Be the first to like this
In an analysis of 1,200 IT projects completed over the past 5 years, on average, these projects turned out 8% under their approved budget and took 21% longer than their approved schedule. This means that too much money and resources are claimed and claimed resources become later available then planned. Too much money is left on the table that could have been allocated to other business opportunities.
Looking forward there are two trends that demand for faster delivery of IT projects:
Increasing pace of IT evolution
Shorter time windows for new business opportunities
To enable faster delivery of IT projects ExxonMobil is introducing P50 probabilistic project cost and schedule estimating for classified estimates. Classified estimates are estimates within the envelope of uncertainty when it is possible to make risk-based predictions of a possible range of the project outcome in both cost and schedule. For a single project the P50 estimate means a 50% probability of cost and schedule overrun. When these projects are accumulated into a portfolio the underruns and overruns even out to a level where money and resources are used as efficiently as possible.
Introducing P50 estimates is a culture change where overruns within the allowable range are accepted and results outside the acceptable range should be treated with equal scrutiny whether it’s an overrun or an underrun.