On Time, On Budget: Clarity GovCon Project and Risk Management Trends
By Jason Kinder, Director of Product Marketing, Deltek
By Jason Kinder, Director of Product Marketing, Deltek
For the tenth year, Deltek has taken the pulse of the government contracting industry through its Clarity Government Contracting Industry Survey and Study in order to identify key issues the market is facing, while simultaneously forecasting trends for the current year and beyond. Deltek recently unveiled the 2019 results and are excited to share the project and risk management findings with you. I hope you’ll find these insights and experiences to be a valuable tool to benchmark your firm and drive success.
Project and Risk Management Trends
Last year’s Study told a story of major growth in the market, and the 2019 report largely reaffirms that sentiment, with organizations of all sizes experiencing growth in 2018 and expecting these growth and revenue increases to continue for at least another year.
Overall, project health is up for all businesses, yet forecast accuracy with project timing and project budgeting are particular areas of concern. Businesses are aware of the importance of the project management discipline and are proactively making investments in their project management functions. Organizations are performing schedule risk analysis earlier than ever before and have expanded the scope of their risk and opportunity management.
10th Annual Deltek Clarity Government Contracting Industry Study – Project and Risk Management Trends
On Demand Webinar
Top Project Management Challenges and Solutions
While seeking to better forecast and scope out new contracts won in this expanding market, organizations are facing a new set of project management challenges. Inexperienced project managers saw a six-point drop from last year and is now the fourth most cited challenge.
Accurate project timeline forecasting and poorly defined scope are still among the top three challenges and are newly joined by collaboration and communication. Medium-sized businesses were the most likely to cite accurate cost forecasting as the top challenge, whereas small businesses were the least likely to cite it as the top challenge.
Businesses are more focused on individual training and human capital solutions to address their project management challenges, as opposed to structural changes like establishing a formal project management officer (PMO) or building better metrics.
Projects On Budget and On Schedule
The median business in this year’s Clarity survey reported that 90% of its projects were on budget and on schedule. Reversing the declines reported last year, businesses of all sizes reported increases in the number of projects being delivered on budget and on schedule.
While businesses with formal PMOs have more projects on budget and on schedule, less than half of businesses reported having such an office or function.
Visibility Into Projects
Nearly identical levels of visibility into the status of current projects were reported this year. Reports of projects with high and low visibility dropped one point each, whereas moderate visibility exhibited a slight increase. Companies reporting lower visibility had a smaller percentage of their projects completed on or under budget.
When Organizations Perform Schedule Risk Analysis
Schedule risk analysis affords project managers the opportunity to improve performance, to mitigate risks and to identify unknowns. Although conducting formal risk analysis remains constant, the time in which it takes place varies. While the overall number of businesses performing schedule risk analysis has declined from last year, at least half of all businesses reported schedule risk analysis being performed at the proposal phase of projects. Notably, no large businesses indicated they passed on performing schedule risk analysis. Businesses that perform schedule risk analysis at project initiation or execution reported having more projects on schedule.
Risk and Opportunity Management Initiative
Businesses have continued to broaden the scope of their risk and opportunity management. Businesses of all sizes reported increases in having organization-wide risk and opportunity management. Not surprisingly, businesses with organization-wide risk and opportunity management had a more accurate estimate at complete (EAC) and estimated to complete (ETC) forecasts.
Investments in project management processes and staffing have continued to pay off for businesses. Compared to last year, projects this year are increasingly on schedule and on budget, across all business sizes. More businesses than ever are reporting organization-wide risk and opportunity management.
The presence of a formal PMO was associated with more accurate forecasting and a higher percentage of projects being on schedule and budget, yet less than half of firms reported having a PMO. Although such an office might be considered overhead, its impact on project timelines and budgets suggests that these offices largely pay for themselves.
There were a number of positive trends from this year’s Study, but also some troubling challenges facing the project management discipline. I would encourage you to watch the on demand webinar 10th Annual Deltek Clarity Government Contracting Industry Study – Project & Risk Management Trends. This deep dive into these findings and best practices can help to assess the health of your firm, and then make the necessary adjustments to connect the right people, processes and tools to help your organization gain a competitive advantage in the industry.
Want to explore more specific results from the Deltek Clarity Government Contracting Study? Register for the complete, in-depth webinar series.
You can also download the full Deltek Clarity Government Contracting Study.
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