Ailing projects. We have probably all experienced it: a project that was started full of enthusiasm runs out of steam. The budget is insufficient, goals are not achieved and, to make matters worse, the parties involved in the project are irreconcilable.
It is particularly annoying when strategic projects or projects that cannot be abandoned, for example to meet legal requirements with fixed deadlines, threaten to fail. Then things can get really expensive.
But what should you do if problems start to pile up and the project threatens to develop negatively and become a “non-performing project”?
What is a non-performing project?
A “non-performing project” is a project that is significantly outside the planned values and thus threatens to fall well short of the key objectives, namely budget, time frame and desired quality.
According to various statistics, this applies to around 45 percent of all projects. Approximately two thirds of these projects could be restructured by the companies and one third were actually canceled.
Typical causes of problems in non-performing projects
Despite numerous methodical approaches and employee training, many projects become non-performing. The reasons for this are that one or more of the project objectives – costs, deadlines or quality – have not been achieved or are foreseeably no longer achievable. The problems are very complex and to a large extent have nothing to do with the methodology used. These problems can be roughly divided into three categories.
- Technical errors – in the application of the methodology with regard to requirements, lack of risk assessments, under-budgeting and incorrect planning.
- Communication problems – different understanding of the objective, the way in which this objective is to be achieved and often also the significance of a project for the company.
- Collaboration problems – the coordination between the parties involved does not work and is not synchronized.
Here are some examples of classic problems:
- No uniform procedure despite the same methodological approaches
- No central control of programs and projects
- Requirements are not implemented or are not clear
- escalating costs
- failure to meet deadlines
- Additional risks in procurement and delivery
- Political obstacles due to changed situations
- Resource overload
Of course, the list can be extended at will.
The challenge of non-performing projects
The challenge for the company is to find a way out of this situation as quickly as possible. The following points need to be analyzed in detail:
- What problems are there in the projects and what are the causes? Are there any politically or personally motivated obstacles?
- How can I bring about initial improvements promptly?
- What do I need to do to implement a permanent solution?
- What does it cost me and are the costs still in relation to the desired result?
- Can I solve the problem(s) with my own resources or do I need experienced experts?
What to do?
It is almost a truism that once a project has reached a deadlock, an external consultant is best placed to cut the Gordian knot. Why is that the case? Well, there are a few reasons. Firstly, an external consultant is not tied into the company’s network of relationships, which means that, unlike an employee, he or she does not have to worry about being sanctioned at work in the future. Conversely, the advantage for the project lies in being able to carry out an objective investigation without having to take the wrong people or groups of people into consideration.
In addition to his professional expertise, the external consultant also acts as an arbitrator and mediator between the project participants.
An external project rescuer does not usually do this for the first time, the art lies in the methods and experience gained from similar projects. Over the years, ADVASO has developed “blueprints” that can be quickly adapted to the individual situation.
What does this mean in concrete terms with regard to the measures?
At the beginning there is a quick check. A quick check begins with a meeting to determine how the project situation is viewed by several stakeholders. The result is the sum of the subjective impressions of the current status of the project. This provides important input for the next steps to save the project.
The project situation then needs to be analyzed in detail and the points already mentioned in the challenge section need to be addressed, taking into account the individual situation in the project. A project audit provides a clear picture of the factors that have led to the project’s imbalance.
Please note: The project audit can also lead to the conclusion that the project cannot be continued in its current form and must then be completely redesigned.
Once the project auditor has identified the relevant problems, the third step is to draw up a remediation plan, including a list of solutions, and discuss the shortcomings with the client and project manager. The aim here is to quickly implement the first improvement measures. Of course, this not only has a positive impact on current projects, but ideally also on future projects (“lessons learned”).
This is the transition to point four: In the fourth step, a strategic approach is necessary to ensure continuous improvement in this and other projects. One solution to this is often the implementation of a project management office (PMO) if one does not already exist. The PMO defines an approach that is tailored to the needs of the company. This is because all the proposed methods and lessons learned are based solely on providing a framework that must be adapted to the individual situation of a company. The methodological approaches are not to be regarded as “sacred cows” or as the sole saviors; each method has its strengths and weaknesses.
It is therefore important to develop a “best of” for your own company.
Want to find out more? Visit our website and take a look at our reference reports on the subject: https://advaso.com/referenzen/
Download our paper on non-performing projects or directly our offer including the free Quick-Check for non-performing projects.
Sources:
1 Only 43% of projects are completed on time and on budget, and only 29% are on schedule.
Source: Wellingtone Ltd, 2020
https://wellingtone.co.uk/wp-content/uploads/2020/06/The-State-of-Project-Management-Report-2020-Wellingtone.pdf
2. 33% of all IT projects fail due to a lack of management involvement
Source: University of Ottawa, 2008
https://ruor.uottawa.ca/server/api/core/bitstreams/e07b304b-1836-409c-9a7a-8fd3098d9637/content
3. 75% of IT leaders believe their projects are “doomed to fail” from the start
Source: Geneca, 2017
https://www.geneca.com/why-up-to-75-of-software-projects-will-fail/
4. At one out of six companies, the project budget requirement at the end of the day is more than 200% above plan
Source: Havard Business Review, 2003
5. According to the 2020 CHAOS report by the Standish Group 66% of projects fail if companies do not have an effective project management system in place.
Source: The Standish Group, 2009-2021
https://www.projectsmart.co.uk/it-project-management/the-curious-case-of-the-chaos-report-2009.php#google_vignette
