Why Projects Fail

  

By George Wells
    

Copyright 1999

  

Introduction

A maxim of project management is that projects don’t fail in implementation, they fail in the planning stage.  While it is nearly indisputably true that a project that is poorly planned is destined to fail, poor planning alone is not the cause of all project failure.  Projects fail for many reasons.  Poor time management, communications management, or human resources management or risk management all can cause projects to fail.  In my experience, however, the three most common causes of project failure have been poor project scope definition and management, poor cost definition and management, and lack of a project leader.

 

 

Project management is a science of coordination and balance.  Costs, time, scope, risk, resources, and quality are constantly competing demands, applying pressures that could unbalance the project if allowed to do so.  The project manager’s aim is the judicious allocation of resources.  Almost anyone could be a successful project manager if they were given unlimited resources.

 

A successful project is one that meets all its objectives.  If the project is completed but its budget was overrun or it was behind schedule, it was not a successful project.  Impartial observers may view the project as a success but the project’s stakeholders will know otherwise.

 

  


Assessing Needs

The first critical step in the project life cycle is an assessment of needs.  If a need does not exist, there is no reason to undertake a project.  You may be thinking that this fact is so obvious that it need not be said.  If only it were that easy.  Many projects are undertaken for reasons other than there being a need to be fulfilled.  This phenomenon is often found with the deployment of advanced technology.  Often, the technology is deployed merely for the sake of using the technology, with a nearly complete disregard for real needs.

 

If we determine that there is a real need for a project, only then should we pursue the project.  Assessing the need for a project can, in itself, be a complex undertaking.  An essential element in assessing the need for a project is determining whether, or not, the project creates value.  We can do this by comparing the cost of the project to the benefit it will provide.  The ultimate goal of any project is to provide value.  A project that does not provide value should not be undertaken.

 

The analysis of cost versus benefit should include the cost of project planning and implementation as a component of total cost.  Project cost can be evaluated using traditional financial methods such as Net Present Value, Payback, Discounted Payback, or Internal Rate Of Return.  Additional detailed examination of the needs analysis processes is beyond our present scope.

 

 


Planning

Once we establish a need and we establish that the project’s benefit outweighs its cost, we can begin the planning process.   One could reasonably argue that all activities related to a project, including the needs analysis, are part of the project planning process.  We will define project planning, for our present purposes, as the planning of project implementation activities.  That is, those activities that are normally undertaken after the decision to proceed has been made, the scope has been defined, and the budget has been established.

 

Going back to the maxim that projects fail in the planning stage, failure to have adequately assessed the need for the project is likely to have serious adverse influence on the project further in its life cycle.  As it becomes obvious that the project ultimately will not create value, the project’s sponsors will adjust the project’s scope, its budget, or its schedule in an attempt to create value.  A good project manager is always alert to opportunities to increase the project’s value.  However, while the project manager must always be prepared to respond to the dynamics of the project in a way that enhances value, 

it is not reasonable to expect the project manager to be able to salvage a seriously flawed project.

We must identify and understand three major resource and constraint categories.   Human resources, time, and money are, at once, both a resource and a constraint.  They provide the framework within which we must build our project.  Time is traditionally viewed as a constraint not as a resource.  People are usually viewed as a resource but not necessarily as a constraint.  Money is, perhaps, the only element that is traditionally viewed as both a resource and as a constraint.  Failing to recognize all three as being both resource and constraint can have devastating effects on a project.  The successful project manager will understand this important principle and use it to the project’s advantage.

 
 

Next - 

Part two: Focus of the participants