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What Is the Reason That Projects Fail?
By Jolyon Hallows

Stories of spectacular failures abound. A project that was budgeted at ten million dollars is finally killed when it passes a hundred million. A system that was due at the end of July is delivered at the end of September-two years later. Why do these and less extreme but equally frustrating failures haunt projects?

The most commonly cited culprit is bad estimating. It is the conventional wisdom that technical people cannot estimate the cost of lunch, even given a menu. But this is a myth. Of course, there are poor estimators, but even if the entire estimate were off by a hundred percent, the total cost would do no more than double. This is not desirable, but neither is it comparable to the celebrated overruns-the ones that we speak of in hushed tones, thankful that we were not involved.

In fact, most experienced people can estimate reasonably well, and, in the sweep of a large project, the optimism of some estimators usually balances the pessimism of others. While there are many recurring reasons that projects fail, two stand out as the primary culprits: scope changes and poor project planning.

Scope changes are probably the major cause of failures. The problem with scope changes is not simply that they add cost, but that they add cost out of proportion to their apparent effort. For example, a project estimated at a million dollars grows into a project that, had it been planned that way from the start, would have been estimated at two million. It is tempting to believe that the final cost of the project will be about two million, but it will often be closer to four or five million, because scope changes disrupt planning and development that has already been completed, they entail re-work, and, if they are large enough, they can compromise the underlying structure of the project (think of adding five stories to a ten-story building).

Scope changes are a problem for two reasons. Either the project did not clearly establish the scope at the start or the project manager failed to manage scope change requests effectively. Scope changes are inevitable, but they are not necessarily bad-some consulting companies thrive on them. They are detrimental only when they are not properly handled, that is, when they are not adequately defined, tracked, and managed.

The second major cause of project failure is poor planning and in particular, overlooking project activities during planning. Such activities are not part of the estimates, they do not appear on the schedule, and they have no effect on the plan. When they do appear, they can cause chaos. For example, a project that needs to train a group of users, but fails to define an activity to create the training materials, will founder and hit delays just when it is about to deliver its benefits.

Projects do not have to fail. When trained project managers and teams take project planning and managing scope changes seriously, projects usually succeed. If you want to work quietly on successful projects and are glad to leave the catastrophes to others, learn to control these two essential parts of controlling projects.

Jolyon Hallows is a project manager, author of two books on managing projects, an instructor in a university diploma program in project management, and has personally trained over a thousand project managers worldwide. Jolyon offers his project management training, including a complete curriculum of courses, through his company, Westwind Consulting Services Inc.

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