The top 10 reasons why projects fail

Johannesburg, 12 Jul 2001

Business requirements change so quickly these days that, unless the project manager is fully aware of the issues at a business level, even a project that delivers the planned scope within time and cost may be deemed unsuccessful because its deliverables are no longer relevant to the business.

The latest statistics from the GartnerGroup state that 30% of IT projects never come to a fruitful conclusion. On average 51% exceed budget by 189% while only delivering 74% of the originally stated functionality.

Factors that have driven this poor performance range from severe lack of disciplined project management to lack of communication between IT organisation and business-unit directors.

It is essential that project managers have a solid understanding of the enterprise`s business objectives so that they can continually measure their projects in terms of delivering these business objectives.

The top 10 factors that have driven failed projects are:

1.       Project sponsors are often not committed to the objective. They have a lack of understanding of the project and are not actively involved in the project strategy and direction.

2.       Some projects do not meet the strategic vision of the company. If business needs are not clearly defined, it will result in a project that does not add value to the bottom line or enhance business processes.

3.       Projects are started for the wrong reasons. Some are initiated purely to implement new technology without regard for whether the technology is supportive of the business needs. The converse of this is a project that does not support existing technology, resulting in major scope creep and resultant expenditure.

4.       Staffing is a reason for failure, eg not enough dedicated staff (project managers and project team members) allocated to projects. Project team members lack experience and do not have the required qualifications. Line-staff believe that they will be able to manage projects but are only 40% available to do so. Focus in this regard is not on the delivery of the project, but on the comfort zone of the project manager and his own time management.

5.       Incomplete project scope. No clear definition of the project`s benefits and the deliverables that will produce them.

6.       A project plan that is non-existent, out of date, incomplete or poorly constructed and just not enough time and effort spent on project planning.

7.       Project value management is not put into practice to evaluate baseline cost agreed during baseline transfer against actual costs spent at any given time. Project costs and financial do not form an integral part the project during execution.

8.       Insufficient funding, and incorrect budgeting is still a major reason for projects not delivering their goals and objectives within the quality framework that was required, because projects always need to deliver yesterday within X budget.

9.       No formal project management methodologies and best practices aligned to the company`s specific needs are used to assist project performance. Companies do not want to invest in best of breed methodologies that will benefit the bottom line over a period, with projects delivered within budget. Companies do not recognise the value of using a methodology to support and enable them to record their own best practice project results for future reference, and to build a knowledge base within the company.

10.   Not all project are going through a formal signed off process using a proper post mortem process to determine lessons learned and to build their own reference model for future use. A certificate signed off between sponsors and other third-parties will demonstrate project success but even that is quite seldom.

Next week, Pieter Meyer will answer the question "Does a project manager need industry specific skills in order to add value to a project?"




In just three years the AST Group has established itself as one of the leading information and communication technology companies on the JSE Securities Exchange.

Its consistent creation of value for shareholders, clients and employees has resulted in a steady increase in monthly revenue to the R100 million plus mark. AST is now the fourth largest South African IT company by market capitalisation, and is one of the top three in terms of physical infrastructure (mainframes, servers, desktops, and networks under management) and geographical footprint with over 62 physical locations.

Counting almost 90% of the top 100 JSE-listed companies among its clients, the AST Group services mostly large corporate and government clients, but is increasingly offering its services to rapidly evolving small and medium enterprises.

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