Go Talk To Your Stakeholders

This content is syndicated from LeadingAnswers: Leadership and Agile Project Management Blog by Mike Griffiths. To view the original post in full, click here.

P4As a PM, what is
the most effective thing you can do for your project in the next hour? (After
finishing this article, of course!) I would suggest speaking to your project
team members and business representatives about where their concerns lie and
what they believe the biggest risks for the project are. The reason being that
while tarting up a WBS or re-leveling a project plan might be familiar and
comfortable (where you are a master of your own domain), it really amounts to
nothing if your project is heading for trouble. Like rearranging deck chairs
when you should be looking for icebergs, there are better uses of your time.

The frequency and
magnitude of IT project failures are so prevalent and epic that people can
appear in denial of their ability to influence, or “in acceptance” that a
certain percentage of projects just go south. Does it need to be that way? If
we spent more time asking people where stuff could go wrong rather than making
ever more polished models of flawed project plans, could we change the
statistics (even a little bit)?

According to
research by Roger Sessions of ObjectWatch, 66 percent of projects are
classified as “at risk” of failure or severe shortcomings. Of these 66 percent,
between 50 and 80 percent of these projects will fail. So, if 66 percent of
projects are at risk, let’s say 65 percent of these projects will fail; that’s
.66 x .66, meaning 43 percent of projects fail. (Despite the grim projection,
these numbers are actually slightly better than the Standish Chaos report findings).
What would happen if we could prevent just, say, 5 percent of those from

The impacts would
be huge, because the amount of money spent on IT projects now is truly
monumental. Of all these failing projects, there must be many that flirt on the
edge of success versus failure--wobbling between being able to be saved and
past the point of no return. These are my targets--not the
doomed-from-the-start death marches to oblivion but the appropriately staffed,
well-intentioned projects that just don’t quite make it. I bet there was a
point in the path to failure when some more dialogue around risks and issues
could have provided the opportunity to take corrective action.

The trouble is
that we don’t know if we are on an ultimately successful or unsuccessful
project until its path may be irreversible. So we need to be acting as if we
could be heading for trouble at regular intervals. We should also examine the
economics behind this suggestion to change PM behavior. How much is it really
worth to maybe sway the outcome of just 5 percent of the projects that are
headed to failure?

According to The
New York Times
, industrialized countries spend 6.4 percent of the GDP on IT
projects. Of that, 57 percent typically goes to hardware and communication
costs and 43 percent to software development. Of these, 66 percent are classed
as “at risk” and 65 percent of them ultimately fail. The cost of failed
projects is two-fold: There is the direct project cost, but also a series of
related indirect costs. These include the cost of replacing the failed system,
the disruption costs to the business, lost revenue due to the failed system,
the disruption costs to the business, lost opportunity costs, lost market share
and so on.

An investigation
into a failed Internal Revenue System project showed a 9.6:1 ration of indirect
costs to direct project costs. For our purposes, we will use a more modest
ratio of 7.5:1. Let’s see how these figure pan out:

IT Failure Costs

So it turns out
that the failing SW projects cost the world about $6 trillion dollars annually,
and over $1.3 trillion in the United States alone. That’s a chunk of change,
and saving just the 5 percent of projects wobbling on the edge of failure in
the States would amount to $1,336B x 0.05 = $66.8B (or $1.28B per week).

How do we do it?
Well, socializing the problem is a start. Let’s talk about project risks more
often and raise them from the clinical world of reviews and audits up to the
more human, approachable world of predictions and wagers. Ask team members to
predict why the project may fail or get stuck. Ask our sponsors where they
think the biggest obstacles lie. Follow up with “How do we avoid that?” and
“What would have to happen to prevent that?” type questions, and follow through
on the recommendations.

Just the act of discussing these issues can influence
behavior. Armed with knowledge of where the really large icebergs are, people
tend to steer and behave differently. To reiterate, we are not trying to
prevent all project failures; just keep an extra 5 percent on track
through frequent, honest dialog about the issues and a broader stakeholder
awareness of the major project risks is a great way to start. So what are you
waiting for?

(I wrote this article first for Gantthead, here )


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