NEWMANagement Strategies: How Often Do Projects Fail & Success Factors

Thursday, March 1, 2012

How Often Do Projects Fail & Success Factors

How Often Do Projects Fail and How Can This be Measured?

In a 2003 article Julia King(10) reports, "At companies that aren't among the top 25% of technology users, three out of 10 IT projects fail on average.

Translation: for these companies an amazing 30% of IT projects fail.
Now if you are an extremely optimistic person you might conclude the good news is that 70% of these projects succeed. But note that King does not tell us how many of the 70% of the "successful" projects were over budget, over time, or defective in function upon completion.

According to the 1994 Standish CHAOS Report, there are.

The top 5 factors found in successful projects are:

1. User Involvement

2. Executive Management Support

3. Clear Statement of Requirements

4. Proper Planning

5. Realistic Expectations

These are the top 5 of 10 listed in the report. The report concludes that these were the elements that were most often pointed to as major contributors to project success. Will these elements alone guarantee success? Never. But if these are done well, a project, according to the
Standish Group, will have a much higher probability of success.

The next category of differentiators from the Standish report deals with projects that proved to be "Challenged;" that is they were completed buy were over budget, over time, or did not contain all functions and features originally required.

The top 5 indicators found in "Challenged" projects are:

1. Lack of User Input

2. Incomplete Requirements & Specifications

3. Changing Requirements & Specifications

4. Lack of Executive Support

5. Technical Incompetence

And finally a list of all the top factors found in "Failed" projects

1. Incomplete Requirements

2. Lack of user involvement

3. Lack of Resources

4. Unrealistic Expectations

5. Lace of Executive Support

6. Changing Requirements & Specifications

7. Lack of Planning

8. Didn't Need it Any Longer

9. Lack of IT management

10. Technical Illiteracy

Notice in the above three project outcomes, user involvement is listed as the first or second item in each.

Above excerpts from:
Robert Frese
Dr. Vicki Sauter
UM-St. Louis, December 16, 2003

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NMA sample Project Plan outline with descriptions

Newman Management Associates PM template – all rights reserved 2002 NMA

Project Plan
For
Project Name

By
Project Manager's Name and/or Team Members

Revision Number:
Date of Revision:

Prepared by:

Approved by:
Approved by:
Revision Number:
Date of Revision:

Prepared by:

Approved by:
Approved by:

Table Of Contents

1.0 Introduction

2.0 Project Overview and Charter

3.0 Goals and Objectives

4.0 Statement of Work and Scope Requirements

5.0 Work Breakdown Structure and Dictionary (optional)

6.0 Schedule

7.0 Project Staffing (optional) Responsibility Matrix

8.0 Estimate-time phased Budget/Resource Requirements

9.0 Assumptions

10.0 Risks

11.0 Project Reporting and Control

12.0 Change Control

13.0 Constraints

14.0 Communication Planning

15.0 Quality Planning

16.0 Contracts and Procurement Planning

17.0 Project Completion

Project Plan Outline

1.0 INTRODUCTION
Problem/Opportunity Statement which serves as the genesis for the project

2.0 PROJECT OVERVIEW AND CHARTER
General description of the project including goals, length, risks and benefits. Also prepare a Project Charter which identifies project purpose, impact statement, and interfaces with outside organizations.

3.0 GOALS AND OBJECTIVES
The Project Goals and Objectives should include measurable criteria that should be met for project to be considered a success. (Cost, Schedule, and Quality). The results of a project preliminary cost/benefit analysis (ROI, NPV, payback period, etc.) should be incorporated, as appropriate, into this section. The goals and objectives described in this section will be used to:
· Guide project execution, document project planning assumptions and decisions regarding alternatives chosen.
· Facilitate communication among stakeholders and to assist in defining key management reviews.
· Provide a baseline for progress measurement and project control.

