Has Nigeria Become the World’s Junk Yard of Abandoned and Failed Mega Projects worth Billions?
Dim1, N. U., Okorocha2, K. A., & Okoduwa3 V. O.
The Nigerian construction industry is mostly concerned with the development and provision of projects such as roads, bridges, railways, residential and commercial real estates, and the maintenance necessary for the socio-economic developments contributes immensely to the Nigerian economic growth (Bureau of Statistics, 2015). Butcher and demmers (2003) described projects as an idea which begins and ends by filling a need. However, a project fails when its idea ends without meeting the needs and expectations of its stakeholders.
Nigeria Has Become the World’s Junk – Yard of Abandoned and Failed Projects worth Billions of Naira!
Hanachor (2013), revealed that projects form part of the basis for assessing a country’s development. However, a damming report from the Abandoned Projects Audit Commission which was set up by the Ex-President Goodluck Jonathan in 2011 revealed that 11,886 federal government projects were abandoned in the past 40 years across Nigerian (Abimbola, 2012). This confirmed the assertion by Osemenan (1987) “that Nigeria has become the world’s junk –yard of abandoned and failed projects worth billions of naira”.
Abandoned projects including building and other civil engineering infrastructure development projects now litter the whole of Nigeria.
Physical projects do not only provide the means of making life more meaningful for members of the community where the projects are located, successful projects also result in empowerment and collective action towards self improvement (Hanachor, 2013).
This Issue of Abandonment Has Been Left Without Adequate Attention for Too Long, and Is Now Having a Multiplier Effect on the Construction Industry in Particular and the Nigeria’s National Economy as a Whole. (Kotngora, 1993)
PROJECT FAILURE
Project Failure might mean a different thing to different stakeholders. A project that seemed successful to one stakeholder may be a total failure to another (Toor and Ogunlana, 2008). Some stakeholders, more especially the project users and some private owners, think of failed projects as a situation where a completed building project collapsed, a situation where by a completed dam project stopped working after few days of completion, or a completed road project that broke down after few months of completion. Other experienced stakeholders, such as engineers and architects conform to the iron triangle by Atkinson (1999) which states that the most strategically important measures of project failure are “time overrun”, “cost overrun”, and “poor quality”.
Turner (1993) noted that a project fails when the project specifications are not delivered within budget and on time; the project fails to achieve its stated business purpose; the project did not meet the pre-stated objectives; the project fails to satisfy the needs of the project team and supporters; and the project fails to satisfy the need of the users and other stakeholders. Lim and Mohamed (1999) cited in Toor and Ogunlana (2009) clarified that there are two possible view points to project failure namely; the macro-level and the micro-level. They further explained that the macro view point reviews if the original objectives and concepts of the project was met. Usually the end users and the project beneficiaries are the ones looking at the project failure from the macro view point, where as the project design team, the consultants, contractors, and suppliers review projects from a micro view point focusing on time of delivery, budget, and poor quality.
In the early 1990s, the failure as well as the success of any project was determined by the project duration, monetary cost, and the performance of the project (Idrus, Sodangi, and Husin, 2011). Belout and Gauvrean (2004), also confirmed that the project management triangle based on schedule, cost, and technical performance is the most useful in determining the failure of a project. Moreover, a project is considered as an achievement of specific objectives, which involves series of activities and tasks which consume resources, are completed within specifications, and have a definite start and end time (Muns and Bjeirmi 1996, cited in Toor and Ogunlana, 2009). Reiss (1993) in his suggestion stated that a project is a human activity that achieves a clear objective against a time scale. Wright (1997) taking the view of clients, suggested that time and budget are the only two important parameters of a project which determines if a project is successful or failed. Nevertheless, many other writers such as Turner, Morris and Hough, wateridge, dewit, McCoy, Pinto and Slevin, saarinen and Ballantine all cited in Atkinson (1999), agreed that cost, time, and quality are all success as well as failure criteria of a project, and are not to be used exclusively.
FACTORS OF PROJECT FAILURE
Cookie-Davies (2002) stated the difference between the success criteria and the failure factors. He stated that failure factors are those which contributed towards the failure of a project while success criteria are the measures by which the failure of a project will be judged. The factors constituting the failure criteria are commonly referred to as the key performance indicators (KPIs).
