Introduction to the Phenomena of Cost Blowouts Rev 13
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The document discusses mega projects and cost overruns. It notes that surveys find most mega projects experience significant delays and cost overruns, with 50% going over budget and two-thirds delayed. It then outlines a typical project "trajectory" from an initial euphoria phase to later problems and panic as promises are forgotten. Risks are either not understood or disregarded on many mega projects. The document promotes a training program to help project managers avoid cost overruns through improved planning and risk management.
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Some stakeholders haven’t a cluedo about content. Deal with them.
Some stakeholders haven’t a cluedo about content. Deal with them.
Philly ETE - Are Your Developers Bull$h!tt!ng You? And why that's the wrong q...
Philly ETE - Are Your Developers Bull$h!tt!ng You? And why that's the wrong q...
Lean startup 101 (Case Study oleh Fajar Anugerah dan Dondi Hananto di Indonesia)
Lean startup 101 (Case Study oleh Fajar Anugerah dan Dondi Hananto di Indonesia)
MICROLEARNING FOR TRANSFORMATION, NOT INFORMATION TRANSFER
MICROLEARNING FOR TRANSFORMATION, NOT INFORMATION TRANSFER
Introduction to the Phenomena of Cost Blowouts Rev 13
- 1. The Phenomena of Mega Projects Cost Overruns; How Money is Wasted A brief introduction to the award winning research at the Liverpool John Moores University by Brian Jones, M. Sc., M. App. Sc, Director, Triumph ViP Projects Ltd
- 2. Planning to Waste or Save Money? 12/1/2014 © 2014 Brian Jones 2Be a voice, not an echo
- 3. How Most Mega Projects Are Planned 12/1/2014 © 2014 Brian Jones 3Be a voice, not an echo
- 4. Close Scrutiny 12/1/2014 © 2014 Brian Jones 4Be a voice, not an echo Mega projects are being more closely scrutinized today than ever before. To chart a path to success, companies must employ sound methodologies that guide decision making from project start to finish.
- 5. Cost Overruns & Delays 12/1/2014 © 2014 Brian Jones 5Be a voice, not an echo • 80% of PWC respondents said that their projects had experienced a delay, with 46% saying that they had suffered significant delays – in excess of six months. • EY reported that cost overruns in the oil & gas sector will exceed $500 billion. • Grant Thornton surveys of major projects consistently demonstrate that two out of three projects run over time, 50% are over budget, and one in three do not deliver their stated business benefits.
- 6. Typical Trajectory 12/1/2014 © 2014 Brian Jones 6Be a voice, not an echo Unless you take action, it is probable that your project life cycle will follow this trajectory. 1. The excitement of “Euphoria”, everything shiny and new. 2. But it does not last! Problems begin. “Sedimenting”. Boredom with routines and staff turnover, for example. (The shaded area represents the problems). 3. Leading to the “Panic” phase where the Project Team will probably be different from the “Euphoria” phase. Promises made then, now long forgotten…
- 7. Risks • Mega projects cost overruns must mean that the risks are either not understood, • or are disregarded…. • If managers of conventional projects need the equivalent of a driver's license then managers of megaprojects need a pilot's jumbo jet license. 12/1/2014 © 2014 Brian Jones 7Be a voice, not an echo
- 8. The Triumph ViP Programme 12/1/2014 © 2014 Brian Jones 8Be a voice, not an echo The Triumph ViP Training programme. 12 interactive sessions for group learning (18 people; 6 x 3 person Small Groups) . Available on demand online or onsite with the Triumph ViP Wingman option. To free up resources and save 1%, 5% or more you must know what questions to ask.......Then, what answers to require.
- 9. Next Step: Contact Brian! • UK Cell: +44 (0)7515 282952 • Email: brian.jones@triumphvipprojects.co.uk • Email: triumphvipp@gmail.com • Skype: ukusaoz • Twitter: Brian Jones @triumphvipp 12/1/2014 © 2014 Brian Jones 9Be a voice, not an echo
- 10. brian.jones@triumphvipprojects.co.uk triumphvipp@gmail.com Skype: ukusaoz Twitter: Brian Jones @triumphvipp Visit and take the Triumph ViP Test Drive at: VLE Platform: http://triumphvipprojects.co.uk/moodle 12/1/2014 © 2014 Brian Jones 10Be a voice, not an echo Thank You
- 11. Final Words 12/1/2014 © 2014 Brian Jones 11Be a voice, not an echo Quotes: • “Oh my Lord, the rocket I'm sitting on was built by the low bidder!.” • Alan Shepard, the first American to travel into space; • There is a stark mismatch between the skill sets on boards and the challenges organisations face Harvey Nash Board Survey 2014/15 • “It’s unwise to pay too much – but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. • The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it’s well to add something for the risk you run, and if you do that, you will have enough to pay for something better.” • John Ruskin (1819 – 1900)