One of my goals in life is to illustrate the value of projects to the general management fraternity. Perhaps more accurately, explaining the value of project management to executives. For a number of years now I have been "monitoring" the level of acceptance of project management into the broader management community. I do this by looking for project management books in the management "guru" sections of bookshops. I must say .... I am yet to find one devoted solely to project management. Normally the project management books are in the IT section or the academic sections. It's an interesting "index" which I have started to call the "PM guru status" index.

But to get back to the value of a program of projects. I like to wrap it around the "return on investment" or ROI equation.
If we accept that ROI is the profit you make over the investment you made then ROI equals Revenue minus Expenses over Investment.

Accordingly, if you wish to increase your ROI you can do three things independently:

• increase revenue;
• decrease expenses; or
• decrease investment (not a positive move in some ways).

Plainly you do these in combination as well - if you increase investment it should have the aim of either increasing revenue or decreasing expenses otherwise all you are doing is decreasing ROI overall.

For example if you increased investment in new, more efficient machinery, then you can decrease expenses. This is one reason airlines prefer new fuel efficient aircraft. Alternatively, you can increase investment in say marketing over the web to increase your revenue. Either of these examples has the potential to increase ROI overall.

Now if we look at this equation from a business strategy perspective we can identify some of the options we have to impact the equation:

• For example revenue is all about getting more outputs, being more effective in your core business, doing the right thing. So anything that can assist you in being more effective in revenue raising is ultimately what this part of the equation is about.
• Expenses are all about short term costs, efficiency or "doing the thing right".
• Investment could be considered your longer term capital expenditure.

If we accept some of this logic, then we can now overlay where projects can help. Because my claim is that projects are the vehicles to help deliver better ROI for the business hence they are pivotal strategic and operational level business tools.

Just explaining the above diagram, projects can assist the revenue part of the equation by developing new products or perhaps modifying or upgrading existing products; doing the same to services; or developing a new marketing campaign. On the expenses side, you can start a project to provide better, more efficient processes or to establish better support for business operations. For investment, you can use a project as a vehicle to upgrade your infrastructure, to purchase new machinery, invest in a new complementary business or purchase new software.

So projects, if used in a strategic manner, are a very efficient tool to use to leverage better ROI. If you use a rolling program of projects, then you are always looking at new ways of improving ROI, pulling one or more of the levers of revenue, expenses or investment in a "controlled" manner. Because projects are a deliberate and "controlled" mechanism that supports proper governance with defined expenditure, risks, schedules and outcomes or benefits.

Projects truly are strategic and operational level management tools. They should be used more often!

In the next couple of blogs, I want to take this approach but apply it in a Government environment because plainly the "revenue - expenses" part is not really applicable. Additionally, I will be go into some of the conceptual framework of how projects fit into an organisation's business plan.