Time and Cost Overrun
The time factor of project failure cannot be discussed without mentioning cost. This is because the time spent on construction projects has a cost attached to it. Al-Khali and Al-Ghafly, (1999); Aibinu and Jagboro, (2002) confirmed that time overrun in construction projects do not only result in cost overrun and poor quality but also result in greater disputes, abandonment and protracted litigation by the project parties. Therefore, focus on reducing the Time overrun helps to reduce resource spent on heavy litigation processes in the construction industry (Phua and Rowlinson, 2003). Most times, the time overrun of a project does not allow resultant system and benefits of the project to be taking into consideration (Atkinson, 1999). Once a project exceeds the contract time, it does not matter anymore if the project was finally abandoned or completed at the same cost and quality specified on the original contract document, the project has failed. Furthermore, Assaf and Al-Hejji, (2006) noted that time overrun means loss of owner’s revenue due to unavailability of the commercial facilities on time, and contractors may also suffers from higher over heads, material and labour costs.
Poor quality/Technical Performance
The word “Performance” has a different meaning which depends on the context it is being used and it can also be referred to as quality. Performance can be generally defined as effectiveness (doing the right thing), and efficiency (doing it right) (Idrus and Sodangi, 2010). Based on this definition of performance, at the project level, it simply means that a completed project meets fulfilled the stakeholder requirements in the business case.
CAUSES OF PROJECT FAILURE
A lot of research studies have investigated the reasons for project failures, and why projects continue to be described as failing despite improved management. Odeh and Baltaineh, 2002; Arain and Law, 2003; Abdul-Rahman et al., 2006; Sambasivan and Soon, 2007; all cited in Toor and Ogunlana, 2008, pointed out the major causes of project failures as Inadequate procurement method; poor funding and availability of resources; descripancies between design and construction; lack of project management practices; and communication lapses
The contract/procurement method
A result obtained from two construction projects which were done by the same contractor but using different procurement methods showed that rework, on the design part which occurs when the activities and materials order are different from those specified on the original contract document, makes it difficult for the project to finish on the expected time (Idrus, Sodangi, and Husin, 2011). This is as a result of non-collaboration and integration between the design team, contractor, and tier suppliers. The rework on the design portion has a huge impact on project failure leading to the time overrun. The traditional method of procurement has inadequate flexibility required to facilitate late changes to the project design once the design phase of the construction project has been concluded.
Nigerian most widely used procurement method is the traditional method of procurement (design-bid-construct) which has been confirmed to be less effective to successfully delivery of a construction project (Dim and Ezeabasili, 2015). And, the world bank country procurement assessment report (2000) cited in Anigbogu and Shwarka, (2011) reported that about 50% of projects in Nigeria are dead even before they commence because they were designed to fail.
The way the construction projects are contracted, in addition to the way the contracts are delivered, contributes to the causes of projects failure. Particularly, among the methods of project contracting is lump-sum or a fixed-price contracting method, in which the contractor agrees to deliver a construction project at a fixed price. The fixed-price contract can be low-bid or not however, once the contract cost has been agreed upon the contract award, it cannot be changed. And, contractors are expected to honor and deliver the contract agreement, failure to do so can result in a breach of contract which can result in the contractor being prosecuted.
Awarding a contract to an unqualified personnel also contributes to project failures. When a contractor places more emphasis on money and the mobilization fee after a construction project has been initiated instead of getting the right workforce and skilled professionals that will execute the project. Instead the workforce chosen will often not be base on competence and required skills rather it will be based on availability. Moreover, poor strategy and planning by contractors who have overloaded with work also contributed to one of the causes of project failure.
Poor funding/Budget Planning
A lot of public projects in the Nigerian construction industry failed as a result inadequate funding, and the difference between the national annual budget and the budget actual released. Most of the Nigerian public projects are signed even before the actual release of the national budget. The difference in budget of the contracted project and the actual budget release can get the contracted company stuck as a result of inflation of prices, scarcity of construction material at the time of the budget release and mobilization to site. Also un-planned scope of work which can be as a result of the contractor working on another contract when he is called back to mobilization to start work. Moreover, poor budget planning is a regular mistake made by some contractors by not undertaking feasibility assessments before starting the design. The construction project should be planned according to the available resources and not according to the unrealistic expectations a client has in mind.
