Why Projects Fail (And How to Avoid the Pitfalls)

You can't do everything. Here's how to make your project a success.

By Colleen Baumbach

An age-old saying reminds us that "We can do anything we want, but we cannot do everything we want." All firms face this classic conundrum. No matter what the industry, organizations must deliver an increasing number of projects and programs while maintaining steady or decreasing budgets and resource levels. In such an environment, only one outcome is possible: project failure.

Project failures are becoming an accepted norm. The oft-referenced, now decade-old, Standish Group Chaos Report cited a 31 percent project failure rate, effectively lowering the bar, and along with it any optimism for a successful project effort.

Project failure can be easily attributed to a number of factors. Six areas in particular are the biggest and most common failure culprits: constituent alignment, proactive risk management, performance measurement, project scope definition and management, critical project communication and methodology usage. We'll discuss each area and suggest ways you can avoid the classic pitfalls.

Constituent Alignment

Successful projects deliver in large part because of an engaged set of stakeholders. Be they business unit executives, sponsors, or executive management, the "chain of command" is generally an active participant in the successful project. Clearly, any initiative will suffer immensely if the sponsor is not committed or if the key players are unable to develop a cohesive project strategy and supervise the effort.

The alignment issue is key in cases where the project's goals are not in step with the organization's basic vision. An effort to open key markets in Asia when the organization is devoting resources in Europe is a simple example.

To avoid a common pitfall, set a clear set of defined goals and objectives and review them throughout the term of the project. Any course corrections (or project cancellations) can become routine in this process. Consistent communication, in a standardized format, to the major stakeholders also helps. Remember, it takes the average person seven viewings of the same message before it starts to resonate.

Proactive Risk Management

An under-reported cause of project failure is risk management. In many cases, project risks are not proactively identified, analyzed, and mitigated. Even in cases where risk is an active part of the execution process, the rigor devoted to proactive risk management is negligible. Too often, problems are addressed reactively, causing schedules and budgets to be exceeded. This results in schedule slippage, budget overruns, and excessive staff overtime and burnout.

To avoid falling behind schedule or exceeding your budget, use an integrated and proactive risk management approach to all your project efforts. This includes developing and publishing the risk management plan and educating the entire project team on the benefits of performing risk management. At a more granular level, integrate the project risks you identified risks with your project's scope, schedule, and cost. Additionally, maintaining a risk log and making the data available to all via reports helps tremendously.

Performance Measurement

This area receives a great deal of lip service, but little about it is understood. The lack of project performance measures prevents all parties from having visibility into the overall status relative to the project plan at any point in time. As a result, troubled projects are not highlighted in time for remedial action, appropriate corrective measures are not identified, all leading to poor product/service quality.

To avoid this pitfall, use standardized project performance measures and establish project baselines for schedule, effort, product, etc. The role of earned value management (EVM) is important here, even in small projects.

Project Scope Definition and Management

Does this sound familiar: The project has vaguely-written scope definitions; there are problems gathering user requirements; there is pressure to build before the project is adequately defined; and there is no rigorous scope management.

This is one of the classic cases of project failure waiting to happen. It may sound trite, however, project scope must be clear, concise, and unambiguous. It must be clearly and commonly understood by project stakeholders, team members, and executives alike.

We recommend reviewing the project's scope with your user community to obtain complete buy-in to what the project will deliver and how the work will be done. Obtain agreement on what is in, and out, of scope. It may be appropriate to create and use a formal change control procedure, including a change control board.

Critical Project Communication

Project managers and stakeholders must be aware of project progress and challenges at every stage. Unfortunately, stakeholders are informed of critical issues at a stage when the impact on costs, timelines, and scope are significant. Inadequate communication of project status and issues is a function of stakeholder needs and expectations not being managed appropriately. Obviously, resolving the issues takes time away from planned project activities. This issue will affect any part of the project.

To avoid such problems, create a communications management plan comprised of two parts: project communications and stakeholder communications. These activities must be initiated at project kickoff, with particular effort put into performing a stakeholder analysis to identify expectations and communication needs.

Methodology Usage

The role of methodologies in delivering a successful project is often overlooked. To be sure, a variety of project management and related standardized processes are available. These include the Project Management Institute's (PMI) Project Management Body of Knowledge (PMBOK) guidelines, the Projects in Controlled Environments (PRINCE) project management methodology from the U.K.'s Office of Government Commerce, along with more governance-oriented frameworks such as the IT Information Library (ITIL) and Control Objectives for Information and Related Technology (COBIT) (a set of best practices for IT management created in 1992. The choice of a methodology, whether standardized or organization-specific, is secondary to its usage and adherence during project execution.

It's vital that you enforce the chosen methodology, a task made easier by using automation and tools that incorporate project workflow into the overall project execution lifecycle.

The Expectation of Failure

Projects do and will fail, and although perception has much to with the definition of failure, that perception is often steeped in reality. However, these perceptions do not address the larger mindset issue that all projects are burdened with right from the start: the expectation of failure.

Ten years of project failure statistics have taken their toll. The anticipated eventuality of failure is built into the project from the very beginning and is an unwritten reason for a project's demise. Overcoming this complacency requires a strong project leader and supporting project management office, a cultural bias to succeed, and a strict communication policy highlighting successes.

Avoiding the pitfalls we've noted will not guarantee a successful project. They will, however, provide a solid footing and foundation from which to begin executing against the project's objectives and strongly influence a successful outcome.

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Colleen Baumbach is the senior director of strategy for projects at Oracle Corporation. You can reach the author at colleen.baumbach@oracle.com
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