Predicting project risks improves success
Avoiding the causes of project failure.
For all but the simplest of projects, success means avoiding many separate causes of failure.
Industry performance in executing complex projects continues to be a challenge and, overall, disappointing. Despite the many advances in project management, development techniques and the growing body of program management knowledge, the overall rate of successful, challenged and outright project failures has not changed appreciably over the past 15 years.
However, the cost of failure has gone up.
EY’s analysis shows that approximately US$682b is wasted on underperforming projects across the globe annually.
The significant wasted amount of project costs, unrealized benefits and team “burnout” is unfortunate and unnecessary. Since most projects are being done to meet the strategic objectives of the organization, this failure in unlocking the full potential of an organization’s program investment is a crucial factor in reducing market competitiveness.
It is important to examine the impact of project success beyond just the focus of projects costs and schedules to meet the minimum “go-live” acceptance criteria and short-term benefits.
Project success needs to be viewed in a broader perspective; to understand the degree that project (or larger program) success plays in the success of the business and in the confidence of the organization’s customers. There is also a need to understand how the project’s success will impact teams and how it will affect the organization’s preparations for the future.
Based on EY’s experience of reviewing hundreds of projects across varied industries, we have found consistent themes that result in poor performance:
- Companies are not adapting the individual project’s approach, governance, controls, processes and tools to account for the complexity of the project
- Symptoms of project issues are being treated instead of determining the root causes
- Projects do not take residual risks, predictive risks and discrete risks into account, thereby skewing the overall project risk picture
- Organizations assume that larger, more complex projects can be run in a similar way to the smaller, less complex projects that have been successful in the past.
Avoiding these causes of failure is the key to unlocking the value of your program investments.
For more details, please see our full report, Predicting project risks improves success.