Overdue and over budget, over and over again

“Overdue and over budget, over and over again” pulled from The Economist.  http://www.economist.com/node/4065653

Overview: This article outlines the challenges projects and project managers’ face in keeping projects within the designated time frame and within the budget.  More importantly, it states that over 180 years of project management, very little has changed.  In the past, projects were routinely over budget and took longer than anticipated.  Even today with technological advances, including the various project management software, projects continue to run over budget and require time extensions.  Within the article, current projects are highlighted, such as the oil pipeline from Azerbaijan’s Caspian wells to the Turkish Mediterranean port of Ceyhan, which is running several months behind schedule and is currently 5-10% over its four billion dollar budget.  As most of us would probably expect, The Economist points out that many of the current large-scale projects are IT focused.  Even with increased technology and technological support, these projects are just as likely to cost more money and require more time that planned.  This includes the process of moving patient records to electronic health record systems in the healthcare sector; which is a process many hospitals and clinics are currently undergoing.

There are astounding statistics included in the article: on average, recent large-scale IT projects took 84% more time than expected and costs tended to be 59% above the original budget.  Additionally, projects are cited as experiencing the most challenges when the initiation phase gets separated from execution, such as when project managers make unrealistically optimistic budgets.  However, the Project Management Institute has found that more companies are now employing designated project managers, which will hopefully improve project outcomes in meeting budgets and timeframes.

Personal reaction:  Overall, I was not surprised by what I read in this article.  I think it is common for projects to be proposed with budgets and timeframes that are unrealistic in an attempt to secure a contract or impress management. Unfortunately, this sets the projects up for failure and furthers the precedent that projects will not meet the initial proposal.  In my current position, we use Excel project planners to develop timeframes and monitor project progress.  I do find this helpful in keeping my peers and clients updated, but it does add another layer of work, which can be time consuming.  However, my current position involves many ongoing client projects at a time, therefore, Excel is a necessity in keeping myself organized and on top of their statuses.  When I reflect on this, I think having designated project managers could be very beneficial in large organizations where there are many projects to juggle.  In smaller organizations, such as my current employer, I do not believe it would be necessary or would result in improved project outcomes.

Peer questions: Are you surprised to hear that project management has not improved, resulting in projects that continue to come in over budget and exceed the timeframe?   Do you believe that designated project managers within corporations will change these outcomes?  For those of you that use project management software in your work environment, do you find that is helpful?  Have you had to ask a client or your manager for a project extension?  If so, how did you handle it and how did they react?  Lastly, do you have designated project managers in your organization?  If so, how do they interact with the various team members and clients?

7 thoughts on “Overdue and over budget, over and over again

  1. Caitlin, thank you for sharing this great article. I found this article very interesting because I disagree with almost everything that this article talks about. The reason I disagree is because few days ago I conducted an interview with our IT Director who manages many, many projects. She had nothing but great comments about how technology has made managing projects so much easier. She said projects are delivered way faster now, under budget, and with better accuracy. She also said that with the new platform in place she has more flexibility now to implement unexpected changes to each project and deliver the project on time. The projects she manages are not billion dollars projects, but she had nothing but a positive feedback about how managing projects has improved thanks to technology.

    I am very surprised to hear that project management has not improved and I don’t agree with that statement. In my organization we have designated project managers and they do add value. I can see in my current organization that project managers really get things done. They communicate well, they hold their team accountable, and deliver on time. I see these project managers doing whatever it takes to deliver, they are very motivated.

    I agree with you Caitlin, having designated project managers is beneficial in large organizations, smaller organizations no so much.

  2. Intriguing topic Caitlin, I agree with the article. At least in my field of manufacturing, projects still come in over budget and past due. Unfortunately the reasons why these projects exceed the promised date are out of the project manager control. In a supply chain if one supplier is late or have a defected product, this can throw the entire project off schedule. I agree that the ETA and cost of a project are sometimes fabricated to win a bid and secure the job. This is a dangerous practice since the firm’s reputation is on the line and stiff penalties apply if project is not completed upon contractual agreements. Having designated project managers in a firm should reduce the occurrences of completing project late and running over budget.

  3. Great article, thank you for sharing. I am very surprised with the statement that the project management has not improved over the years. On the other hand, as I start to think about this more and more, project management is “evolving” (exploring new grounds where it utilizes new project management tools). In IT, projects usually go over budget because there aren’t that many identical projects where the PM can easily estimate the budget and timeframe of the project. I think that project process has improved over time only if the project is identical to the old one. With new technology and challenges that we face, each project is different and there are many unknowns that make us think project management has not improved at all.

  4. Great article Caitlin! I’m also not too surprised by the findings in the article. Although we are technologically advancing most likely daily, there will always be ambitious goals and timelines to impress management and secure contracts. Our IT department uses various management software programs (unfamiliar to me) but generally we do not utilize a specific program company wide. I haven’t had to ask a manager for an extension on a project, but have been part of projects where we needed an extension and the project’s duration lasted well over the original due date. By that time, the whole team was completely burned out and unmotivated. We don’t have any formal project managers within our organization, as there isn’t a need for such roles given our industry and business model.

  5. Nice article selection, Caitlin. The statistics on IT projects that run over budget and behind schedule aren’t surprising to me. I’ve found the initial user requirements to be the most challenging aspect of IT projects. It is a time consuming process that typically involves a representative of the business sitting with the IT project manager and describing the envisioned use of the software. Getting the specifications right the first time can be very elusive. Often, trying to get the software to handle the 10% of atypical business uses causes the problems. Strong project support from the business and having an astute, experienced IT project manager is often necessary for any moderately complex project to have a chance at successful implementation on time, on budget, and according to the customer specifications.

  6. Very surprising Caitlin! I am amazed that with the advent of so many project management tools we have not gotten better at staying on target and within budget. I am a Six Sigma Green Belt and a large portion of my training is on how best tot use tools to keep on track and measurable KPIs to let out warning signs and identify risk early. Unfortunately, I feel a lot of this is attributable to the project manager and the team themselves. If they are not properly managing their project and achieving deliverables in reasonable amounts of time and effort then throwing tools at this problem is not going to help. The discipline must be there. And often, things just happen. We cannot foresee everything so building in float for additional time and money is important. Thanks for sharing!

  7. It’s funny, with all these technological advances we often think ourselves invincible. This article was a good reminder that time and budget are still the problem they were pre-tech, if not larger due to higher costs and pressures. I agree with you Caitlin that the organizing element of project management can be so time consuming! It is necessary, but sometimes seems to delay progress in other areas. Not every project needs a project manager. I would however challenge the assumption that going over time or budget equates project failure. There is rarely a business executive that recognizes that budgets are flexible and timelines are dependent on several changeable factors. While sticking close to the constraints is important, they are more common than not bypassed due to uncontrollable factors.

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