Key activities and outputs associated with project definition & how it minimises risk

“Project definition phase” is the second phase which occurs after a project proposal has been accepted. This definition phase is lists out all of the requirements that will be associated with the overall projects results such as  scope and budget , work breakdown structure (WBS), a communications plans and risk management . The “project proposal phase” is designed to clearly identify the expectations of all involved parties. The plans designed during this phase will act as a blueprint to help manage factors such as time , change , cost , risk and issues which may arise throughout the project which could have devastating consequences on the project outcome.

In this phase the projects Scope and Budget must be set:

 The project scope and budget clearly sets out and defines a specific list of project goals , features , functions, deliverables and tasks to be carried out, and ultimately the overall budget. In layman’s terms the project scope consists of all work that needs to be completed in order to deliver a project.

After the project scope has been set the triple constraint matrix can be implemented which allows the team members to define whether the cost , scope and time of the matrix will be constrained , accepted or enhanced depending on the expected outcomes of the project.

                          

Developing a communications plan can prove to be a useful tool when providing the company stakeholders with information. A projects outcome must be beneficial to the Shareholders of the company with the main aim of maximising shareholder wealth. There should be truthful and clear communication provided to shareholders informing them of progress throughout the projects lifecycle, any negative setbacks in terms of the project may affect the shareholders negatively.

In the “project definition phase” assessing the levels of risk before they arise can prove beneficial in minimizing the risk associated with the project before a potential risk can arise and cause problems when the project is in full swing. Being able to properly assess risk beforehand can allow teams to have a contingency in place if a problem was to arise which will give the team the ability to solve it quickly and efficiently as it has been documented as a possible risk during the “project definition phase”. Managing risk beforehand will minimise the chance of problems related to the risks occurring as they have been foreseen ahead of time.

WHY PROJECTS FAIL

Lars Mieritz in his article “Gartner Survey Shows Why Projects Fail” uses research which classifies IT project as being small, medium or large. Review the failure rates for each classification and suggest reasons why each fail.

Lars Mieritz classified It projects as being small, medium or large depending on the projects budget:Small project= budget of less than $350,000,medium project = budget between $350,000-$1 million and a large Project = budget above $1 million.

A survey was carried out in 2012 and consisted of 150 companies over 5 countries the results of which are on the graph below coupled with the main reasons why the projects have failed.

 

The survey showed almost a 50% increase in the failure of Large projects in comparison to smaller projects, but why ?

Larger projects are harder to control especially if they are implemented over a longer period of time they can lose the run of themselves due to a variety of reasons.

Poor risk management: Not  appropriately evaluating financial risks and how to lessen possible impact.

Inexperience: Inexperienced team members.

Lack of leadership and communication: key figureheads are required to become a point of contact between all levels of management involved in the project aiming to ensure a smooth flow of information between all departments to avoid miscommunication which can ultimately add to the cost of the project.

These are however just a few key reasons why Large Projects fail. A suitable example of a failed large project is London 2012 Olympic project which came in at over £9 billion pounds , three times higher than it was expected.

(Symonds,2011)

Medium/Midsize projects face problems in terms of functionality issues in terms of actually completing the desired task with 24% of medium projects failing due to these issues.

A poorly designed project scope : Not planning , determining and documenting a specific list of desirable outcomes or goals will almost certainly lead to project failure as there is no predetermined path of success.

Inaccurate estimates: For  project with a limited budget the mistake of an inaccurate estimate would completely shatter and hopes of project failure as going over budget may not be an option.

(Symonds, 2011)

 

Small Projects have been proven to be the most successful and manageable and as according to Gartner “many small brooks make a great river”. That is not to say that all small projects will be successful this is not the case.

A small project may be forced to strictly adhere to a small budget without much room for leeway.

Lack of experience: smaller companies with smaller projects may lack the experience required to properly carry out and complete the project, due to budget constraints it may not be possible to hire the experience required.

Lack of detail: Due to shorter project lengths and smaller budgets some key assumptions may be overlooked as time constraints may not allow for in depth analysis of required details.

(Symonds, 2011)

15 causes of project failure

Link to cartoon image