You have probably heard about the CHAOS  study into project failures, now 15 years old but still often quoted and referred to. Since then, a few similar studies were undertaken by larger consulting companie, but they have offered little insight beyond what CHAOS report was saying.

If you read one of these studies, you will see that they go into estimating losses from derailed projects and you may notice that they only take very large projects into the considerations, those worth millions of dollars.

In my opinion, it is not the large projects that bleed money from organizations, but the smaller stuff, tens to (at most ) low hundreds of thousands in spend that can be authorized by mid-management because they “have money in the budgets to do it” .

Larger projects, which also fail spectacularly at times, are usually carefully looked into at the inception and measured agaist the strategic objectives. They usually receive enough attention from the C-level, which ensures good governance and strong sponsorship and project management. They are usually well funded. Usually is the key word in my assertions.

By contrast, smaller projects often receive little scrutiny in respect to their alignment with strategic business objectives, are often done on a whim, suffer from the lack of sponsorship, and are  poorely managed. In my experience, such projects die in droves and with little visibility, if any.

To ensure prudent cost management today, management must divorce itself from the notion that budgets are given to them to be exhausted, but this notion has to be subscribed to and instigated from the top of the organization to be successful. The seemingly insufficient trickle of waste from smaller project turns into a sea of waste which can be prevented.

Advertisements