Why do so many projects fail to deliver the benefits claimed?

In a previous job, I was involved in writing business cases and when I was asked to write the first one, I discovered that the organisation had no formal methodology for writing one and so I researched the area and developed a method of writing a business case with a clear, and realistic benefits realisation plan.

As I have already mentioned, in this first project I actually proved that there were no benefits in a multi-million pound organsiation wide project and it was halted for a few weeks whilst the management digested that – they decided to go ahead in the end for political reasons but at least they were under no illusions.

The reason we run projects is to realise benefits through change but 30-40% of systems to support business change deliver no benefits whatsoever and up to 70% of projects are considered to fail – either by overspending, overrunning or delivering no benefits.

Why do we do it?

Stephen Jenner talks about “delusional optimism” where we over emphasise a projects’ benefits and underestimate the costs and also about how project managers “spin success scenarios” whilst ignoring the possibility of mistakes.

Nearly half of respondents in a survey openly admit to overstating benefits to get funding.

With proper scrutiny and being held to account these things should be spotted before the project goes ahead but in the public sector this is even more vital because it’s not their money, it is taxpayers money and they need to demonstrate a sound investment justification and commitment to realising all forms of value.

We need to:

  1. Ensure the benefits claimed are robust and realisable
  2. Plan for all potential forms of value
  3. Realise benefits and create value
  4. Move from optimism in panning and pessimism in implementation to realism in planning and enthusiasm in implementation.

I’ll talk more about this again soon, but in the meantime, managers commissioning a project need to:

  1. Be clear about the benefits they are buying
  2. Remember that failing projects do not have brilliant business cases
  3. In most cases you can trace the failure of a project back to the start
  4. Beware of staff time savings, they are only vouchers and are rarely cashed in
  5. The business must own the benefits realisation process.

In the project I’ve highlighted the issue was that the preliminary business case had used a figure that could not be justified.  It had said that installing a new IT system would save each employee (tens of thousands) 15 minutes a week.   It seemed to be a no brainer!  Millions would be saved.   But I pointed out that firstly, there was no foundation to that 15 minute figure, no-one knew where it came from, and secondly, as Stephen Jenner points out, staff time savings are not money, they are a voucher.   How will you make or save money by your staff having an extra 15 mins a week?  It is highly likely that such a small amount of time would be absorbed, not put to a measurable benefit.   And certainly no jobs would be saved.

You can learn more about the work of Stephen Jenner here >>.

2 thoughts on “Why do so many projects fail to deliver the benefits claimed?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s