Discrepancies Between the Design and Construction
Limited collaboration between the contractors, engineers, and the architect results in discrepancies between the project designs and construction on site, and further leads to rework. Changes on a project designs, and changing to the scope of work in the middle of construction processes on site can be dangerous, and can lead to time overrun, increase in cost, and most of all can lead to abandonment. Moreover, many cases have been seen where the designs from the architects are not buildable on site, while In some cases, most contractors are unable to adequately specify the scope of work for the construction processes on site. Therefore any default on the design by the architect can be an opportunity for the contractor to make more money which might cause the project duration to exceed the time specified on the contract document.
RESEARCH METHODOLOGY
This research starts with a general reasoning or theory which says that the major cases of project failure in the Nigerian construction industry are defined based on time overrun and cost overrun. The findings from the data analysis will help on the decision to accept the theory or not. The research data was collected from the progress report for the month ending of October, 2015 published by the Nigeria of Federal Ministry of works on thirty-nine on-going highway construction projects at the South-South geopolitical zone. The table 1 below shows the information on the data collected which comprises of the project title, contract Number, project description, the contractor that was awarded the projects, the date of project commencement, date of completion and the extended date if any. The scheduled time for each project was specified as follows: project commencement date labeled as “a”, project completion date labeled as “b”, and the extended date labeled as “c”.
DATA ANALYSIS
The data analysis was done with the use of Microsoft excel. The analysis started by obtaining the number of days between the date of commencement of each project and the date of completion to show the duration of each highway project. And, the number of days between the project completion date and the extension date showed the time-overrun. The project duration and the extended days were obtained with the use of NETWORKDAYS function in Microsoft Excel which calculates the number of working days between two dates excluding weekends and any dates identified as holidays.
The standard deviation between the specified project duration for each highway projects and the extended days was calculated to obtain the extent to which each highway project contract failed on its time of delivery. This was denoted as the degree of failure. The table 1 above showed the projects ranking which was done based on the degree of failure of all the highway projects. The highway projects that were ranked from one to sixteen have low degree of failure and are represented with green color, while the rest are those with high degree of failure and are represented with red color.
FINDINGS
The findings made showed that the successfully completed highway projects have no extended days or time overrun, and the successful on-going highway projects are still on schedule and have no extended days unlike the on-going highway projects that have already failed as a result of the extended dates. Other projects have been abandoned because they have exceeded the delivery date as specified on the contract document, and have no extended date of completion. Thus, no work is going on.
Figure 2 above showed that 14% of highway projects are still on-going projects because they have not exceeded the original date of completion as specified on the contract document. However, they are heading towards failure because they have been given an extended date of completion which can be as a result of some critical activities running behind schedule, causing delay on the critical path network of the projects. Moreover, the other 86% completely failed because they have exceeded their completion date specified on the contract document.
The figure 3 above showed that 63% of the successful highway projects are still on-going because they have not exceed their completion dates, and they are not yet completed. However, those on-going highway projects might end up as failed projects as a result of poor funding, discrepancy between the design and the construction on site, and conflict between the construction parties or stakeholders.
“Say what you will do, and do what you said” or “Say as you will do it, and do it as you said”
CONCLUSION AND RECOMMENDATION
The idea of knowing what a failed project is, the factors and the causes is very important in project management. Success in project management can neither be achieved nor measured without the knowledge of project failure, its factors, and causes in the Nigerian construction industries. This work has shown that project failure is as a result of exceeded time of delivery, cost overrun, and poor quality. However, the analysis was only done based on exceeded time of project delivery because of the nature of the data collected.
This work suggested a few approaches to help reduce the number of failed projects in the Nigerian construction industry if properly implemented. Firstly, Having good collaboration between the project stakeholders involved in a construction project at the early stage of project conception is most important in order to accomplish the project objectives, and deliver the project on time, within budget, and quality specified on the original contract document (Othman, 2006).
Secondly, Adopting the ISO 9000 technique which is used for quality management will also help in achieving a successful project delivery. This technique states “ say what you will do, and do what you said” or “say as you will do it, and do it as you said”. This technique is not an indication of high quality but it promotes control and consistency which leads to specialization, and improved productivity and quality. Also, adopting the principles of lean construction will help to reduce waste within the construction and stream-line activities in order to improve the on-time delivery of projects.
