Everyone’s heard the statistics about project failure. Depending on who you listen to it is a gloomy 50 to 80% failure rate. Do you really have this many failed projects? Or are you just better than everyone else?
The problem with project failure is that most companies don't have a clear definition of what that means. For example, if your project was budgeted to cost $100,000 but you came in at $103,000 was your project a failure? Probably not … A good rule of thumb to use is +/- 10% variance against a budget should be consider successful.
Schedule is no different – if you miss your target by less than 10% I would consider it wildly successful.
There are several warning signs that indicate your project may be going off track such as slow but steady deviation in the budget or schedule.
How to determine if your project is in trouble
Want to know if your project is really in trouble? Look at some of the KPIs below:
- Project trending 30% or more vs estimated financial budget;
- Project trending 30% or move vs estimated time estimate;
- Project appears to be on track – however, you must postpone one or more major deliverable;
- Project appears to be on track – but quality of the work has suffered to the point you are concerned with long term integrity;
- Customers are not pleased with the performance of the project team;
- The relationship between the client and the project team is dysfunctional.
Each organizations definition for a troubled or failed project may be different – but the point that is being made here – you need to decide if the project is just experiencing a bumpy patch or if this is a serious problem that could cause the project to fail.
Turning around a troubled project
Bringing in an outside party may be the only option if the problems are too large for the project manager. He may not realize the size of the project or might not be able to handle it.
Some potential outcomes of a troubled project:
- Able to turn it around and complete successfully. Yes, we love this option too but normally doesn't happen with a project that has gone off the rails so far. It will likely cost you more, take more time and may have less functionality than you originally anticipated.
- Create new success criteria and execute according to the new plan. This is one of the more common outputs.
- Create new success criteria and execute – and mess it up again. This happens too …
- Project is terminated. Don't through good money after bad.