10 Warning Signs of Project Failure

10 Warning Signs of Project Failure
By Allen Bernard
October 18, 2007

Unless you are in a mature industry such as banking or insurance, where information is the life-blood of what you do, chances are you will be familiar with at least some of these 10 project management failings put together by Robert Francis Group analyst Mimi Ho.

"One, they're right on the button and two, if you take a look at the large majority of them, it all has to do with project planning and early stages of analysis that companies like to jump over," said Jeff Monteforte, owner of Exential, an independent project management consultancy in Cleveland, Ohio.

In other words, when IT projects fail it rarely is a result of the technology. At its core, project management is all about people.

"Even in some of our clients, some of them are doing very well … and others are just starting where they don't even have executive support and they get the executives saying 'Just start the project I don't care what you do'," said Ms. Ho. "And projects fail … and they're like 'It's IT's fault.'"

The Top 3 problems Monteforte, a 20-year veteran of the project management business, encounters most often are: lack of executive support; changes to project scope and the lack of change management; and failure to establish user expectations which leads all too often to unrealistic deadlines.

The Top 3 project killers he encounters are: lack of executive support; lack of pre-project planning; and insufficient people (not monetary) resources allocated to get the project done.

Ms. Ho also sees the same problems—especially lack of executive support—as Monteforte but adds poorly defined project requirements to his lists.

"You need to speak with stakeholders directly because the bill changes or they visualize the project being a certain way but when it's communicated the project could be different," said Ms. Ho.

According to RFG and Ms. Ho, what follows, in no particular order, are the 10 most common pitfalls to successful project completion:

Undefined or poorly defined project requirements. - Project managers should collaborate directly with key project stakeholders to define specific detailed project requirements and deliverables. Defining specific project requirements is necessary to maintain alignment of project tasks to desired business outputs, as well as to ensure that projects have clear and specific project objectives established.

While this step may seem obvious, many companies will skip this stage and go right to solutions to jump start a project. Business and/or IT executives assume the requirements (such as controls, dashboards, data, dependencies, functionality, integration, metrics, outputs, and workflow) are met without performing any confirming analysis.

These projects tend to fail and the companies usually encounter over spending, project restarts, rework, and/or unmet expectations.

Lack of project planning. - Once the requirements are known, then conducting thorough, upfront project scope planning is an essential next step to help project managers and stakeholders accurately and clearly define project scope.

It is important for people to understand that there is more than one way to achieve the requirements and that scope and cost vary by approach. Project scope management is therefore necessary to develop reasonable project estimates, enhance the management of customer and stakeholder expectations, and mitigate project risks such as cost overruns and schedule delays.

Project managers should establish and standardize a scope management process to develop concise project scope statements and credible budget and schedule estimates.

Lack of or poorly developed budget forecast. - Thorough research and preparation is necessary to develop a reasonable budget estimate. Many companies will skip this step or just do a very rudimentary estimate due to the amount of work needed to complete the task.

Some companies that do not maintain internal archives of project costs turn to external consultancies to acquire external spending/budget information on companies that have completed similar projects in a similar market.

Using the estimated budget, project managers should collaborate with stakeholders to help further refine the project scope and final deliverables. Project managers should use their initial budget to base actual spending plans as well as to proactively track spending and respond quickly to potential issues to prevent shortfalls in the budget.

Lack of stakeholder involvement. - Project managers should ensure that primary project stakeholders are involved with the project from the beginning and throughout the entire project. This is crucial to ensure that visions are properly communicated, defined, and verified.

It is very common for project efforts to be delegated to staff that do not have sufficient knowledge or understanding of the desired effort. As a result, projects are defined incorrectly and the projects delivered do not meet the expectations of key stakeholders.

Lack of executive support. - An IT project can be highly political and may end up involving an excessive number of unnecessary or incorrect participants. IT executives should seek ongoing senior management endorsement and enforcement of the planning process to keep the effort on track and to minimize pushback from line of business (LOB) managers.

Support from senior management and staff involvement are both needed to drive and keep the effort focused and moving. Ownership of the project must be shared to satisfy the demands of user management. IT executives must convey this message to senior management to retain involvement and participation.

Frequent or large changes to project scope. - Scope changes can significantly impact the cost, schedule, risks and quality of the entire effort. Project managers should watch out for early and frequent changes to the project scope.

While scope is defined early in the planning and estimation phases, there are valid reasons for change. For example, a stakeholder may acquire additional insight into a problem during the course of the project or external market conditions and/or government regulations can drive requests that extend beyond the initial project scope. However, changes to project scope can also occur as a result of developing a poor initial scope document.

Project managers must ensure that adequate time is spent on defining and refining the work effort directly with key stakeholders.
Lack of change management process. - Project changes will occur. However, uncontrolled changes and insufficient change management processes will increase the probability of project failure. A formal and structured change management process is necessary to ensure effects of any changed requirements are properly analyzed, prioritized, and balanced according to the project's budget, schedule, and scope.

Project managers should consistently and publicly take a phased approach to projects, so that users understand that not all changes must be completed for the current release. This will help acceptance of trading off specific desired changes for faster availability of greater functionality. This will also help reduce the impact of change onto the project, and allow for cost and time containment.

Failure to establish appropriate client/user expectations. Disputes often occur as a result of mismatched expectations. Missed project targets will cause delays, rework, and additional project spending. Setting user expectations is necessary to establish a baseline of what and what not to expect from the final deliverable.

Project managers should work with key stakeholders in establishing and prioritizing project requirements as well as reviewing budgets and schedules. Additionally, all people involved in the project effort should have periodic joint sessions, to ensure the same communications on project expectations are received by everyone.

This process helps keep users involved and abreast of the project's status, as well as minimizing the potential for misunderstanding of project expectations between stakeholders.

Unrealistic deadlines. - Stakeholders want their projects completed now. In some harsh environments, they may question IT's commitment and effort. IT executives and project managers must work with stakeholders to help them understand what is possible with the level of incumbent IT resources.

Project managers should collaborate with key stakeholders in defining reasonable project schedules and deadlines to ensure that business conditions and requirements are met and better manage expectation levels.

Project managers will need to ensure that project cost, scope, and time are optimally balanced to achieve the desired deliverables and the desired time. Effective planning and monitoring are necessary to help develop a strong start for the project. However, project managers must remain aware and anticipate change as re-planning is necessary throughout the project.

Insufficient resources. - Required resources are often underestimated and scheduled inaccurately. Companies often encounter problems with resource allocation, as many companies to do not spend sufficient time on resource scheduling and proper management.

In fact, it is very common for companies to overestimate the on-boarding of staff to a project, which immediately causes the project to be late and in trouble, impairing IT's image with LOB managers and executives. In addition, resources are often utilized ineffectively, especially when individuals are required to support multiple projects concurrently. Insufficient resource supply will cause delays and impact overlapping projects.

Project managers should plan according to the established project schedule estimates and work with concurrent project schedules to help ensure that resources are properly scheduled.

Summary

All companies have experienced projects that have gone over budget, schedule, and scope. However, project managers can learn from past historical data, experiences of peer companies, and project management organizations.

Taking a proactive approach to preventing project failure is a necessary first step to overcoming repeated failure. Sufficient research and planning as well as patience in establishing necessary project processes are essential to developing a solid project management foundation.

Project managers must ensure that the initial project plan is strong enough to sustain the project throughout its life cycle. A project plan should be assessed on the project's alignment with business strategies, budget, the cost/benefit analysis, relevance, resource requirements, and scope to help determine its value contribution to the enterprise.