A third of the Australian Institute of Project Management (AIPM) membership base will leave the profession in the next 10 years.
With nearly 50 percent of AIPM's membership falling within the 40 to 54-year age bracket, Australia faces an acute shortage of project management skills by 2020.
Another 10 percent of the industry body's membership base is in the 55 to 60-year age bracket, well on their way to retirement.
Peter Shears, the institute's CEO, said the retirement of up to a third of Australia's project managers in the next decade signals a significant skills shortage in sectors such as government, construction, IT, telecommunications, finance and energy.
Speaking at myPrimavera06 conference in Canberra last week, Shears said the only solution is for companies to significantly change the role of project management.
He said the departure of so many professionals will leave a dramatic gap in experience and business acumen to backfill.
"That spirit of risk-taking leadership that characterized this generation of project managers just won't be there in 10 years time," Shears said.
"While older project managers had 30 years to develop skills, today's generation has to fast track to accumulate the same range of skills in just five to 10 years."
Shears urged organizations to plan now to overcome the significant challenges facing the profession.
He outlined three solutions to overcome the skills crisis. They included mentoring by senior project managers, new approaches to skills development to attract and retain entrants, and the addition of project management competence to the core capabilities of all professionals.
"At the moment mentoring is seen to be working at company level but it's inevitably laid on top of a manager's existing workload. I'm proposing companies take pre-retirement project managers off sensitive projects and make them full-time mentors," he said.
"If these changes don't take place and young people are not taught these skills, we will see a few years of turmoil as organizations are forced to come to grips with the issue."
Primavera Systems chief technology officer Richard Faris believes that when training new managers, the focus should be on consistent processes and terminology. This would facilitate better collaboration among project participants to ensure effective knowledge sharing.
Faris said this presents an opportunity for technology vendors to develop agile and flexible applications that encourage wider use throughout the organization.
"Currently we're developing project portfolio management software that is totally Web-enabled and can be used anywhere at anytime to meet business demand; this reflects the competitive pressures on business to adapt to rapid changes in technology," he said.
"The days of command and control [in business] are over.
"Business today needs to be more collaborative, more inclusive and less hierarchical to ensure that decisions get made that support business strategies." Faris noted one quarter of the world's GDP, totalling $10 trillion a year, was spent on projects.
Despite this, many businesses still lacked the people, processes and technology to ensure consistently successful project outcomes. For example, KPMG's Mark Tims noted that 49 percent of IT projects still fell short of expected outcomes.
Case studies on project portfolio management (PPM) were presented by BlueScope Steel, Centrelink and Energy Australia.