Success of a project depends on a lot of factors. These are, among others, people who work on it, appropriate management of the undertaking, tools used to manage tasks and a manager who coordinates the project. Obviously, we cannot forget about other very important factors such as finance, deadlines and technological facilities. Often our expectations towards the project are different than the reality which befalls us. Sometimes all goes wrong. Why is that?
Projects like to be managed
We wrote some time ago about the fact that projects need to be managed. It is even said that they “like to be managed” and there really is some truth it this saying. Statistics clearly show that the person coordinating tasks who possesses proper predispositions, knowledge and skills in managing people can greatly increase the profit which the project will bring, speed up its implementation and – most importantly – fit in the adopted budget.
The Project Management Institute (PMI) says that companies which use help of an experienced manager during implementation of projects lose 28 times less money. PMI divides organisations into two groups: those which use appropriate tools and knowledge and those which have no appropriate possibilities or experience. If we dig deeper into the analysis, the comparison is very clear. The “Champions” are companies which have the project closure rate at the level of above 80% and the “Underperformers” are the enterprises with less than 60% of closed projects.
A comparison of 2017 shows that there are big differences between those two groups. Companies which possess project management methodologies and use all possible tools complete 88% of projects on time, 90% within the set budget, and if an undertaking fails for some reason, the loss which the enterprise suffers fluctuates within 14% of the entire budget. In the case of second group, on the other hand, the statistics look as follows: only 24% of projects are finished on time, 25% within the set budget, and failure of a project brings losses of 46% of allocated funds. The differences, as we can see, are dramatic and show how vital good task management is.
What does it really look like?
46% of organisations do not notice the value of a project manager. This is why they forget about them in the process of implementation or just use knowledge of people who do not have appropriate or in-depth experience in this field. When we start to act, we expect that our project will be implemented on time, will not exceed the set budget, will not use more than the assumed quantity of resources etc. The truth is, this is exactly what happens in a lot of companies. However, many organisations encounter problems which not only influence the implementation time, but also implementation costs and which frequently threaten the entire enterprise.
What is the reality in most companies, then? Where do problems and mistakes occur? First of all, we forget that in an organisation a lot of actions take place at the same time, more than one task is being performed in different units and it is not always so that every unit knows what people are engaged in projects in other departments. It can be that the manager has to coordinate an undertaking covered by a dozen or so people from different departments. At the same time, these people are delegated to other tasks and work at several projects at the same time. Such fragmentation of tasks has a very destructive effect on the success of undertakings.
Another problem is access to the necessary data and information for each team member. Lack of tools to manage the project, even those simplest ones, can really hinder communication in the group. Unless the lower-tier employees do have to know all information connected with project implementation, the higher-tier managers or the project manager have to possess this knowledge. What is most important for the team are milestones, budget, available tools and means at their disposal. The flow of information between individual units is extremely important as well. It is also vital for the employees to have clearly defined and measurable goals. It will result in them knowing when and to whom to report completed tasks and when the deadline is. 37% of projects fail because of this exactly – lack of clear and measurable goals which could be enforced by leaders.
Constantly growing costs?
We already know that a lot of actions end up exceeding the planned budget. Liquid Planner says, that this problem occurs practically in 50% of all cases. This is caused by a lot of factors. Primarily, the biggest weakness is poor flow of information (according to 43.9% of respondents). Increase in costs during actions is also caused by incorrect evaluation of expenses on respective actions. Where do these wrong estimates come from? There may be several reasons for this. At times, we just forget about obvious expenses or we measure wrong indicators. For example: we evaluate the specialist’s work according to the rate applicable in our company and it may be much lower than the one on the market. Moreover, price of the material, necessary technology or knowledge can change. All those fluctuations can significantly influence the final cost of our implementation.
There is no ideal solution to plan a budget, but we can always control it at every stage of project life. This is not very difficult and with IC Project we can do it very effectively. All you need to do is create a report on the budget and analyze whether costs do not deviate from the assumptions. In addition, permanent expenses should also be included in it (e.g. remuneration for the team or leasing costs). In this way, we have information about the remaining available funds,which is calculated on the basis of information collected so far. Therefore, we will that e.g. in February, thanks to change of software, we managed to increase the effectiveness, thanks to which we are closer to the goal and have saved 10% of time which enabled us to save a certain amount of money.
Unfortunately, 34% of projects do not even have a well prepared foundation apart from a general outline of activity, not to mention a well-planned budget and a task plan.
What about the methodology?
How we manage a project is also vital but does not determine its implementation and successful completion. Many unique tasks were brought to an end without using any known methodology and – most importantly – this was made without exceeding the deadlines and the budget. This means that the main strength of every project are people, ideas and teamwork. Let us add control, management and clearly presented tasks to the mix: there, we have a recipe for success.
Read more about 5 days – is it possible to complete every project in this time?