4.0 STATEMENT OF WORK AND SCOPE REQUIREMENTS
· The Statement of Work (SOW) is a narrative description of the entire known work scope and should reflect all of the work necessary to successfully complete the project.
· The SOW should be structured into paragraphs and subparagraphs using the same structure reflected by the Work Breakdown Structure (see the next section for more description).
· The requirements for features and functions should be clearly distinguished in that they define what is and is not included in the project.
· Statement of Work preparation that provides for a common understanding of the project scope among the stakeholders. It should include:

A. Project Product - Summary of the product description.
B. Project Deliverables - Dividing the SOW major components into smaller, more manageable components. Exclusions should be identified where possible.

5.0 WORK BREAKDOWN STRUCTURE
A Work Breakdown Structure (WBS) is a deliverable-oriented grouping of project elements that organizes and defines the total scope of the project. It is used to develop or confirm a common understanding of the scope, with each descending level representing an increasingly detailed description of the project elements. Each item in the WBS is assigned a unique identifier, and may be described in a WBS dictionary for each cost account; i.e., manageable chunk of work assigned to a single responsible organization/person for the management of scope, schedule, and cost . It may also be coded to include the cost account structure.

6.0 SCHEDULE
This section describes the schedule processes required to ensure timely completion of the project. The following is an overview of the major processes.
· Activity/Task/Subtask Definition - Identify the specific activities to be performed in order to produce the various
project deliverables. Also identify the milestones which relate to project progress and outcomes.
· Activity/Task/Subtask Sequencing - Identify the inter-activity dependencies, key milestones and constraints.
· Activity/Task/Subtask Duration’s - Estimate the duration of time that will be needed to complete individual activities.
· Schedule Development - Analyze and input collected data into the schedule, analyzing sequences, duration’s and resource requirements.

7.0 PROJECT STAFFING
Using the SOW and Project Work Breakdown Structure to identify necessary skills sets, a project team should be selected and negotiated to perform specific tasks and subtasks of the project scope. The Project Team structure should be matched against the Project WBS in the form of a Responsibility Matrix. A Project Responsibility Matrix should be completed to document the project team responsibilities and duties.

8.0 BUDGET/RESOURCE REQUIREMENTS
There are three major processes covered in the project budget/resource requirement plan to ensure that the project will be completed within the approved budget.
· Cost Estimating - An approximation of the costs of the resources needed to complete the work, with consideration being given to various costing alternatives.
· Cost Budgeting - Allocating the overall cost estimate, based on the scope of work, to individual work items in order to establish the project cost baseline. In turn, this project cost baseline will be used to measure and monitor cost performance.
· Resource planning - Defining required resources necessary to accomplish the work, including development of a Responsibility Matrix to identify team member responsibilities and the necessary communications network for the project.

9.0 ASSUMPTIONS
Assumptions must be formed and utilized in all areas, especially where clear definition is unavailable. The success or failure of an assumption is critical in determining its current or future use in a project. Assumptions should be identified throughout the initial planning phase and documented in this section for all scope/quality, cost and schedule plans. The detailed record of assumptions will identify the assumptions for all appropriate components within the project plan. Key Assumptions for project cost accounts may be documented in the WBS Dictionary. Other assumptions should be documented with the preparation of all other planning documents regarding scope, quality, schedule, and costs.

10.0 RISKS
Risk management consists of procedures that will be used to manage risk throughout the project. This section will provide an overview of the following major processes.
· Risk Identification - risks that are likely to affect the project.
· Risk Quantification - evaluate risks and risk interactions to assess the possible outcomes.
· Risk Response Development - define enhancement steps for opportunities and responses to threats.
· Risk Control/Reporting - track the risks, their impacts, and the effects of mitigation planning and implementation actions.

A Risk Analysis Worksheet can serve to document risk Identification, Quantification, Response Development, and Control/Reporting.

11.0 PROJECT REPORTING AND CONTROL
Reporting - Periodic project reporting of cost, schedule and technical performance should be identified and carried out throughout the project life cycle. This should include identification of reporting content such as distribution lists, management reviews and corrective actions. Recurring project review meetings should also be planned and included in this section.