Thirdly, Learning from the precedent failed projects, how those projects failed, and the reason for their failures. This will help the project manager to plan and mitigate the risks of project failures in the future. And, finally, more seminars and workshops will help to educate and enlighten clients (the federal government representatives), users, contractors, engineers, and architects on what is project failure, the factors that contributes to abundant failed projects, and their causes.
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7 Tips You Need to Be a Super Project Manager
66% of IT Projects Fail
Only one in three software projects will turn out to be successful. According to Standish Group’s 2015 Chaos report, 66% of technology projects (based on the analysis of 50,000 projects worldwide) end in partial or total failure. More surprisingly, these statistics have been the same for the last five years, the report shows. Furthermore, 17% of large IT projects go so badly that they can threaten the very existence of a company.
On Average, Large It Projects Run 45% over Budget and 7% over Time, While Delivering 56% Less Value than Predicted
Despite such failures, huge sums continue to be invested in IT projects and written off. For example the cost of project failure across the European Union was ┚¬142 billion in 2004.
It Projects Always Come with an Element of Risk, but There Are Huge Gains to Be Had If We Can Just Avoid Some of the Factors That Contribute Frequently to Project Failure
What makes a IT project successful, though?
According to the Standish Group, a successful project is on time, on budget and has satisfactory results (value, user and sponsor satisfaction, and meets target requirements). Other measures of success are widely known and accepted as true such as getting requirements right, providing effective leadership, and having full support and engagement from sponsors and users. Without these, it’s unlikely that any project would succeed.
But there’s more to success than what is widely known and, apparently, rarely followed. To reduce the risk of failure for your tech project, here are six key actions to take on the road to success.
1. Executive Vision and Involvement
Without a Executive Senior Sponsor Its Easy for Projects to Fail with the Organizational Resistance That Accompanies Large Change
Executive involvement is a primary variable in predicting the success of an IT project. Having a leadership team aligned across an organization articulating the purpose, value, and rationale for a project goes a long way towards getting stakeholders and end-users pulling the proverbial rope in the same direction.
2. Have a clear view of scope and timetable
Oftentimes, a tech project flops because its developers fail to plan and rush forward with an idea. However, some project managers plan so meticulously that they end up falling behind and lose momentum. The best approach is somewhere in between.
Interviewing team members, documenting requirements, prioritizing what is “mission critical” versus “nice to have,” getting agreement across stakeholders can feel like a never-ending cycle. As a result, requirement gathering has fallen out of fashion with many organizations in the past few years.
However, the ideal starting point for a successful technology project is to have a set of fundamental requirements with sufficient detail to develop against.
Requirement Gathering Is Labour-intensive and Challenging but Remains the Roadmap and Measuring Stick for Software Projects
This approach allows you to maintain sight of the business benefits as well as engaging stakeholders and responding to their feedback. In combination with a clear business case, a well-defined set of requirements also simplifies design and testing, two areas where projects tend to go sideways.
Ensure that requirements for the project are clearly defined and agreed upon among stakeholders and that you have a way to track, measure, and manage changes in requirements as appropriate during the project.
3. Define how you will deliver
When it comes to delivering a major project, one size does not always fit all. All products are customizable to some degree, so what might have worked in one company may not work in another company.
That being said, why reinvent the wheel if it’s already proven successful? Sometimes it can be more beneficial to use an existing off the shelf solution. Whichever direction you take, choose the delivery mode that works best for your company.
4. Risk Identification and Management
Every project has risk and there are many factors out of your control. People leave the organization, for better or worse, leadership changes, budgets get cut, however, many risks to projects can be mitigated or even eliminated with some forethought and on-going management. For example, do you have the resources you need to deliver the project (resource risk). Are project goals clearly understood and requirements clearly defined (scope risk). Do you have a realistic project plan and timeline (time risk).
Mitigating Risk Is a Combination of Science and Art, and Always a Balancing Process
5. Test your product again and again
A technology project is something that should overall support your business. It should not be something that dictates and forces you to change your operations. If this is happening, you should shift gears and focus on tweaking the technology, rather than lowering expectations and adopting less ideal requirements.
Adequate testing is a must for any tech project. While some features may be fine with automated testing, the best approach is to have a dedicated testing team. Testing activities should mirror those with the development team throughout the project’s lifetime. With thorough testing, a project should deliver with less design flaws or missing requirements.
