Introduction
This is the second of five articles in our Shaping the Future of PMO series. Having identified why strategic initiatives fail in Part 1, we now examine the actual cost of execution gaps—beyond the obvious budget overruns and timeline delays —to include the hidden opportunity costs that compound over time, as well as the measurable ROI of building systematic execution capabilities.
Failed projects aren’t just disappointing - they’re expensive.
Last quarter’s “strategic transformation” consumed hundreds of thousands in consulting fees, 18 months of your best people’s time, and countless hours of executive attention. The deliverable? A comprehensive roadmap that’s gathering dust while your team deals with “more urgent priorities.”
Meanwhile, your competitor launched a similar initiative in 8 months and captured the market segment you were targeting.
This is what the execution gap costs.
Most executives focus on the obvious costs: budget overruns, timeline delays, and consultant fees. However, the real cost of poor execution is the opportunity cost and a lack of effective tracking systems. Every month, your strategic initiatives sit in committee reviews, and your competitors gain ground.
The True Price of Execution Gaps
Remember from Part 1 in this series: 70% of strategic initiatives fail to deliver their intended value. Here’s what that failure actually costs your organization:
Digital Costs
✦ Projects that consume 2-3x their original budget
✦ Resources tied up in initiatives that never deliver value
✦ Consultant fees for advice that never gets implemented
✦ Rework and restart costs when initiatives finally get prioritized
Hidden Costs
✦ Market opportunities captured by faster competitors
✦ Employee disengagement from repeated false starts
✦ Stakeholder confidence erosion from missed commitments
✦ Innovation pipeline clogged with stalled projects
Strategic Costs
✦ Competitive positioning is lost to rivals that execute better.
✦ Customer relationships damaged by delayed improvements
✦ Revenue growth stalled by incomplete transformations
✦ Organizational capability gaps that compound over time
The Numbers are Sobering
According to PMO Squad’s 2024 research, 60% of organizations cite measuring results and delivering value as their top concern. Sciforma states in their PMO Outlook Report – 2025 Edition that the most significant issues in financial tracking of projects are as follows:
✦ 38% lack effective forecasting systems for portfolio or project costs
✦ 23% lack systems that integrate with existing financial systems
✦ 23% lack real-time financial data
✦ 8% don’t have good data-gathering financial tools
Here’s what execution infrastructure with data tracking tools in place could deliver instead
Organizations with systematic execution capabilities with data systems in place to track results see:
✦ 20-30% fewer project delays – Strategic initiatives launch when promised
✦ 25-35% reduction in budget overruns – Resources stay focused on what matters
✦ 15-25% better resource utilization – People work on initiatives that actually get completed
✦ 20-30% increase in employee productivity – Teams see their efforts translate into tangible results
The ROI of Execution Excellence
Mini Case Study – Working with a large international company, we quickly realized that having clear success measures and KPI’s was critical for defining and directing success. We reviewed each of our key processes and sought ways to ensure we were executing them effectively.
The first tracking tools we needed to look at were business success tools. We put in place measures like:
✦ Portfolio Results vs. Strategy: Did we achieve the results we expected in the marketplace to meet our company’s strategy goals?
✦ Sales revenue driven by the new project: What current sales figures in the market, with a similar product, were when we started the project, so we could then look at the growth and cannibalization numbers (taking business from our current products) to give us our net increase in sales (dollars and units)
✦ Profit: Are we generating sufficient funds to show a profit on this project?
✦ NPV (Net Present Value): To determine the cost of introducing this new product over time to ensure we were leveraging our resources to get the best results in today’s dollars.
The next area we looked at was the results of other key processes to ensure we were getting
the best results:
✦ Leveraging resources in the right places: we examined the project’s key output (sales or profits) versus the FTE (Full-Time Equivalents) required to execute it successfully.
✦ Stage Gate: We examined each stage gate’s on-time percentage relative to the plan to determine whether our plans were on time and, consequently, whether we were delivering results to the customer on time.
Other detailed metrics were closely monitored, and they aligned with the above.
Together, these results were tracked and reviewed quarterly to ensure we were on target compared to our plans. Any adjustments in plans were then reflected in the new results.
Stop thinking of execution infrastructure as overhead. When done right, it is the highest ROI investment you can make, turning strategic intent into a competitive advantage systematically and predictably.
The question isn’t whether you can afford to build execution capabilities, such as tracking systems and dashboards. It’s whether you can afford not to.
You get what you measure.
Coming Next
In Part 3 of this series, we’ll explore the three levels of PMO maturity and provide a practical framework for assessing where your organization stands today – and what steps will deliver the fastest ROI.
Need Help Now?
If the costs outlined in this article hit close to home, schedule a free 30-minute consultation with one of our senior partners. We’ll help you identify your biggest execution gaps and provide actionable recommendations to address them.
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