Project Management Disasters
Studies have shown that have indicated that that 68% of IT
projects fail.
Gathering examples of IT project failures may not a very hard task.
What is hard is to get a fair assessment of the issues and determine the extent
of the failure. What is even harder is to get all the stakeholders to agree the
cause of the failures and where the responsibilities lie.
Organizations are known to have high expectations of Project
managers. Project Managers are considered
to be bright, very experienced, motivated and knowledgeable in the subject area.
At initiation, a project is deemed strategic and most often the best of the resources
are generally pulled into the project. And frequently if we look at the
statistics - projects fail, thereby demonstrating that the best of the ingredients
do not make broth that is good enough!
Evidence that IT project failure is not just occasional is best
indicated with projects that involve "public money". When the budget
is higher and funding and management is completely from "public money",
it is more likely that project facts will be published.
US state DMVs (Department of Motor Vehicles) seem to have a quite
a few projects that may serve as classic examples.
In 1987, the
California Department of Motor Vehicles (DMV) launched a major project to
revitalize their driver’s license and registration application process. By 1993,
after $45 million dollars had already been spent, the project was cancelled.
There really were no lessons learned
from failed projects that were similar in scope and strategy. The same year,
“in 1993, the Oregon Department
of Motor Vehicles embarked on what was to be a five-year, $50
million project to automate its mostly manual and paper-based operation. The
project was justified on the ground that this automation would enable the DMV
to downsize its workforce by one-fifth and save over $7.5 million
annually. Two years later, the five-year project's completion date crept
to 2001 (60 % slippage), and the estimated total budget ballooned to $123
million (146 % slippage). Finally, in 1996, a prototype was rolled out, but,
according to one consultant brought in to examine the project, the system was
fired up on a Monday, and by midweek the DMV test office had no longer lines
than ever backed up around the block. The new system was a total failure. Soon
after, in response to public outcry, state officials killed the project.
In the aftermath, the only serious downsizing was of the DMV officials who
oversaw this disaster.”
In March 1997
the state of Washington killed the biggest IT project in its history, the
License Application Mitigation Project (LAMP). The project was aimed at automating the
state's vehicle registration and license renewal processes. The project began
in 1990 and was supposed to be online in 1995. It planned to create a
relational, client-server system using IBM's MVS/CICS architecture. Initially
budgeted at $ 16 M, the project cost climbed to $ 41.8 M in 1992, $51 M in 1993
and was last estimated in March 1997 at $67.5 M of which $40 M had been spent
without result. In 1993, LAMP faded when it became clear that it was doomed to
be a colossal money-waster. Even if the plug had not been pulled, it would have
been much too big and the stakeholders finally realized that it would be obsolete
by the time it was finished. LAMP was turned off in 1997, after legislators
calculated that the project ultimately would cost $4.2 million more annually to
run than the state's $800,000 per year incumbent system.
“Three DMV projects in CA, OR, WA were very similar. There exist
much bigger and more complex IT applications than driver licenses and
registrations management. But those three projects together squandered more
than $ 100 million of public money.”
Project
Management failures are not isolated to public projects. The initial cost estimated for the Paris Euro
Disney project was $2.25 billion. The final cost was almost twice as much.
Failures are
not determined by projects taking longer to complete, or going over budget. In
February 1988, hardware problems caused the Bank of America to lose control of
several billion dollars of trust accounts. All the money was eventually found
in the system but the depositors withdrew their trust money.
If it offers any
consolation, wasteful spending and extravagance is not specific to American
organizations.” In early 1993, the London Stock Exchange abandoned the
development of its Taurus paperless share settlement system after more than 10
years development effort was wasted. The Taurus project cost the City of London
over £800 million. Its original budget was slightly above £6 million. Taurus
was 11 years late and 13,200 percent (yes, 132 times) over budget without any
viable solution in sight.”
In the case of the computer-aided dispatch system for
the London Ambulance Service developed between 1987 and 1993, the issue was rather
the usability of the system. The system was inoperable and the automatic
back-up system. A decision is made to revert to purely manual methods. Some
lives could have been saved if ambulances had been dispatched.
It is very important for PMs to constantly monitor projects and
gauge the business value. It may be necessary to abandon the project, though
very few PMs really seem to do that.
Ultimately a good Project Manager is a person with experience and sound
judgment, who knows to apply the right principles. A Project Manager knows the
answer to project success does not lie in a book or applying any specific
doctrine or methodology. A project
manager’s success essentially depends on sound technical knowledge and domain
knowledge, strong work ethics, good communication skills that will draw not
just confidence but respect from everybody he or she works with.
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