Big projects in IT, other industries fail for same reasons: expert

Critics are quick to point fingers when analysing the mistakes behind government-IT disasters such as the Queensland Health payroll fiasco or the oft-criticised national broadband network (NBN). However, says one industry expert, big projects in IT, telecommunications, petroleum or any other industry all tend to fail for the same organisational reasons – and they tend to come back to unrealistic expectations.

That’s the judgment of Jim Porter, a 30-year veteran of petrochemical giant DuPont who, in his current role as president and founder of Sustainable Operations Solutions, has consulted across a range of massive projects for organisations including Rio Tinto, Woodside Energy, BHP Billiton and Queensland Rail.

Such projects may produce massive infrastructure assets worth tens of billions, but cost and deadline overruns are common enough that an entire body of research work has evolved to better understand why.

The 2012 PricewaterhouseCoopers Global Project Management Report surveyed 1524 companies in 38 countries and found that project-management maturity had increased dramatically since 2004. However, while effectively project-managed projects would meet or exceed quality standards 93 per cent of the time and meet or exceed projected business benefits 89 per cent of the time, projects were still missing schedule and budget objectives around 30 per cent of the time.

Poor estimation during the planning phase was the single most frequently named cause for project failures, blamed in 32 per cent of failures (lack of executive sponsorship was second). This supports Porter’s contention that the biggest problem in defining and executing large projects is that most organisations simply don’t learn from their mistakes, or the mistakes of others.

“We learn in our lives that on a day to day basis we need to learn from experience,” Porter told GTR during a recent visit to Australia at the behest of project management software vendor Bentley Systems, “but it seems we don’t do a particularly good job on that when we get into a very large project.”

“You might think people would spend more time considering what they should do before they do it – but people tend not to do that. They tend to do the same thing that they did last time. There’s a real epidemic underway with respect to these large project failures.”

Executive imperatives are often to blame, with many large projects emerging out of boardroom thinktanks as “well-intentioned proclamations from a senior group of leaders” without consideration of available budgets or resources. Once the project is approved, often-arbitrary finish dates become written in stone even without consideration of whether those dates are achievable.

“That date becomes the fundamental underpinning of the project,” Porter explains. “It may not be what the project actually costs and how long it should take to do, but it’s like anything else in life: someone in a powerful position comes along and says ‘we need to have the first results from this asset on 1 June 2019’ or whenever. They’ve already set the scope of the project, and they have started off with an unattainable schedule.” – David Braue

This is an abridged version of a story that will run in full in the May-June 2013 issue of Government Technology Review. Subscribe to read the rest.