The Tremendous Cost of Projects That Take Too Long

The cost of interruptions and destructions is far more than just a productivity issue.

As part of our webinar 3 Crucial Steps to Finishing Projects Faster, we have the participants complete a survey on What Happens When Projects Take Too Long. The emotional energy spent in frustration and analyzing how they could do things better, costs organizations far more than just $30,000 per employee per year. The longer it takes to finish a project beyond its due date, the less likely it is the project will ever be completed.

According to McKinsey — a company who studies effective project performance found that "excelling at core project management practices, such as short delivery cycles and rigorous quality checks" significantly improves project performance.

McKinsey says, "On average, large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted. Software projects run the highest risk of cost and schedule overruns." Companies are betting the farm on projects when they don’t have qualified project managers and effective project management processes. They can even end up going bankrupt because of poor project management.

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McKinsey goes on to explain 4 groups of issues that cause most project failures. Here we highlight the group Excelling at core project-management practices:

"To achieve effective project management, there’s no substitute for tested practices. These include having a strategic and disciplined project-management office and establishing rigorous processes for managing requirements engineering and change requests. The project office should establish a few strong stage gates to ensure high-quality end products. At the same time, it needs to strive for a short delivery life cycle to avoid creating waste in the development process.

One public-sector organization established strong project control by defining an initiative’s scope in an initial six-month phase and making sure all stakeholders signed off on the plan. Beyond this phase, the organization’s board had to approve all change requests, and the project was given a pre-defined cost-overrun buffer of less than $2 million. Another organization, a high-tech company, established clear quality criteria for a project master plan, which mandated that teams break down all activities so that they required fewer than 20 person-days to complete and took no longer than four weeks.

In yet another case, instead of following a ‘waterfall.’⁴ 4.The waterfall model is a sequential software-development process in which progress is seen as flowing steadily downward — like a waterfall — through the phases of conception, initiation, analysis, design, construction, testing, and maintenance. or linear approach, a company created integrated business and IT teams that worked on an end-to-end basis in their respective work streams. In other words, the teams participated from the beginning of the project to its completion—from defining requirements to testing. This approach helps to avoid misunderstandings during stage transitions and ensures clear responsibility and ownership. It also promotes efficiency gains and fast delivery."

So What Happens When Projects Take Too Long is of such significant importance — every business owner, executive, and project manager needs to make it Job One to remove the roadblocks that impact the ability to finish projects.

Resources and Notes
McKinsey.com. "Delivering large-scale IT projects on time, on budget, and on value." By By Michael Bloch, Sven Blumberg, and Jürgen Laartz. October 1, 2012. https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/delivering-large-scale-it-projects-on-time-on-budget-and-on-value#

WEBINAR: Register for Cheetah’s webinar – 3 Crucial Steps to Finishing Projects Faster. https://cheetahlearning.easywebinar.live/registration-9

This hour-long Master Class helps you:
1. Start your projects in a way that ensures you will finish, fast.
2. Prevent the most common problems that derail projects.
3. Avoid the embarrassment and humiliation of a project that takes too long.
4. Inspire people to move heaven and earth to help you finish your projects fast.
5. Go after better opportunities.
6. Get promoted at work or find a better paying, more fulfilling job.
7. If you run your own business, you’ll be able to launch new products faster and test out more marketing ideas quicker.
8. Get along better with people who help you do your projects.