6. Prioritize simplicity and performance
Developers often leave the external look and feel of a product to the wayside thinking these things are not necessities for the consumer to enjoy. However, user experience is absolutely critical to the success of the project.
Developers must consider things like storage, network requirements, processing speeds and overall performance in order to satisfy the customer. If users are going to have to wait for an extended period to allow information to load, there must be a good reason for the wait, otherwise they won’t return for future products.
Simplification and Improved Efficiency Is What Adds Value
Ultimately, using the product should be a smooth and intuitive experience. Additionally, tools and alternative routes must be placed logically without being intrusive. The process can be complicated, but the finished product should emit simplicity. After all, that’s what makes companies like Apple so successful. Simplification and improved efficiency is what adds value.
A Day in the Life of a Project Manager
We all know that project managers are responsible for managing projects through to completion while remaining on time and within budget, but how exactly do they do it? What does a typical day look like for a project manager?
Here’s a sample of what a typical day might look like for a project manager.
The Early Bird Gets the Worm, Success Comes to Those Who Prepare Well and Put in Effort
8.30 am: Starting the day
After settling in for the day’s activities, it’s time to plan out the day. Start up the computer, email clients, draft team schedules, organize time sheets and create the to-do list.
To-do lists help managers and their teams stay on track. If a manager notices that one team member has yet to deliver an assignment, they can address this issue first thing in the morning; otherwise, delays can build up and affect the project. Likewise, lists help managers see the next course of action for projects.
9:15 am: Time to get moving
Efficiency is a must and there is no time to be wasted in project management. After a quick review of project plans and to-do lists, the manager must be prepared to get his team moving right away.
Round up team members, review the project’s current position and emphasize the next course of action. In order to get the team moving on assignments, strong project managers set deadlines throughout the day.
Morning team meetings are also necessary to make sure each member understands the project and their assignments. It’s also a time to answer any questions for clarity or to get feedback or concerns from individuals.
While daily group meetings can be important, they are not always necessary and can be counter-productive. If the team is on the same page and everyone is ready to tackle the tasks of the day, spend a short period re-grouping so that the team can get on and complete their assignments. There’s no need to spend hours planning and reviewing.
10 am: Meetings, meetings, meetings
More than one project manager will be more than likely in the office and they will all need to work together for the benefit of the programme. This is why meetings with other managers and higher ups are necessary in a project manager’s day.
Meetings allow each project manager to go through the status of their respective projects and to track the weekly schedule and other deadlines. It is also a time to address any business-critical tasks that might come up.
It’s worth considering that only 7% of communication is spoken. The other 93% is made up of tone (38%) and body language (55%). So although facts and figures are easily communicated via email, letter or phone, an actual discussion or negotiation is best handled where you can see the other person and therefore are able to see for yourself what their tone and body have to say on the matter.
10:30 am: Tackling the small stuff
Meetings will be on and off throughout the day for project managers, which is why it’s important to tackle the small tasks in between appointments. Small tasks include wrapping project reports, booking future meetings, answering correspondences with other colleagues, reviewing items and team reports among other things.
It’s also important to schedule post-mortem meetings with the project team to review the success of projects in order to apply any lessons learnt to future projects.
11 am: Project kick-off meeting
When one project ends, another begins, which means it’s time for yet another project kick-off meeting. Kick-off meetings can take on various forms, depending on the type of business. However, they all share the same basic needs.
Every individual involved with the new project should be in attendance and have the latest version of project specifications in written form. As project manager, it might be wise to send this to team members several days before the kick-off meeting to ensure everyone has time to review.
During a kick-off meeting, it’s important to review the overall goals for the project, both commercial and technical details, break down functional requirements, and spend time for discussion and questions. By allowing team members to communicate questions and share ideas, it opens the lines of communication and may bring up potential concerns that might have been missed in the initial planning stages.
Conclude kick-off meetings with a definition of the next steps and be sure individuals are aware of deadlines and their assignments.
11:30 am: Reviewing project specs, budgets and scheduling submissions
Other important tasks to tackle in between meetings include reviewing specifications and budgets and schedules for future projects. If a project begins that day, now would be a good time to apply the finishing touches to the project documentation before presentation and approval.
