How to Fail a Project

Rodel,

In your list, not even a seasoned planners could follow those rules,

So what is the use to have planners? NOTHING!!, CONSIDERED AS FUTILE.

Ref: "Project Management - A System Approach to Planning, Scheduling, and Controlling, Eight Edition.(Section 11 - Planning)"



"11.15 WHY DO PLANS FAIL?"

No matter how hard we try, planning is not perfect, and sometimes plans fail. Typical reasons include:

 Corporate goals are not understood at the lower organizational levels.

 Plans encompass too much in too little time.

 Financial estimates are poor.

 Plans are based on insufficient data.

 No attempt is being made to systematize the planning process.

 Planning is performed by a planning group.

 No one knows the ultimate objective.

 No one knows the staffing requirements.

 No one knows the major milestone dates, including written reports.

 Project estimates are best guesses, and are not based on standards or history.

 Not enough time has been given for proper estimating.

 No one has bothered to see if there will be personnel available with the necessary skills.

 People are not working toward the same specifications.

 People are consistently shuffled in and out of the project with little regard for schedule.

for me, it all rest back to decisions; if the desicion maker decided to use a bad plan, then the project fails; otherwise it won’t

Project fails , if the owner gives you the unrealistic completion date.



Take this case, A project is suppose to finish one year duration , then the owner will tell you, I need it to complete it within one month.



I would ask you , can you do it?



Even, you allocate thousands of battalion resources , this won’t work, if it has space constraint.



this is just a simple example...

Sure ,all got what i mean.....

Adding to what I had said, Cost Overruns possible due to Scheudule Overruns in the form of very high IDC (Interest During Construction).

Dear All,



Are we broadly in unison as regards once thing that NPV <0 or IRR(Actual) « IRR (Projected) necessarily implies project has failed?



If that is so, then Cash Outflows has necessarily far outstripped Cash Inflows.



Cash Outflows can be phenomenal if project has suffered Cost Overruns and Schedule Overruns.



Schedule Overruns possible if :



a. Delay owing to wanting of Statutory Approvals, Design Changes or Held-Ups, Insufficient Good for Construction Drawings in time, delay in payments (Consultant, Contractor etc).



b. Insufficient resources: equipment, manpower, materials. Can be due to improper lead time management.



c. Acts of God holding up project progress.



Project Management fallouts not considered since this is self-correcting in most cases.





Cost Overruns possible if:



a. Change in scope, variation, legislative changes, unbudgeted expenses (improper budget)



b. Project rendered operationally unproductive (exorbitant operational & maintenance cost)





Now, low Cash Inflows possible if:



a. Significant shift in target market due to change in demography, change in taste



b. Cheaper, better alternative(s) available in the market owing to technology shift





I have noted the maximum points I could generally visualize. Any more from your end would be most welcome.



Thanks and Regards,

Dev

After 20 ish replies on metrics, i think we can now move onto the threads actual question.

Dear Oliver,



I had specifically noted let us first note in the first posting to this thread that let us first note the metrics or measurable parameters or identifiable signs for a project tending towards failure or failed. We can go into the specifics later.



I have not downloaded the information. I have only taken the liberty to extrapolate the ratios which we normally use to monitor the performance of our projects.

The threads asks why do projects fail.



A schedule variance just indicates that you are late, it doesn’t explain why.



Low productivity tells you that staff aren’t producing to the level of effort budgeted in the baseline, but it doesn’t explain why.



A bad planner can tell you there is a delay.



An average planner can tell you the reason for a delay.



A good planner would know the reason for the delay and would suggest a course of action.

The threads asks why do projects fail.



A schedule variance just indicates that you are late, it doesn’t explain why.



Low productivity tells you that staff aren’t producing to the level of effort budgeted in the baseline, but it doesn’t explain why.



A bad planner can tell tou there is a delay.



An average planner can tell you the reason for a delay.



A good planner would know the reason for the delay and would suggest a course of action.

Where did you download that information from !!!

Plzzz note the corrections:



Metrics for project failure as follows:



1. Milestones Achievement Ratio (MAR) [Actual No. of Milestones achieved / Planned No. of Milestones Achievement] is consistently less than 0.70 (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



2. Schedule Variance (SV) [BCWP – BCWS] « 0 or < 0 ie., behind schedule consistently (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



3. Cost Variance (SV) [BCWP – ACWP]] « 0 or < 0 ie., overrun by more than 33% and the because of the overrun the project shall never have an NPV > 0 and / or IRR (Actual) shall be sufficiently less than IRR (projected).



4. Efficiency Ratio (ER) [Actual percent completion factor / Planned percent completion factor] is consistently less than 0.70 (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



5. Staff Productivity Ratio [Total Value of Work Done (including materials used in project) / Avg. no. of Engg. & Supervisors on site] is consistently less than USD 0.01 million (throughout 75% of the project duration) and can’t be made up sufficiently to finish the project in the remaining 25% duration.



Machine Downtime Ratio etc. can further included as a metric.

Dear All,



Can we note the metrics for project failure as follows:



1. Milestones Achievement Ratio (MAR) [Actual No. of Milestones achieved / Planned No. of Milestones Achievement] is consistently less than 0.70 (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



2. Schedule Variance (SV) [BCWP – BCWS] « 0 or < 0 ie., behind schedule consistently for more than 0.70 (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



3. Cost Variance (SV) [BCWP – ACWP]] « 0 or < 0 ie., overrun by more than 33% and the because of the overrun the project shall never have an NPV > 0 and / or IRR (Actual) shall be sufficiently less than IRR (projected).



4. Efficiency Ratio (ER) [Actual percent completion factor / Planned percent completion factor] is consistently less than 0.70 (throughout 75% of the project duration) and can’t be made up in the remaining 25% duration in spite of crashing the project.



