Author: Parallel Project Training
The evidence from the past?
Much of the evidence on project management indicated that the chances of success are very low. Bent Flyvbjerg's work comparing project outturn costs with the original budgets 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
1) Insufficient models of the project costs i.e. we don't fully understand the scope, risk, constraints and assumptions.
2) Optimism bias which is a human tendency to view the future through rose tinted glasses.
3) 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 phase of a project. Too often the project is kicked over the fence for the delivery project manager is left to drive the project team to deliver 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 will be 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 project with insufficient budgets and resources.
Is there light at the end of the tunnel?
So looking forward is 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
1) St Paul"s Cathedral
2) Sydney Opera, House
3) Union Pacific Railroad
I would have been proud to have delivered a project half a 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.
About the Author
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>