Crunching numbers is like building a relationship, in that you only get out what you put into it. In calculating the cost of poor project management, you will quickly find many numbers that darken your day, but in understanding how much there is to lose, you will also get a better idea of how much there is to gain. Amanda Owens writes in a blog about all the numbers that play into inefficient project management. According to PricewaterhouseCoopers, in a study of 10,640 projects from over 300 companies across 30 countries, only 2.5% of companies completed 100% of their projects. When the Harvard Business Review took a look at project management trends in the IT industry across nearly 1500 projects, they discovered that 1 in 6 projects had a cost overrun of 200% and a schedule overrun of nearly 70%. Owens says that the estimated rate of IT project failure falls between 5-15%, with total labor cost losses between $50-150 billion in the United States. She adds:
And beyond dollars, poor project execution impacts many parties. An unsuccessful project can break trust with customers. Lose that trust, and you might as well hope for the best on future business with that customer. Trust is also lost internally when a project fails. Members of project teams begin pointing fingers, creating animosity, losing respect for one another, and building grudges against stakeholders or project managers. Failed projects break morale, and create disruptions in future projects before they start.
She finds that poor planning and poor communication are the most frequent culprits of failed projects, and she admits herself to having sometimes engaged in some poor planning in a rush to get contracts signed and projects green-lit. Fighting that temptation and making sure the details are hammered out in advance are how you give your projects the best chance of success. Put your best foot forward from the start if you want to have a happy relationship with all the numbers in your life.