The PM Paradox: Companies want project management, even though it often fails!
I was reminded of an article in the Economist about project management and the most interesting thing about the article aside from the content, was the title: “Overdue and over budget, over and over again: Companies are increasingly keen on projects. Why, when so many fail?” The subtitle which I underlined, is what’s most intriguing since it discusses a revealing and ironic paradox in that companies are aware of the importance of project management, despite the fact that it often fails!
One of the most famous was the Chaos report by the Standish Group published in the mid-nineties. A more recent report published in October 2012 through a joint effort by McKinsey and Oxford University seem to show that not much has changed:
As IT systems become an important competitive element in many industries, technology projects are getting larger, touching more parts of the organization, and posing a risk to the company if something goes wrong. Unfortunately, things often do go wrong. Our research, conducted in collaboration with the University of Oxford, suggests that half of all large IT projects—defined as those with initial price tags exceeding $15 million—massively blow their budgets. On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted. Software projects run the highest risk of cost and schedule overruns (Exhibit 1).
These findings—consistent across industries—emerged from research recently conducted on more than 5,400 IT projects2 by McKinsey and the BT Centre for Major Programme Management at the University of Oxford. After comparing budgets, schedules, and predicted performance benefits with the actual costs and results, we found that these IT projects, in total, had a cost overrun of $66 billion, more than the GDP of Luxembourg. We also found that the longer a project is scheduled to last, the more likely it is that it will run over time and budget, with every additional year spent on the project increasing cost overruns by 15 percent.
So what’s the solution to this sorry state of affairs? Keep practicing better project management, duh! But in addition I think (like I’ve attempted to do on this site) is to discuss not just which process, method, framework or body of knowledge is best (which has been done to death already), but to start questioning why we do the practices that we do and come up with some new and innovative, if not just interesting fresh perspectives. This includes stepping back and being a bit more philosophical.
One well know academic in the field seems to do just that and was the person who got me to recall the Economist article. His name is Dr. Jonathan Whitty and is a professor of project management at the University of Queensland in Australia. He writes on topics such as the existential and Darwinian evolutionary intersection of project management and other interesting interdisciplinary perspectives that jive with my thinking!
Here’s a great video introduction to him with the rather appropriate title of “The Peacock and the Project Manager”: