Too many organizations try to save money on projects (cost efficiency) when the benefits of completing the project earlier far outweigh the potential cost savings.
You might, for example, be able to complete a project with perfect resource management (all staff is perfectly busy) in 12 months for $1 million. Alternatively, you could hire some extra people and have them sitting around occasionally at a total cost of $1.5 million, but the project would be completed in only 6 months.
What’s that 6 months difference worth? Well, if the project is strategic in nature, it could be worth everything. It could mean being first to market with a new product or possessing a required capability for an upcoming bid which you don’t even know about yet. It could mean impressing the heck out of some skeptical new client or being prepared for an external audit. There are many scenarios were the benefits outweigh the cost savings (see «Cost of delay«).
Additional to delivering the project faster, when you are done after 6 months instead of 12 months you can use the existing team for a different project delivering even more benefits for your organization. So not only do you get your benefits for your original project sooner and/or longer, you will get those for your next project sooner as well because it starts earlier and is staffed with an experienced team.
An important goal of your project portfolio management strategy should be to have a high throughput. Get projects delivered fast so you start reaping your benefits, and your organization is freed up for new projects to deliver additional benefits.
For a typical organization this means three things;
1) Doing fewer projects (in parallel). On average only half of what you are doing now.
2) Focus on doing the right projects.
3) Focus on improving your project delivery capability.