When it comes to establishing project estimates and budgets, a project manager must bring all of his experience into play in order to create a realistic budget that includes wiggle room for factors such as project complexity, team experience and skill levels, stakeholders involvement, time needed, third-party services needed, and contingency allowances among many other things.
It’s Not Easy to Squeeze in a Lunch Break, but It’s Often Necessary for the Project Managers Health and Sanity
12 pm: Lunch
In the midst of the seeming chaos that is project management, be sure to fuel up for the rest of the day’s work. Lunch is also a great span of time to check in with team members to make sure they are still on target for later-day deadlines.
2 pm: Launching the next project
After digesting lunch, it’s time to launch the next project. Get the whole team ready to go live and present the project to the client and begin testing aspects of the project in a live environment. It’s a time to spot problems and address them and review schedules and deadlines and other project needs.
3 pm: Time for everything else
The final two hours in the office are spent addressing everything else on the project manager’s plate. A project manager must be good at multi-tasking and whatever duties couldn’t be accomplished throughout the day are reserved for the final hours. Most of the time, lower priority tasks are reserved for afternoon hours. These tasks could include project update meetings with various departments, logging finances, reviewing monthly project schedules, approving time sheets, writing weekly reports, sorting purchase orders and communicating with suppliers. There are so many other small to-do list items that project managers are responsible for, but are often overlooked.
Spending Time at the End of the Day as Well as the Beginning to Review and Plan Will Only Help You Succeed as a Project Manager
5 pm: Review the day, plan for tomorrow
Before heading home, review the day’s list and what’s been accomplished. Anything that has been added or was left unfinished should be scheduled for the next day or sometime throughout the week. Reflect on your team’s work and clear the email inbox. Use a filing system that makes sense for you and be ruthless about deleting stuff. The beauty of an empty inbox is a thing to behold. It is calming, peaceful and wonderful.
How To Deliver On The Promise of MegaProjects
Due to the large scale and outlook attached to them, mega-projects have a large opportunity for failure. Typically, the failure begins at the outset of the project, whether that be due to poor justification for the project, misalignment among stakeholders, insufficient planning, or inability to find and use appropriate capabilities.
Underestimated costs and overestimated benefits often offset the baseline for assessing overall project performance. This is why it is important for organizations to first establish social and economic priorities before even considering what projects will answer their needs. Once social and economic priorities are established, only then can a project be considered. Selecting projects must be fact-based and transparent in order to ensure accountability with stakeholders and the public.
Successful Megaprojects Must Have Robust Risk-analysis or Risk-management Protocols
It’s also important to maintain adequate controls. Successful megaprojects must have robust risk-analysis or risk-management protocols and provide timely reports on progress relative to budgets and deadlines. Typically, progress is measured on the basis of cash flow, which is less than ideal as data could be out of date and payments to contractors do not correlate construction progress. Instead, project managers should deliver real-time data to measure activity in the field. For example, cubic meters of concrete poured relative to work plans and budgets.
Overall, improving project performance requires better planning and preparation in three areas: doing engineering and risk analysis before construction, streamlining permitting and land acquisition, and building a project team with the appropriate mix of abilities.
Project developers and sponsors should put more focus into pre-planning such as engineering and risk analysis before the construction phase. Unfortunately, most organizations and sponsors are reluctant to spend a significant amount of money on early-stage planning because they often lack the necessary funds, they are eager to break ground and they worry the design will be modified after construction is underway, making up-front designs pointless.
However, it’s proven that if developers spend three to five percent of capital cost on early-stage engineering and design, results are far better in terms of delivering the project on-time and on-budget. This is because through the design process, challenges will be addressed and resolved before they occur during the construction phase, saving both time and money.
It’s not unusual for permits and approvals to take longer than the building of a megaproject. However, if developers look to streamline permitting and land acquisition, that would significantly improve project performance. Best practices in issuing permits involve prioritizing projects, defining clear roles and responsibilities and establishing deadlines.
In England and Wales, developers applied these approaches to cut the time needed to approve power-industry infrastructure from 12 months to only nine months. On average, timelines for approval spanned four years throughout the rest of Europe. Likewise, the state of Virginia’s plan to widen Interstate 495 in 2012 was able to cut costs and save hundreds of homes thanks to land acquisition planning by a private design company.
