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Articles
8 Reasons Behind the Failure of Million Dollar Projects
According to PMI.org, for every $ 1 Billion invested in the USA, over $ 122 million gets wasted because of poor project management. Project failure is evident in almost every sector and business setup. A classic example of business failure is the Denver International Airport Automated Baggage System. The Denver airport is the largest in terms of area and 6th in terms of total customers it supports. Denver Airport, with the BAE system, desired to upgrade the time-consuming luggage check-in and transfer system. While there were several reasons behind the failure of the project, leading to a $2 billion loss, the major reason behind the failure included management taking unnecessary risks and the airline not being included in the planning process.
Standish Group, an independent international IT research advisory firm, mentions in the CHAOS Manifesto that few than a third of the million-dollar projects were completed within the given time and budget. This brings up the question, “Why do so many projects fail?”. Projects are generally led by professionals with ample work experience and a team to back them up. What is the reason why Professionals around the globe so often fails to deliver what they are believed to be expert at? Reasons behind the failure of projects have been a hotbed of discussion between experts and today Certification Planner presents the top reasons behind the failure of Million Dollars Projects.
1. Missing out on the Customization Options
Almost every software developed or process designed needs to be customized at times to deliver the best result. Project managers and stakeholders often pay a lot of attention to the base system but miss out on the finer customizations that play a major role during the use. Identifying halfway through the project that the major assumptions made with respect to the use of the end product or system are not accurate can be problematic. Identifying all the variations required during the working of the end product or system should be done before the procurement and development process.
2. Understanding the End Product and their Actual Use
The false sense of perspective is the number one reason behind project failure. It is a simple deduction that incorrect understanding of the end product will always result in falling short of the expected result. If we follow the general psychology, the project team considers the system or software that they are delivering as the end product and completely misses the point that whatever they are delivering is means to achieve a certain business objective. This also leads us to the next major reason for the failure of projects.
3. Missing out on End-User’s Needs
It is actually hilarious how often the end users are kept out of the loop during the length of the project. This creates a huge gap between what the end user desires and what is delivered. We need to take in consideration that perfect requirement statements do not exist. Very often the requirement statements need to be altered during the course of action to deliver the best result. However, this change can be realized only id the end user is an active part of the project.
While it is important to pay attention to the end user’s demands, it is even more important to be aware of their needs and what would better satisfy the objective.
4. Missing out on the Updated Requirements
The requirements keep evolving as the project progresses. A continuous improvement plan should be well placed in the project to keep tracking these refurbished requirements. The updated requirement can come from the client or the understanding of business needs and should be kept under consideration.
5. Focusing on Technical Details rather than Business Value
An interesting insight into the reasons behind the failure of projects came when we started investigating the effects of considering a project as an IT project. Dominant majorly in the IT sector, cataloging a project has effects in almost every sector. When a project is marked as an IT project (or given a name with context to the sector or end result), the vision for the project gets constrained to delivering an effective IT solution without considering the ripple effects on the rest of the business.
Projects should be aligned with business strategies, and the end result should provide key business benefits. Centering the project around an IT solution might deviate it from reaching the optimized business solution.
6. Unclear Accountability for the Measured Result
A baseline for the result provides a black and white idea of how successful the project is. It is important to establish the benefits and criteria against which success can be evaluated. While it might be challenging to design a baseline for every iterative level in a project, not having them may result in too much investment of time, effort and finance before you realize that you need to step back and do the task again.
It's common for large projects to have software measurement programs to capture productivity and historical data. This can be used as a standard for comparison against other projects. Lack of quality standard checks can easily be a major reason for failure for million-dollar projects that have several sub-levels designed as independent projects.
7. Presence of Inexperienced Project Managers or lack of Tools and Techniques for Effective Project Management
Around 56% of project managers are certified, even in huge enterprises like IBM. While certifications in project management is not a must, certifications update the professionals with the latest industry developments and provide knowledge of tools and technologies to effectively manage a project. A gap in knowledge and missing out on the latest tools and technologies is another huge reason for the failure of projects.
8. Little Communication at every Level of Management
A classic example of disaster caused because of lack of communication is the Challenger Space Shuttle that exploded 73seconds after the launch. The cause of the accident was the faulty design of the O-ring. NASA not only discovered technical error but human error as well. The engineers were concerned about the performance of the O-ring, but their concerns got lost between the line of communication and never reached the higher official. A proper line of communication is essential for any project.
So here you are with the factors that can result in the failure of the projects. With the various threats, you would be in a better position to prepare for these threats in your next project. The solution to a lot of the threats mentioned above can either come with experience or by structured skill enhancement in the project management spectrum. While experience comes with time, you can take measures to enhance your skillsets. Taking up project management certifications is an easy way to acquire new skill sets. We have a Project management Institute that continuously keeps track of the new developments in the project management spectrum and inducts these developments through various certifications. These certifications not only give you an opportunity to pick up new skill sets but validates your experience in the project management spectrum.
Give your career the boost it requires with Certification Planner’s project management certification. We are committed to connecting you to the best training solutions. All our training sessions are led by certified instructors with 15+ years of experience and include courseware designed by industry experts. Certification options that you have with us are:
1. Project Management Professional (PMP)
2. Certified Associate in Project Management (CAPM)
3. PMI – Agile Certified Practitioner (PMI-ACP)
4. Program Management Professional (PgMP)
5. PMI – Risk Management Professional (PMI-RMP)
That is not all, with our project management courses, you get complimentary access to practice tests, chapter-end quizzes, standard books, and a 100% pass guarantee.
Interested? You can contact visit us at www.certificationplanner.com or email us at support@certificationplanner.com. If you need assistance with planning your next certification, you can connect to our Training Champions at +1 8553221201. Happy Learning!