Defining Project Failure & Success

“Difficulty defining IT success is one reason that failure statistics are all over the map. For example, when I compiled CRM failure stats from various sources, for 2001 to 2009, the numbers ranged from 18 percent to 70 percent.”

“The most simplistic definition of project success and failure views looks merely at schedule and budget – projects delivered on time and within planned costs are deemed successful. However, this definition ignores value, making it a convenient, although incomplete and misleading, indicator of genuine project success.”

He goes on to cite a book written by J. Kent Crawford called, The Strategic Project Office. Krigsman notes how the author, “broadens the success criteria specifically to address alignment between project goals, business requirements, and outcomes. In other words, the book describes performance measures that link time, cost, and value to actual results.”

He then includes the list of performance measures described in the book:

  • The organization’s strategies are executed according to plan.
  • The organization’s shareholders are satisfied.
  • The organization is financially successful.
  • Projects are completed on schedule and on budget.
  • Project customers are satisfied.
  • Project resources are allocated optimally.
  • Projects are aligned to the organization’s business strategy.
  • The organization works on the right projects.

I immediately found the list provided some wonderful mechanisms to gauge project success. My very next impression was how little the list measured project management performance and how much it measured project portfolio management (PPM) performance.

My second impression provides insight into the reason for my first impression. If you are a regular reader of my blog or if you ever heard my PPM or PMO presentations, you know I believe PPM is the chief culprit in the high rate of IT project failures. I have argued for years that poor PPM dooms many projects before they ever land on a project manager’s lap. I also contend it is the heroics of our people in the trenches that keep indefensible project failure rates from being even higher.

Let’s take another look at those project performance measures to see how they are linked to PPM:

  • The organization’s strategies are executed according to plan.

One of the best determinants of project success is if they result in the outcome causing them to be chosen in the first place – fulfilling enterprise strategy. PPM does the choosing.

  • The organization’s shareholders are satisfied.

At first I thought this measure was just another characterization of the first. Sound PPM would be used to choose projects and program investments to fulfill enterprise strategy, which by definition, would satisfy shareholders. After thinking about it some more I realized this is different from the first because PPM could fulfill the strategy without necessarily satisfying shareholders. If this occurred, it would be an indication that the strategic planning process was flawed, not necessarily PPM.

  • The organization is financially successful.

You can see the recurring theme here. One could argue there is redundancy in these first three, but I like it. There are nuances to each that make them all worthy of measurement. If the organization was not financially successful it could be due to either poor strategic planning or poor PPM.

  • Projects are completed on schedule and on budget.

My first impulse was to say this was the one metric and measure a project manager could influence. But even this one could be an indication of poor PPM. If PPM throws too many straws on the camel’s back the crack you’ll hear may have nothing to do with projects being mismanaged or poorly executed. PPM doesn’t just ask and answer if a project should be done, it also asks and answers if a project can be done.

  • Project customers are satisfied.

Here is a measure that clearly falls in the purview of the project manager.

  • Project resources are allocated optimally.

This could be a measure of either poor PPM or poor project management. It depends on how much latitude and autonomy project managers are given over the allocation and assignment of resources. But once again, the question of “if a project can be done” (which includes the assertion resources can be optimally allocated) is asked and answered by PPM.

  • Projects are aligned to the organization’s business strategy.

This is the number one project selection criteria for PPM. Number One!

  • The organization works on the right projects.

This is what every other PPM project selection criteria is used to ensure. “Doing the right things” is the simplest (albeit trite and overused) characterization of PPM.

You can see why I liked these measures so much. They move the perception and focus of project success from the sometimes meaningless “on time and on budget” indicators, to the loftier and far more meaningful level-realizing enterprise strategy. And if you want your projects to succeed so you can realize your enterprise strategy, you better start with sound project investment governance. You need to start with PPM.

Steve Romero, IT Governance Evangelist

Article source: CA ITGovernance Blog

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