10 years ago, I ran a workshop on Project Benefits Management for a group of central government Project Sponsors. Our guest speaker was Steve Jenner and his book “Realising benefits from Government ICT investment – a fool’s errand” was one of the handouts. I read it from cover to cover and spent some time exploring the research of Bent Flyvberg (Said Business School). Flyvberg has published lots of papers describing the reasons for benefit-erosion, cost over-spends and time over-runs in major projects. More recently, he and Alexander Budzier have published insights emerging from the data from around 11000 projects.
You can find a presentation here. (PDF)
My readers will know I’m constantly asking for data and evidence (it stems from my background in the world of Continuous Improvement) and keen to understand the wider system within which success or failure happens. So, the 11000 projects research ticks lots of my boxes.
- Only 48% of the projects were on-budget (or better)
- Just 8% were on-budget and on-time (or better)
- 0.5% were on-budget, on-time and on-benefits (or better)
The track record is pretty hopeless! The data suggests the problem lies with systematic bias, not with errors in forecasting. It’s a combination of optimism bias (people are less likely to believe there will be a negative event) and political bias (pressure to deliver to an unrealistic target or to cover-up and ignore problems).
The government’s guidance (Green Book) on optimism bias says:
Project appraisers have the tendency to be over-optimistic. Explicit adjustments should, therefore, be made to the estimates of a project’s costs, benefits and duration, which should be based on data from past or similar projects, and adjusted for the unique characteristics of the project in hand.
Both Flyvberg and the Green Book are saying that data from past projects should be used to de-bias future project estimates. Look for comparator or reference projects and learn from them. I’ve written before about why I worry when programme and project directors say their project is “unique”. To me, it’s an indicator of an inward focus, when an external focus would actually be more useful, especially for preparing estimates.
The answer to improving project estimates is, undoubtedly, in the data from past projects. I suspect, though, that few project people are collecting the right data to be able to get these insights. They are doomed to repeat the mistakes of the past – “If you always do what you always did, you’ll always get what you always got” (Joseph Juran – quality guru). 
You can find a range of great papers by Flyvberg and Budzier here.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Simply, improvement... 
Discussion
Comments are closed.