08 Jul

Top 5 Reasons for Project Failure | An Aggregate View

setting-money-on-fireAccording to the Project Management Institute (PMI), it is expected that 15.7 million new project management jobs will be created globally, with 6.2 million of those expected in the US by 2020.  Considering 13.5% of every dollar spent on projects is at risk, this can’t come soon enough for many organizations.  Do a quick internet search and you will find several stories that illustrating the many reasons project fail and associated costs of poor project management.  Here are a few for you to consider…  

    1. An audit of 84 projects in North Carolina’s Office of Information Technology Services found actual costs exceeded estimates by $356 million and project delays added up to 389 days.
    2. The U.S. Air Force recently scrapped a project that has run 7 years and spent over $1Bil in which the Air Force comptroller said “I’m personally appalled at the limited capabilities that program has produced relative to that amount of investment.”
    3. The Queensland Government ICT Audit 2012 found that throughout government, 44% of projects missed original schedules by at least 3 months (avg of 1yr) and 10% of projects had budget blow-outs of more than 75%
    4. The Economist recently ran a story on the BBC cancelling their project to create a digital content management system after spending $152mil.

With project success/failure rates hanging around 50%, project initiatives expected to grow by double digit percentages, and millions of dollars at risk; companies have got figure out how to get this right.  Here at KPS, we decided to go beyond our experience and network to aggregate data from over a dozen sources, representing thousands of projects across dozens of countries to figure out what is going on.  In addition to tapping into a huge data set, we wanted to balance out potential biases that may come from a firm’s interests. (i.e. – software provider finding tools to be a leading cause).  You can find the comprehensive list below, but to name a few…AtTask, OneDesk, ZDNet, PMI Massachusetts Chapter, Certification Magazine, McKinsey Quarterly, and Oliver Wyman. As we reviewed the respective studies/articles, we created a list of issues each one identified and then simply added a point if it was reiterated in another study/article.  We didn’t weight the criteria according to number of survey participants, so the experience of an executive garnered the same points as 10,000+ surveyed in a larger survey. Nevertheless, our top 5 were very similar to that of large chartered survey in the pool.  Here they are…

  1. Project Manager Skill & Leadership – Almost twice the impact of the next issue in our list, the project manager was cited as having the greatest impact on a successful project outcome.  While not included in this research, this did coincide with a study done by the IDC.  In that study, 515 IT Managers selected the skill of the project manager as the most important indicator of success for their projects.  Here at KPS, we have great respect for recruiting/staffing agencies, but firmly believe that PM roles are unique from project to project and require deep domain knowledge in selecting the right candidate.  Certifications don’t guarantee success and buzzword can easily impress general recruiters.  A successful PM must be a leader with exceptional communication skills, who is able to drive the initiative and not just manage a process.  Collaborating with the team on estimates/effort and developing the project schedule are key tasks for the PM.
  2. Unclear Goals & Business Alignment – Even the strongest of PMs can quickly find themselves in a project headed for disaster if the goals for the project aren’t clear and tied back to corporate strategy.  All too often, the PM is pulled in after this crucial step in project selection and that is the first place we would start.  Afforded this opportunity and equipped with this knowledge, the PM will have a much better grasp on priority/flexibility of the requirements and be better positioned to cast the vision to the team.  Overall, developing a strong project intake process is a must have for increased project success.
  3. Scope Changes & Change Management – This one can have direct links back to the first two mentioned.  Not effectively identifying business-aligned requirements up front and lacking a strong PM to manage the change that WILL happen, is a recipe for disaster.  Most organizations expect change to occur and many have shifted to a more adaptive project methodology for better responsiveness, but you still need a process to quickly review, accept, and implement changes.
  4. Staffing & Inappropriate Skills – McKinsey & Co states 1 of 4 keys to improving project performance is “mastering technology and project content by securing critical internal and external talent.”  Projects are often implementing a new technology, driving innovation, or fixing an issue that has been in the environment for years.  With all due respect, many of your internal folks have not been exposed to the ‘new’ and/or have created some of the issues.  Firms must consider the balance of inherent/company knowledge with specialized external skills to build a highly focused team.  Lastly, many of the surveys pointed to overworked, stretched resources often found in a matrix environment.  Multitasking in an economy when everyone is doing more with less just screams inefficiency and waiting…Harvard Business Review back this up, check it out.
  5. Executive Support – In PwC’s 3rd Global Survey on the current state of project management, they found companies with greater senior management support of PM-driven initiatives achieve stronger business results. CIO.com listed this as Project Management Mistake Number 3. In addition to their knowledge and abilities, we see 2 keys to this one…an executive never wants to be associated with a failure, so they will drive, coach, and move things to ensure success.  The second is that no one on the team wants to fail when a senior manager is actively engaged with an initiative, so their focus and best effort is all in.    

*Some other notable issues included tools, methodology, documentation, and quality   Follow us on your preferred social network to hear our response on how to overcome these challenges:  Twitter | Facebook | LinkedIn     Sources included: AtTask, OneDesk, PM Student Blog, Computerworld, IT Cortex, ZDNet, PMI Massachusetts Chapter, PMI Voices Blog, TechRepublic, Certification Magazine, CIO.com, PricewaterhouseCoopers, McKinsey Quarterly, and Oliver Wyman.