15% of medium-sized tech projects (not the ones that get all the executive attention but the secondary ones that are often overlooked) exceed cost estimates by 200%?
Recently the Harvard Business Review posted an article called Why Your IT Project May Be Riskier Than You Think. They highlighted that the average project over run was 27% over cost, one in six had cost overruns of 200%, on average, and a schedule overrun of almost 70%. They suggested that companies should plan for this, and ensure they can survive a 200% overrun should it occur (one such project cost the job of EADS CEO Noël Forgeard).
This is great advice – don’t go into anything you can’t survive, but how can you improve the odds of survival?
- Break the project into two components before going to RFP (Thanks to my team lead JS for this idea, it has already garnered me two e-mails about how they wished they had done this for their recent project).
- Strong Change Management
Break the project into two components before going to RFP: When planning your project (especially if you’re hiring contractors/consultants), do a proper assessment. When you include the assessment as part of the larger project you’re going to get far less accurate proposals. Instead put out a proposal to fully assess the projects scope, duration, stakeholders and impact to all three components: people, processes and systems. This part of the assessment ties neatly into change management.
Strong Change Management: Change
management isn’t just training materials and a communication
plan. It involves helping with the original stakeholder
assessments, impact assessments, and moved into how to continuously
monitor these throughout the project. It also involves monitoring
the uptake of each stage of the full project. That being said, it
will also include communication plans and training materials/sessions to
assist in rolling out your project. In particular I’ve
highlighted two areas here that Change Management directly impacts.
These keys aren’t just for IT projects, but for any major transformation. Break down the project, develop a robust early assessment (I’ve seen a couple projects in my short consulting career that this would have saved), and budget for enough change management. Great change management professionals make an incredible difference on the success of a project.
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