Posts Tagged ‘Failure’

Published in MIS Asia – Will you marry me?…

Wednesday, March 3rd, 2010

I asked as we finished our dinner. He’d cooked, I’d enjoyed. ‘Go for it’ I’d been encouraged, ‘but don’t be surprised if …’

The ultimate complex long-term personal project, marriage seems to have more success than business-IT projects: 15 per cent are in dire shape, 51 per cent are challenged. Few are real stars.

By the way, that’s business-IT projects! Depending on your definition of marriage, divorce and happiness, the figures for marriage aren’t so different. Still, I decided, that’s no reason not to try for success. There have to be ways of getting this right, I thought as I expressed my feeling to the Man-I-Love (MIL for short).

Posted as a contributing author at MIS Asia

Getting it right

Life is looking up in the bigger world. Business investment in IT is going up in Asia particularly in India and China. Those I talk with in MNCs say they are getting back into project land with a vigorous ‘let’s get things done’. It’s exciting and energising after a year when many projects were put on hold, even teams disbanded. Still, are we setting ourselves up for the same mistakes?

At the height of the last cycle, project write-offs were estimated to be US$333 billion. That’s practically a financial crisis of our own. It’s a huge capital cost – one that is unpalatable in good times is unacceptable in tighter times.

The cost of failure

Most of us know the Gartner and the Standish stats on project failure. Eighty per cent under-deliver, 33 per cent written off. It’s all out there. So when I came across Chris Sauer’s work on variations to expected project results (as measured by time, cost, scope), I couldn’t help myself. I was curious. I calculated the yield like I would any of my financial investments. I treated it like a portfolio.

With Sauer’s data from experienced project managers, the results initially look pretty good: just 9 per cent of projects were written off, 23 per cent delivered with a large variation in time/cost/scope, 60 per cent delivered within a 10 per cent margin and seven per cent exceeded expectations. These last two categories were considered ‘successful projects’. Most organisations would be proud to have projects delivering with this track record. (At least those who actually measure what they do are. Those that don’t, have no idea of what the cumulative impact of a little less than expected and a little late for a little more is to the business bottom line).

This is much better than the bad old days of the 1980s where Standish reported 33 per cent written off. Good experience project managers and advisors help reduce this cost.

If you are squeamish, skip the next few paragraphs.

Still, I thought, what is an investment worth without the functions expected? It would be like having a kitchen built and having things missing. I pressed the button (Excel did the work) and found: with the reported variations to time, cost and function, the actual business value effectively delivered was negative. Minus 27 per cent.


JA Flinn_chart


An investor expecting a return:

  • Probability of write-off or material variation in return is 33 per cent
  • Likelihood of a project being within 10 per cent of budget or time is 60 per cent
  • Overall, results as measured by a functional yield (i.e. adjusted for changes in scope) as minus 27 per cent

Do a quick back-of-the-envelope calculation for your business/project:

  • What is the average project cost over-run?
  • What is the average project schedule over-run?
  • What is the average project functional shortfall?

Calculate the yield.

Would you invest based on the track record represented by your average?

A bit like marriage, a certain percentage of projects end in disappointment or more. Some are the stellar successes that I’ve seen and wish for.

The path to success

I went out and asked a group of business and IT executives what their experience and advice was. (To be open, it was fully vetted research done under the auspices of Oxford University UK and HEC, France involving executives in MNCs around the world – over 50 per cent were based in Asia or had worked in Asia). Distilled, they had six recommendations:

  1. Know your track record. Measure it and improve.
  2. Recognise that results are as much about the business as they are about IT. IT might produce a capacity, but the business chooses to use it.
  3. Proactively manage the risks to results.
  4. Invest in projects that are likely to succeed, deal with those that won’t.
  5. Have the right governance in place to make it happen.
  6. Success is a continuous process (that requires continuous attention).

On a personal front, I realise that these probably also apply to my relationship: see what works and do more of it, it takes two of us, letting issues lie just makes them harder to handle, so be aware and be proactive. In the dating stage – if it’s not right, it’s not. Lastly, have effective ways of coming to and upholding mutual agreements as well as dealing with issues. To modify a quotation, ‘a successful relationship is a journey not a station’.

As a foundation, MIL and I have trust, respect and an ability to communicate (and love) so we presume misunderstandings are innocent errors rather than intentional efforts to disrupt and annoy. It’s a good basis for business – IT project relationships too.

Hmm, I still want mine to succeed! While the executives had plenty of advice on that, it’s a topic for another time.

This article is based on Part 1: Productivity of her forthcoming book ‘The Success Health Check for IT Projects’ (Wiley 2010).