Project Failure Reasons and Causes

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Project failure tends to be embedded in a project from the start. There is a spectrum of failures from complete collapse to a range of lesser failures associated with behind schedule and over budget. The reasons are all too well known. Yet the lessons from project failures are not being learned and the behaviours that give rise to failures continue to persist. Project failures will continue to occur until the reasons and behaviours are explicitly understood, acknowledged and addressed.

The reasons for project failure across project phases include:

Requirements

• Poor initial requirement definition
• Poor requirements validation
• Poor management of requirements
• Requirements not linked to business benefits

Solution Design

• Solution design not validated
• Solution design not linked to business needs
• Solution design too complex
• Solution design does not capture necessary complexity
• Solution design based on unproven technology
• Solution not implementable
• Underlying business processes not defined adequately

Estimation

• Errors due to limitations in estimating procedures
• Failure to understand and account for technical risks
• Deliberate underestimation/misrepresentation of costs
• Poor inflation estimates
• Top down pressure to reduce estimates
• Lack of valid independent cost estimates

Project Management

• Lack of program management expertise
• Mismanagement/human error
• Over optimism
• Schedule concurrency
• Program stretch outs to keep production lines open
• Lack of communication
• Poor management of change and scope creep

Development and Implementation

• Lack of competition when selecting suppliers, poor supplier selection process
• Poor supplier engagement
• Poor contract design
• Inconsistent contract management/administration procedures, too much or too little oversight
• Waste
• Excess profits by supplier, supplier overstaffed
• Supplier indirect costs unreasonable
• Inadequate resource allocation and prioritisation
• Organisation cannot handle change

Finance and Budgeting

• Business case incomplete
• Funding instabilities caused by trying to fund too many projects
• Funding instabilities caused by management decisions
• Inefficient production rates due to stretching out programmes
• Failure to fund for contingency
• Failure to fund projects at realistic cost

Published in: Technology

Project Failure Reasons and Causes

  1. 1. Requirements Solution Design Poor initial requirement definition Poor requirements validation Poor management of requirements Requirements not linked to business benefits Estimation Gall's Law A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system. Spectrum Of Project Failures and Successes Complete Project Failure: Cancelled, Unused, Rejected Reduced Functionality Requiring Workarounds Project Late and/or Over Budget Complete Project Success: On-time, On- budget and Delivering Specified Benefits More Expensive to Operate and Support Than Planned Specified Business Benefits and Savings Not Delivered Solution Largely Unused And/Or Unusable Significant Rework or Replacement Required Functionality Delivered Does not Meet Business Requirements Performance and/or Operational Problems Not What Is Wanted Or What Was Required/ Envisaged Solution design not validated Solution design not linked to business needs Solution design too complex Solution design does not capture necessary complexity Solution design based on unproven technology Solution not implementable Underlying business processes not defined adequately Errors due to limitations in estimating procedures Failure to understand and account for technical risks Deliberate underestimation/misrepresentation of costs Poor inflation estimates Top down pressure to reduce estimates Lack of valid independent cost estimates Lack of program management expertise Mismanagement/human error Over optimism Schedule concurrency Program stretch outs to keep production lines open Lack of communication Poor management of change and scope creep Development and Implementation Lack of competition when selecting suppliers, poor supplier selection process Poor supplier engagement Poor contract design Inconsistent contract management/administration procedures, too much or too little oversight Waste Excess profits by supplier, supplier overstaffed Supplier indirect costs unreasonable Inadequate resource allocation and prioritisation Organisation cannot handle change Project Management Financeand Budgeting Business case incomplete Funding instabilities caused by trying to fund too many projects Funding instabilities caused by management decisions Inefficient production rates due to stretching out programs Failure to fund for contingency Failure to fund projects at realistic cost`` Project Death March Where the project team feels the project is destined to fail because of factor such as unrealistic deadlines and design/architectural problems but is being continued for reasons such as to justify the project sponsor whose idea the project was and who championed it over its development and implementation lifecycle. Brook’s Law Adding manpower to a late software project makes it later. Strategic Misrepresentation Deliberate, systematic distortion or misstatement of facts such as costs, time, complexity or risk in order to get a project initiated. iiiiiiii iiiiiiii iiiiiiii iiiiiiii Sunk Cost Fallacy Irrational loss aversion approach that puts a value on already incurred costs justifying increased investment based on the prior cumulative investment. "Throwing good money after bad". "In for a penny, in for a pound". Groupthink The desire for group conformity that causes irrational or dysfunctional decision-making where group members seek to minimise conflict and force a consensus without critical evaluation of alternatives by actively suppressing dissenting views and by isolating the group from external influences. Ashby’s Low “Only variety can destroy variety” - complexity is needed to process complexity: complex inputs require complex processing. Simple problems have simple solutions. Complex problems have (and need to have) complex solutions. Kruger-Dunning Effect Unskilled individuals with the illusion of superiority, rating their ability much higher than is true caused by an inability of to recognise their incompetence and ineptness. Focalism Tendency to become inwardly focussed, loss of external situational awareness and becoming over reliant on initial information and discounting subsequent information. FFFFM8MM8MM8MM8M pyPSpyPSpyPSpyPS FFFFM8MM8MM8MM8M pyPSpyPSpyPSpyPS FpFpFpFpFpFpFpFp KKKKKKKKKKKKKKKK TMWTMWTMWTMWTMWTMWTMWTMW iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii b b b b b b b b Project Failure Reasons And Causes Ringelmann Effect The tendency for individual members of a group to become increasingly less productive as the size of the group increases. b b Where Are You On The Project Success Dial And Why?

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