Every couple of weeks, I share a guest post from some excellent friends & colleagues in the field Project Management & Leadership. It is a great honor to have these folks contribute to Kelly’s Contemplation and I hope you enjoy their input as well. This week, I am happy to have Paul Naybour of the England-based Parallel Project Training provide the weekly post.
Before we get into it, here is your video of the week…
The evidence from the past?
Much of the evidence on project management indicates that the chances of success are very low. Bent Flyvbjerg’s work, comparing project out-turn costs with the original budget, tends to imply that nine out of ten projects significantly exceed the budget and overspends are between 40% to 60%. He identify three reasons for these overspends
- Insufficient models of the project costs i.e. we don’t fully understand the scope, risk, constraints and assumptions.
- Optimism bias which is a human tendency to view the future through rose tinted glasses.
- Strategic misrepresentation of the costs because a collusion of interests from the sponsors, consultants, contractors and project managers all have a vested interest in underestimating the costs and exaggerating the benefits of the project. In this way they can improve the chance of the project being funded.
Any project manager involved in developing a business case or preparing a bid will recognise the influence of these factors on the business development or business case of a project. Too often the project is kicked over the fence for the delivery project manager to drive a project team with insufficient resources, budget and no contingency. Am I over exaggerating?
The forecast for the future?
The outlook is not good in these tight economic and competitive times where we see project budgets getting tighter, contingencies being removed and resources overstretched. As organisations, both public and private, aggressively compete for a smaller and smaller pot of money this will only result in even more pressure to start a project with insufficient budgets and resources.
Is there light at the end of the tunnel?
So looking forward it seems in the short term that projects will continue to overspend, much as they have in the past. So are we all doomed? Well I think not. Just look back at some of the “failures” of the past, including
I would have been proud to have delivered a project half as successful as any of these, but in short term economics they suffered from all the issued identified by Bent, but I would argue that for mankind and human endeavor they were all fantastic successes. Comments?
Paul Naybour is business development director with Parallel Project Training, which offers on-line, in print, on iTunes and face to face APM Project Management Training. He also follows and contributes regularly to #PMOT and his own blog at Project Accelerator.
- Why Are We Always Late? from the folks at Back From Red
- Recovering Troubled Programs Part I & Part II from the folks at A Girls Guide to Project Management