Eight Causes of Project Failure
By Neil Ryder
In the current fast paced modern environment the need to increase efficiency and effectiveness and reduce financial resource risks are an ever present fact of life. Driving the required changes to operating practises requires the successful implementation of the projects involved; a factor that is critical to ongoing success. So what is the evidence that shows how well project delivery is being achieved?
The National Audit Office (NAO) and the Office of Government Commerce (OGC) recently issued a report over their concerns on project success. The press also makes it very clear that many public sector projects fail spectacularly. Anecdotally there is a wealth of evidence that the success rate of projects across both the public and private sectors leave a lot to be desired.
Hard evidence comes from The Standish Group who produce reports based on research into the success rate of projects. Their statistics are a recognised benchmark and show that;
- 31% of projects are cancelled before being finished.
- 53% of completed projects are completed, but impaired.
- Average cost overruns of 189%
- Average time overruns of 222%
- 16% of projects are completed on time, on budget, and on scope.
Based on these findings and our own experience it is fair to say that
over 80% of all projects will fail to deliver the desired organisational outcome.
So what are the causes of project failure?
- Lack of clear link between the project and the organisation’s key strategic priorities, including agreed measures of success.
- Lack of clear senior management ownership and leadership.
- Lack of effective engagement with stakeholders.
- Lack of skills and proven approach to project management and risk management.
- Too little attention to breaking development and implementation into manageable steps.
- Evaluation of proposals driven by initial price rather than long-term value for money (especially securing delivery of business benefits).
- Lack of understanding of and contact with the supply industry at senior levels in the organisation.
- Lack of effective project team integration between clients, the supplier team and the supply chain.
Neil Ryder is the Managing Director of if only … ltd – a new breed of business consultants specialising in organisational transformation.. They work hand in hand with management teams to build sustainable exceptional performance in people, teams & organisations.