Ensuring project success in a changing world
A successful project is one where the project outcomes are in use by the customer organization, delivering the benefits expected, after the life cycle of the project from concept, definition, execution to finalization has been carried out.
Much knowledge and expertise has been developed on how to carry out projects. And many projects are successfully completed. But there are also many unsuccessful projects.
The data from survey research shows that 30% of projects in the IT sector are cancelled and 50% limp to completion (Gartner). Projects mostly start with enthusiasm, belief and commitment. What goes wrong? Why do things go wrong? Is it possible to predict success or failure at the start of the project? Are some projects more susceptible? And what actions can the project manager take?
Here is a systematic approach to ensuring project success. There are systematic reasons why so many projects are unsuccessful. And there are practical steps that you as project manager can take to make sure you and your project are successful.
This paper looks at:
• Why organizations do projects—to achieve some benefit or benefits
• What drives change to benefits—the mechanisms behind success and failure
• Where benefits change is more likely—projects that are more susceptible
• What the project manager can do to increase success
• Why project managers do not focus on benefits—the pitfalls
• Preparing for Success—Are you ready?
Why Organizations Do Projects
Projects are initiated to deliver benefits to the organization. At the time of decision, the benefits are needed. To realize the benefits, it is necessary to make a change from the current situation. A means of achieving the benefits is identified. A strategy is defined and operationalized by identifying how this means would be put into effect. The deliverables required to bring about the operationalized strategy are identified. Plans are made for the work required to achieve the deliverables, and the work is organized into project(s).
At the start of the project, there is a belief that it will succeed and can deliver the benefits. Often the nature and scale of the benefits changes during the project. Projects that do succeed are those that are seen to deliver benefits once the project work is finished. Those that fail do not.
Exhibit 1. Examples to Illustrate that Organizations Complete Projects to Achieve Benefits
Exhibit 2. Examples of How a Change to the Benefits Causes Change to the Project
What Drives Change to Benefits
There are two fundamental sources of change to the benefits. These sources are present during every project and may cause changes.
The first source of change is that the benefits may be poorly understood.
The first example is a means to track letters received by the Office of the CEO to ensure all letters are responded to in a timely manner. The staff developing the requirements of the work and identifying the deliverables did not know all of what they wanted at the start of the work. Their requirements evolved as they developed a better understanding of their needs, the possible ways these needs could be met, and the potential of such a system to help them.
The final outcome was a system that delivered benefits that were additional to those conceived when the requirements were first written. Expect the benefits and thus the requirements of the project to change as the stakeholders develop a better understanding. Use techniques such as producing prototypes early and often to drive the evolution of the requirements. The second source of change is that the business environment will change. As it changes, the requirements for and the benefits of doing the work will change.
The second example is a system to support the process of selling mobile phones and accessories. The system was nearing the end of development when there was a shift in the business environment. Products based on a new technology emerged. The customer believed these products were very compatible with their current access to the market and type of shoppers who used their stores. The customer wanted the system to support the sale of these items.
Expect the benefits and requirements to change as the business environment changes. Speed is essential; the longer the work takes the more time there is for changes in the business environment to take place. Have the project work deliver early benefits where possible.
Where Benefits Change Is More Likely
Some projects are more susceptible to these changes.
Projects that have a high abstract element such as those involving people, intangibles, processes or a high degree of novelty are more susceptible. Examples can be found among projects in Research, IT systems, or organizational change.
Projects that are less susceptible are those with tangible physical benefits or where the project is incremental, building on experience of similar work. Examples can be found among construction projects or the rollout of IT hardware upgrade.
What the Project Manager Can Do to Increase Success
Understand the Benefits
All projects start with one or many people understanding the desired outcome of the project and the benefits that this outcome will deliver. As the project gets under way and progresses, be sure you as the project manager understand the benefits.
A project manager who understands the benefits and the reasons why the benefits may change can participate in the management and control of the benefits of the project. And thus can deliver a successful project and success for the organization. A project manager who does not understand the benefits the project is expected to deliver cannot understand the impact that changes may have on the benefits. Thus this project manager cannot understand the impact that changes to the benefits will have on the project itself.
Manage the Delivery of the Benefits
Part of your role as project manager is to manage the delivery of the benefits your project was established to deliver.
