Capital projects involve an intricate coordination of interdependent activities, resources, and stakeholders to fulfill three (3) primary project expectations: scope, cost, and schedule. When one of these three outputs changes, which inevitably occurs, the other two factors likely increase. This creates havoc to internal budgets, financial metrics, and internal support (a.k.a. – politics.)
Bad news: Projects fail more times than not. Industry surveys covering over 1000 major companies show an average project failure rate of 55% (range from 40 % to 70% failure). The top-noted failure criteria include: 1) finish on-time and in-budget, 2) Exceed budgets, 3) Blown schedules, and 4) Failure to meet requirements. Common reasons offered for these failures include: 1) insufficient up-front planning, 2) incomplete estimates, 3) ignoring requirements, 4) underestimating productivity, 5) poorly defined performance indicators.
Good news: Industry surveys of over 60 companies show that when Project Management Best Practices are applied, projects are highly successful, beat industry averages (Figure 1), and provide distinctive competitive advantages. Keys to this success includes: 1) careful and complete up-front planning, 2) strongly implemented organization and execution methodologies, 3) complete pre-project risk evaluation, 4) full knowledge of contract provisions, 5) relentless tracking of cost and schedule changes, and 6) transparent communication to all stakeholders, 7) immediate problem resolution.
Successful projects require constant and active participation by all stakeholders to avoid pitfalls and identify opportunities for success. Focusing on the goal of beating the average requires attentiveness to the above key success factors that will drive project success.