In the summer of 1998, I was visiting some of my friends and family in Boston. Although, the city has a lot to offer (and continues to) in terms of history, culture, food and beauty, the traffic in the downtown area was horrific. People were blaming the “Big Dig”.
The Big Dig was the most expensive highway project in the U.S. and was plagued by escalating costs, scheduling overruns, leaks and design flaws, charges of poor execution and use of substandard materials, and one death. The project was scheduled to be completed in 1998 at an estimated cost of $2.8 billion. Instead, it was completed in December 2007, at a cost of over $14.6 billion.(1)
The High Failure Rate
Various studies have been published lately about doomed projects. McKinsey and Company reported that on average, for IT projects, 45% are over-budget, 7% run over-time and 17% go so badly they threaten the very existence of the company. According to an IBM study, only 40% of projects meet schedule, budget and quality goals. A study published in the Harvard Business Review, which analyzed 1,471 IT projects, found the average project overrun was 27%, and one in six projects had a cost overrun of 200% on average and a schedule overrun of almost 70%.
The Project management community has been struggling trying to identify the reasons behind these alarming numbers. Several articles, studies and surveys have been published to address this problem. Although these studies provide insight on the causes for project failures, they are riddled with inconsistencies. . As someone keen on keeping the project management community in the Middle East up-to-date, I read many of these studies and as a result, I was able to derive the following:
- The reasons for failure published in these articles focused mostly on the western hemisphere, which operates under conditions that may not be necessarily applicable in the Middle East. While project management is mature and is part of the organizational culture in corporate America, it is still evolving in the Middle East.
- The top reasons for failure in projects differ from one industry to another. For example, reasons for failure in IT are significantly different from construction. In the IT industry, the primary culprit for project failure is scope creep due to incomplete and/or inaccurate requirements from end users, while in construction; it is the unavailability of skilled resources.
- Defining when and why a project fails is inconsistent. For instance, when do we render a project as failed? What are the criteria? Is it 1% delay or 50% delay? What is that magical percentage?
Having been involved in various aspects of project management in Meirc Training and Consulting, I was able to take note of the common reasons for many project failures in the Middle East. For the sake of keeping you informed, I have listed the 10 reasons from my perspective:
- Lack of standard project management methodology. This also includes organizations that have the methodology but do not necessary embrace or implement it correctly. Project management is not about shuffling documents, it is about discipline. Some studies show that by implementing proper project management best practices, the chances of success increase dramatically.
- Poor communication. Often, we find the key stakeholders are either misinformed or uninformed about the major deliverables, timing or issues related to a project. Without proper communication and mechanisms to provide these stakeholders with updates to adjust their expectations, the project will be doomed. Project managers need to be well trained on written, verbal and non-verbal communication.
- Poor resource allocation. A significant number of project managers generate project schedules without allocating resources. This practice often leads to over-allocation which makes the schedule impractical and inaccurate. By correctly using project management software (such as MS Project and Primavera), project managers will be able to allocate and level resources easily and generate more accurate project plans.
- Poor documentation. Project managers are busy people by nature. They have a lot on their plates, so relying on human memory in managing their projects is simply a recipe for a disaster. Documentation is vital. Project managers need to learn and get in the habit of documenting issues, risks, challenges, group meetings, one on one meetings and even phone conversations. Without such documentation, managing a project will be chaotic; information will fall through the cracks and issues will not be resolved properly.
- Lack of use of logs. Any project has its own set of problems, issues, risks and challenges. There should be consistent logs for every project. At a minimum, there should be an issues log, a risks log and a change management log. Having such logs will ensure the availability of information in one place which will make it easy to access while eliminating redundancy and confusion.
- Lack of team involvement in planning. It is common for project managers to do the planning themselves. While there is nothing wrong with that, it is imperative for project managers to involve the project team and subject matter experts when it comes to planning. Research shows this can lead to better estimates and better planning overall. Furthermore, team building exercises such as milestones’ parties, and working together on Work Breakdown Structure (WBS) can help in getting all team members involved.
- Lack of roles and responsibilities. This relates to poor resource management. Project managers should assign resources to tasks so there will be no surprises. Using a responsibility matrix such as RACI can be extremely helpful in determining the role of every team member.
- Poor risk management. Risk management is getting very popular recently. Risk management is about being proactive. Unfortunately, project risk management is still not well-optimized in this region and many projects are still running in fire-fighting mode. Proper risk management planning that includes risk identification, assessment and response planning is an essential part of project planning overall.
- Poor control of scope. This is a universal problem that requires proper controls. Inexperienced project managers allow their project scope to creep. As a project management subject matter expert, I believe the best way to limit this problem is by being thorough when hiring project managers, avoiding instances of panic-hire and by providing proper training, coaching and mentoring for junior project managers. Experience and proper training are proven ways to help alleviate this problem.
- Lack of executive commitment. Discipline, documentation, ownership and responsibility are all big topics in project management. But without proper commitment and support from senior management, it will be virtually impossible to apply proper project management methodology. Project managers, project team members and resources need to know that executives and senior managers are ready to provide them with unlimited support to enable them apply and enforce project management best practices.
As mentioned earlier, the above list presents the reasons for project failure from my own perspective and from a quick comparison between project management practices in North America and in the Middle East. For more details about these reasons and for a thorough understanding of best practices in project management, please contact us and we will be more than ready to assist.
(1) Completing the "Big Dig": Managing the Final Stages of Boston's Central Artery/Tunnel Project
(2) Delivering large-scale IT projects on time, on budget, and on value, October 2012 | byMichael Bloch, Sven Blumberg, and Jürgen Laartz