In order to manage the delivery of benefits, document what they are and quantify them. A template for documenting and quantifying benefits is needed. The project manager should develop a template for each project. It is likely to contain a clear summary statement of why the organization is doing the project (perhaps similar to Exhibit 1), a description of each benefit, the current situation, the change/s that will enable that benefit, the deliverables that are required to enable the benefit, a calculation of the value of the benefit and the assumptions made in the calculation. The value of the benefits would often be defined in monetary terms, although for some projects this is inappropriate.
The project manager can communicate to the project team and any other person the reasons why the project is being done.
Expect the Benefits to Change During the Project and Assess the Impact of Changes
With the benefits documented and quantified, the project manager is equipped to understand the impact on the benefits of changes to business requirements and assess the potential impact of changes in the business environment.
The project manager can also proactively add value by taking advantage of changes that might improve the benefits that may happen during the project.
The change mechanisms persist throughout the duration of the project. Thus the changes to requirements and to benefits can take place at any stage in the project. The project manager should retain an openness to change, even in the later stages of the project.
Changes to the business environment or to the requirements may be radical. Who identifies that a project should be stopped? Projects are not stopped because there are issues with cost, time or quality. If the benefits persist and can be shown to outweigh the impact of cost, time or quality issues, the project will continue. Examples can be seen in the newspapers; articles on projects with major cost or time overruns that nevertheless continue.
Projects are stopped because the benefits will not be realized or the cost will outweigh the benefits. The project manager should be the person in the best position to know what cost and time is required to complete the work and the quality of the deliverables and project outcome.
If the project manager knows the benefits of the project, it is the project manager that can recognize the consequence of change. If the consequence is that benefits can no longer be realized or are significantly downgraded, there may be good reason to stop the project promptly. You can be in control of identifying whether the project should be stopped.
Why Project Managers Do not Focus on Benefits
There are many reasons why project managers do not consider the benefits of the project. Some examples are:
Projects are rarely initiated by project managers. Often, staff in the organization develop concepts and ideas. The project manager is appointed when the work of defining the business need for the project is well developed. The benefits have been identified, the means identified and strategy has been operationalized. The focus of thinking moves to the deliverables that will achieve the benefits, and then to the work required to create the deliverables. This may be the point at which the organization engages a project manager. Also, the organization that employs you may expect project managers to be junior staff or lack business awareness.
This is the first pitfall for the project manager. A focus on deliverables and the execution of the project rather than on benefits.
Project managers can be insulated from the benefits. This can arise in projects that are done for a central function within the customer organization. This is often the case for IT projects. The project manager works with a customer project manager. The customer project manager reports to IT Departmental management. IT Departmental management communicates with Business management. Business management is responsible for the users. And the users are the people who will enjoy the benefits. The communication chain can be too long.
The second pitfall is for the project manager to focus on direct contacts rather than the people who will enjoy the benefits.
Part of the project manager's role is to be an advocate for the project, to keep up enthusiasm and belief and to maintain the commitment of the project team. The project manager is expected always to behave in a positive manner.
The pitfall is the project manager becomes too bound up in being positive to retain a sense of balance and becomes emotionally committed to the continuation of the project. If changes to project benefits threaten the viability of the project, the project manager may not be open to discussion because they perceive it as being negative about the project.
Project managers have few useful tools to help. There are numerous techniques and methods available to assist the project manager to control cost and the use of time. There are tools to assist in managing the quality of the outcome. These focus on deliverables. There are very few tools available to help the project manager ensure the benefits will be delivered.
The pitfall is the project manager is busy with the tools available and thus focuses on cost, time and quality.
Project managers can avoid these pitfalls by actively managing benefits: understanding the benefits of their project, ensuring benefits are delivered and understanding how changes may affect the benefits.
Preparing for Success—Are You Ready?
Focus on benefits. For example, do you have an answer if the Personal Assistant to the CEO of your customer asks, “Why are we doing your project?” Or if a clerk recruited three months ago asks, “Why are we doing your project?”
Expect change to the benefits. For example, you hear on the news that your customer company is being acquired by one of its competitors. What impact will that have on your project? Do you agree with the statement “An IT project that delivers to the original specification is a success”?
Your role is as the Project Manager. Make your role also the Benefits Delivery Manager. You will be able to make your successful projects more successful. And to present the case for terminating doomed projects quickly with clear reason.
Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA