Lackluster Project Management Leads to Lost Productivity, Time and Money
ESI International (News - Alert) and the project benchmarking company, Independent Project Analysis (IPA), recently conducted research that determined that troubled projects are costing taxpayers millions of dollars.
According to the findings of the study, while 34 percent of all projects succeed, an average of 15 percent ultimately fail. Projects generally are considered to be challenged when the cost gets out of hand or the schedule overruns. Challenged projects account for 51 percent of all projects.
In 2002 alone, the lost dollar value for U.S. projects was estimated at $38 billion, with another $17 billion in cost overruns, for a total project waste of $55 billion vs. $255 billion in project spending, according to The Standish Group.
ESI and the IPA also noted that 59 percent of organizations in the Asia-Pacific region had at least one project failure with an average cost of $8.9 million. According to KPMG International, Africa, Europe and the Americas had an average of 56 percent of the organizations reporting at least one project failure with an average cost of $11.6 million.
The study also found that troubled projects are not limited to only one geographic area or one country. Cost overruns coupled with failed timelines lead to sidetracked projects and eventually wasted resources of time, dollars and people in countries all around the world.
In addition, only 13 percent of the executives felt their IT projects had delivered the promised features and functions. The primary cause identified for the IT project problems was poor project management.
“Projects with poorly defined scope, undeveloped teams, and whose cost and schedule lack detail at the time of execution are more likely to not meet business objectives,” said Mary Ellen Yarossi, director, IPA Institute, in the statement.
“When a project fails, it’s important to first acknowledge what’s happening,” Ward said. Signs of failure include strained team relationships, long hours and threats of legal action. “Troubled project recovery is one of the greatest challenges a project manager can face, but the pay off is enormous.”
Without proper management, enterprises and government entities are wasting valuable resources that could be spent on profit and revenue generating practices. The first step in fixing the problem is first being able to identify it. If the findings of this study fail to generate questions in both the commercial and government sectors, the problem may be bigger than previously suspected.