Control - Management review of project status, corrective action planning and implementation to mitigate project performance problems. Control should be focused in four areas:
· Work scope and technology application - evaluate whether work is being accomplished in accordance with the approved project scope and whether relevant technology is meeting project objectives. Definition of the methods and application of earned value techniques should be documented in this section.
· Cost Control - Monitoring the project cost performance against the project baseline to ensure minimum cost, consistent with the approved scope of the project.
· Schedule Control - Monitoring the project schedule performance against the project baseline to ensure timely completion.
· Risk Response Control - Evaluate how individual performance problems may have an impact across all project objectives: scope, schedule and cost. Carry out comprehensive risk mitigation planning as needed.

12.0 CHANGE CONTROL
Overall change control is concerned with (a) influencing the factors which create changes, (b) determining that a change has occurred, (c) managing changes as they occur. This requires:
· Maintaining sound performance measurement baselines.
· Ensuring that changes to the product scope are incorporated and reflected in the definition of the project scope. The change order log will be the document that will capture all changes.
· Coordinating changes across knowledge areas. (Schedule changes will often affect cost, risk, quality and staffing.)
· Assuring clear change identification, management approval, and formal implementation of the changes in the project baseline.

13.0 CONSTRAINTS
Constraints can have a positive or negative affect on a project. Whenever possible, constraints (internal or external) will be identified for each project. Types of constraints might include (among others):
· Project milestones
· Resource availability
· Delivery dates
· Regulatory agency delay

14.0 COMMUNICATION PLANNING
Project Communications planning includes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. It provides the critical links among people, ideas, and information that are necessary for project success.

The major processes which should be documented herein, to the extent applicable, and followed by the project manager and team include the following.

· Communication Planning - determining the information and communication needs of the stakeholders: who needs what information; when will they need it; and how will it be given to them.All recurring Project meeting planning should be included.
· Information Distribution - making needed information available to project stakeholders in a timely manner.
· Performance Reporting - collecting and disseminating performance information. This includes status reporting, progress measurements and forecasting. Cite appropriate references to Sections 11.0, 17.0, and others applicable in this Project Plan.
· Administrative Closure - generating, gathering and disseminating information to formalize phases or project completion.

15.0 QUALITY PLANNING
Project Quality planning includes the processes required to ensure that the project will satisfy the needs for which it was undertaken. This includes all activities that determine the quality policy, objectives, and responsibilities.

The major processes which should be documented herein, to the extent applicable, and followed by the project manager and team include the following.

· Quality Planning - identifying which quality standards are relevant to the project and determining how to satisfy them.
· Quality Assurance - evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.
· Quality Control - monitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.

16.0 CONTRACTS AND PROCUREMENT PLANNING
Project Contracts and Procurement planning includes the processes required to acquire goods and services from outside the performing organization. These goods and services, or "products" are acquired through six processes.

The major processes which should be documented herein, to the extent applicable, and followed by the project manager and team members are as follows.

· Contract/Procurement Planning - determining what to procure and when, including long lead items.
· Solicitation Planning - documenting product requirements and identification of potential sources.
· Solicitation - obtaining quotations, bids, offers, or proposals as appropriate.
· Source Selection - choosing from among potential sellers.
· Contract/Procurement Administration - managing the relationship with the seller.
· Contract/Procurement Close-out - completion and settlement of the contract/procurement, including resolution of any open items.

17.0 PROJECT COMPLETION
Planning for project completion during the early stages of the Project Life Cycle will be ensure that all of the necessary project completion deliverables are captured. These deliverables could be used for future projects as reference and/or audit purposes.

Project completion deliverables can include but are not limited to the following:

Deliverables
Initial
Final
All
Project Plan
x
x

Scope of work
x
x

Estimate
x
x

Cost Statements
x
x

Change Order Request

x
Schedules
x
x

Monthly Status Reports

x
Engineering Drawings

x

Specifications

x

Summary of Deliverables

x
Project File Index

x
Lesson Learned

x
Other Project Specific

Change Order Log
x
x

NMA

NEWMANagement Strategies

Thursday, March 1, 2012

How Often Do Projects Fail & Success Factors

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