the management of risk, access to capital, and numerous other factors. Organisational leaders need to understand this and drive the way forward. With focus and energy, a clear understanding of what needs to be done, and a desire to achieve established goals, there is no doubt that South Africa can take a position as a leader in driving tremendous GDP growth across the entire continent in the years ahead.

Mark A. Langley is the President and CEO of the Project Management Institute. Langley, who is based in Philadelphia in the USA, was recently in South Africa for the PMI Africa Conference showcasing project management in developing Africa.

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