5. Staff Productivity Ratio [Total Value of Work Done (including materials used in project) / Avg. no. of Engg. & Supervisors on site] is consistently less than USD 0.01 million (throughout 75% of the project duration) and can’t be made up sufficiently to finish the project in the remaining 25% duration.



Machine Downtime Ratio etc. can further included as a metric.



Please revert with your comments, suggestions, etc.

sory, I mean Johny, not Jhonny...

Some very good comments,

But one missed which we see every day “Blame The Other Guy”

There are too many managers who do not take actions against idiots who can not do there job.

I have given up counting the actions which so many people let slip, "they did not have time" and "I forgot"; meanwhile the project is slipping as well.



Actions should be followed up promptly.

Blame should be added to the correct person.

Project Manager should cut off useless people from the project, send a message that if you do not do your job your out.

Jhonny,



"Planning was performed by a planning group"



Maybe you should give them a break!!!





Regards,





Arman

Remove one of the item in the equation:



Success = 4M+C



M1 : Material

M1 : Manpower

M1 : Machine

M1 : Method



and

C : Commitment



I’m sure your project fails.....

-unproper and unsufficient design during design stage.

-selection for unsuitable contractorduring tender stage.

-during construction stage:-

-lack of resources.

-lack of professional staff.

- bad management.

-no proper following up.

- no actions.

- slow actions.

- physical obstructions.

-adversed climatic conditions.

All,



As the metrics by which project success is measured constantly changes, how do you know when you’ve failed?



Environmental impact and socio-economic impact are now just as important as measures of success as cost and schedule.

Dear All,



Can we list down the specific metrics based on which we can say that a project has failed or is heading towards failure?



Rgds

Hi,



Some basic terms:

1- Future value

2- Cost/Benefit ratio

3- Net present value

4- Feasibility studies

If misunderstood, can lead to project failure.



Regards,

Karim

Hi Guys,



You seem to have covered quite a lot of ground already, but I don’t think anyone has mentioned projects which never should have been started int the first place. Usually these are a ’dream’ or an item on the wish list of a member or members of the Board of Directors.



These ’projects’ are usually not essential, frequently really bad ideas and sometimes downright disasters. It can be obvious, right from the start, that they are going to fail but because a member of the Board is pushing them, they get first call on resource. It’s not until a lot of money has been wasted that somebody with sufficient clout realises "Oops, we shouldn’t be doing this" and pulls the plug.



Chris Oggham

No matter how hard we try, planning is not perfect, and sometimes plans fail.

Typical reasons why plans fail include:

Corporate goals are not understood at the lower organizational levels.

Plans encompass too much in too little time.

Financial estimates were poor.

Plans were based upon insufficient data.

Planning was performed by a planning group.

No one knows the ultimate objective.

No one knows the staffing requirement

No one knows the major milestone dates.

Project estimates are best guesses, and are not based upon standards or history.

Not enough time was given for proper estimating.

No one bothered to see if there would be personnel available with the necessary skills.

People are not working toward the same specifications.

People are consistently shuffled in and out of the project with little regard for schedule.

Well this most certinly will be an interesting discussion thread to read indeed.



From my small amount of experience (6 years), the top ones are, in no particular order;



The management (PM’s, Resource managers, Maintenance managers, the whole lot of them), making rash decisions without considering the consequences.



The project team members doing extra work because they’re not fully across the scope of their work package.



The customer trying to slip in some extra scope, and the management allowing it so they appear to be helpful, and then the customer expecting this everytime. (and the management doing it everytime, then questioning why we’re 3 times over budget)



People thinking that planning is only a nice to have or worse still a hinderence to propper project management.



The fact that when you look at the mathematics in the schedule, 1 plus 1 will always equal 2 unles your the PM and then you want to make it equal ’E=MC2’, because that’s how fast you will have to work to recover the schedule because they weren’t familiar with the scope, specs, requirements or anything else to do with the project when they told the customer they could have the whole thing designed, built, installed & commissioned a week from Thursday just before lunch.



Then we could talk about lead times on equipment, and the PM that always asks why there is a lag of 6 months on ther logic between ordering and receiving the bits and pieces.



Then someone inevitably brings up the fact that we don’t have enough resources. Of course this is explained away by the fact that everyone always over estimates the jobs, so they put graduate engineers on the job and expect the design to get through on the first pass.



So as Dennis said in his post ’This should be a great discussion/rant’



So lets see what else we can list



Andy

Hi Guys,



I haven’t participated in a project which really failed. Although there were major serious problems or issues encountered, but those were resolved along the way.



The following is my the top 4 issues that were causing serious threat to the project(s):



1. Engineering & Design Issues for Construction contract only;

2. Poor management of Major Changes Orders/Variations;

3. Flawed Estimates/Budgets (Denis).

4. ROW Acquisition (New Expressway Construction).



Some other factors that if not properly taken into account that would potentially influence the outcome of the project:



1. Supervisors or members of the project management team especially new members that are not familiar with the manpower and equipment norms of the company;

2. Availability of competent skilled workers suited for the project;

3. Improper & Insuffecient construction Equipment and Tools (i.e. Insuffecient Tower Crane Hours for High Rise Bldg. Construction);

4. Physical Working Conditions;

5. Access to Work;

6. Construction Programme incl. Resource Loading & Unaccounted interruptions;

7. Materials Coordination & Availability;

8. Communication;

9. Workers Labour Union.





Regards,



Arman

This should be a great discussion/rant.



For me, it has always been the project manager. Sure, there can be flawed estimates/budgets, unrealistic expectations, and foolish clients, poor communication, but the PM is ultimately responsible. He has to address those issues. It is his team, his project.