Price of Success

 

In the last few days two interesting things occurred. First, some notable major project failures came across my desk. Second, we prevented two major projects from failing before they got started.

A number of the project failures that came across my desk ended up in court; an example is the Pennsylvania unemployment compensation system. And while not in court yet, the Scottish police system failed after spending almost $60 million. In our Big Bang Boom report we profiled the United States’ Number Portability project (NPAC). That project is still in development and it will be years before it returns a positive value. In addition, the risks associated with the project are still present and maybe realized.

A few months ago, a client came to us after reading the Big Bang Boom report and asked us to review a similar project. We did, and found the results would be even worse. There were many more partners, the application was very complicated, and the system was only a few years old. There would be tremendous upheaval for months for their internal organization. It would put their end users at risk and they would incur major costs to integrate their systems with the new system. The client then decided the cost and risk were too great and we helped them go in a different direction.

Just a couple of weeks ago, we reviewed a project in Europe that was like the Pennsylvania project. In fact, this organization already failed twice trying to implement the project, with a combined loss of over 100 million euros. We spent a week doing plan reviews, interviews, workshops, project profiles, and optimization clinics. We did a match of our initial project profile against the CHAOS database of 50,000 active projects and found they had no chance of success and a 45% chance of failure. We then offered three suggestions for improvement and reran the profile. That produced a 12% chance of success, but still a 45% chance of failure.

We then set out to reduce the scope and do major environmental improvements, including reducing decision latency and increasing sponsor skills. We did not add project management skills, processes, or PM tools. In fact, we took some away to streamline the environment. We were also able to cut the project scope down to under 10 million euros by focusing on high-value features and functions and creating a minimal viable system. This saved over 60 million euros. Doing this brought the chance of success up to 65%. It dropped the chance of failure from 45% to 12%. The value ratio went from 0 to 300%.

Bill Belichick, coach of the five-time Super Bowl Champions, the New England Patriots, has said the price of success is paid in advance. If you have a big project like the Pennsylvania unemployment compensation system or the Scottish police system you might want to call us in advance. On the other hand, maybe you just want to improve the value of your overall project portfolio. We can do that for you too.

If you are interested please contact Jennifer Lynch: jennifer@standishgroup.com



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Subject Matter

Optimizing Scope
 

About the Author:

Author

Jim Johnson

Jim Johnson is the founder and chairman of The Standish Group. He has been professionally involved in the computer industry for over 40 years and has a long list of published books, papers, articles and speeches. He has a combination of technical, marketing, and research achievements focused on mission-critical applications and technology. He is best known for his research on project performance and early recognizing technology trends. Jim is a pioneer of modern research techniques and continues to advance in the research industry through case-based analytical technology.

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