Project Failure or Portfolio Failure?

Successful projects are hard to achieve. That was true when The Standish Group, West Yarmouth, Mass., a research firm focused on project management first published their findings in 1994 and is true in their 2009 report. Project management organizations and certifications have been in place longer than these studies and have not been able to break the simple truth that projects are challenged or fail more often than they succeed. As a matter of fact the 2009 news is worse than last year. This news isn’t about project failure, it is about an organizations ability to select projects that will succeed.

"This year's results show a marked decrease in project success rates, with 32% of all projects succeeding which are delivered on time, on budget, with required features and functions" says Jim Johnson, chairman of The Standish Group, "44% were challenged which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used."1

Project managers and their organizations continue to work to move toward more project successes, fewer challenged project deliveries and an overall reduction in project failures. We have evolved from project management to program management to portfolio management. We have discussed a traditional approach to projects (waterfall), an iterative approach, agile and lean. We’ve employed Six Sigma, TQM, CMMI and other process and quality tools to increase quality of delivery. We are diligently working to solve the problem of project success.

We compare IT delivery to building bridges, building homes and other visible, tangible projects and hope to find answers. We won’t find the answer to successful IT project delivery through those comparisons until we find the answer to a couple of fundamental question. We first have to answer the question of accountability. Is the project manager accountable from inception of an idea to delivery of the idea’s solution? When we answer that question we then need to determine the project boundaries. When do we start measuring a project to determine whether or not it succeeds or fails? Again, if we look at a project from the inception of an idea to the delivery of the idea’s solution then we will be looking at a much larger number of project failures (cancelled projects).

It isn’t a surprise that the numbers of projects that are challenged or have failed have increased. In today’s economic climate the number of cancelled projects has increased and there are fewer resources to do the same amount of work which will cause projects to be challenged. In reviewing this information it becomes clear that there is a gap between measuring project success and measuring project management success. The project manager must be held accountable for the results of project success, failure or challenge and project management methodologies, techniques and tools must provide the guidance needed for successful delivery. The simple truth is that organizations must include portfolio and program management to create an environment for successful project delivery. Organizations cannot have successful projects if they are not set up for success before a project manager is assigned. The project manager builds software. Organizations must plan what is to be built based on organizational strategy through a portfolio view. The Standish Group study reveals more about portfolio management than project management.

Ride On, Manage On
The Standish Group. 21 April 2009. http://www1.standishgroup.com/newsroom/chaos_2009.php