Investors and Owners Must Take an Active Role in Creating the Project Team
When it’s all said and done, projects cannot deliver the best possible return on investment without a well-resourced and qualified network of project managers, advisers and controllers. Investors and owners must take an active role in creating the project team.
It’s not enough to have a vague overview of what the project might look like in the end. Instead, it’s necessary to review risks and costs and draft a detailed, practical approach to tackle various issues. An experienced project manager cannot do it all alone. The project team must include individuals with the appropriate skills, such as legal and technical expertise, contract management, project reporting, stakeholder management, and government and community relations among others.
Failure to Properly Plan for These Projects Could Have a Negative Impact on Society
While mega-projects are important in filling economic and social needs, failure to properly plan for these projects could have a negative impact on society. Take Centro Financiero Confinanzas (Venezuela), the eighth tallest building in Latin America at 45 stories, located in the financial district of Venezuela’s capital, Caracas for example.
To those unaware of its history, the Centro Financiero Confinanzas is actually home to over 700 families, a “vertical slum” that is a truly fascinating example of reappropriation of space in an urban environment. An ironic symbol of financial failure that was intended to represent the unstoppable march of Venezuela’s booming economy.
It’s much more than an unbuilt building, bridge or tunnel, failed mega-projects are a blow to the economic growth and social improvements of communities around the world.
The Good, the Bad and the Ugly of Requirements Management
Most project managers know the importance of requirements management. Without a solid foundation and grounding in the subject, requirements management quickly turns towards the complex and difficult side.
Why Manage Requirements?
In the final analysis, all projects are completely driven by requirements. Requirements are usually not cast in stone. Stakeholders gather insights and more knowledge of their true needs with time. This means that they can change their minds about requirements, no matter how late in the game. Requirements should therefore be managed proactively in anticipation of change.
However, if requirement definitions are not set up properly in the first place, expect that the quality of delivery will suffer, along with more schedule delays than imagined, and a big drain on the budget.
Broad project requirements help to establish a baseline for objectives. Subsequent change requests would thus require approval by the right authority; a change control board is usually set up to investigate and approve changes to requirements. The objective of baselining is not to prevent or discourage changes, but to ensure that approved changes are relevant and deserve the priorities assigned to them.
The simplest way for project managers to reduce the probability of missing critical requirements is to hold requirements review sessions to ensure that stakeholders understand the requirements and that any ambiguities, inconsistencies and omissions are identified and addressed to facilitate requirements approval or sign-off.
However, when inaccurate requirements are in play, team members end up reworking those activities multiple times. The only sensible course of action is to deliver requirements up front in an accurate manner. That way team members will be able to immediately identify any missing components early in the project lifecycle.
It’s vitally important to employ tools designed to assess requirement quality at the beginning of the project. These tools will help to identify any requirements that are vague or missing early enough to improve the changes of success for the project. Even simple tools like guidelines and checklists can solve major problems later on. You may also consider automated tools, depending on your level of technical expertise.
The Good, the Bad and the Ugly of Requirements Management
Good Requirements
Requirements that meet the “good” standard are ones that anyone can easily evaluate to quickly and clearly determine that all the needs have been accurately met by the project.
The common criteria used by project teams to properly evaluate requirements is as follows:
Verifiable: Ensure that all deliverables are able to be evaluated to ensure they have met all necessary requirements. Verification techniques such as modelling, analysis, review by experts, simulations, and demonstrations or testing.
Testable: Requirements are able to be assessed using the most basic of all criteria. This includes quantitative measurement like “pass or fail.”
Traceable: Requirements should be tagged to specific sources. Examples are compliance requirements, best practices, industry standards, and use cases.
Clarity: All statements should be presented in unambiguous ways so the cannot be interpreted differently by different team members.
Bad Requirements
Bad requirements are marked by their incompleteness and lack of clarity. They are hard to understand and implement. They generally possess these characteristics:
Inconsistency: Without clarity, you’ll find requirements that are in conflict with other requirements! This is very frustrating because there’s no way that either one will ever be satisfied.
Non-valid: These are requirements that team members simply cannot understand. They will never be able to accurately assess or approve non-valid requirements.
Non-ranked: These requirements have not been correctly prioritised. Without proper ranking, it’s difficult for team members to be able to assess them properly.
The risk to the project not meeting the clients expectations is not something that will ever be entirely removed. However, having a specific criteria upon which to benchmark a project is a great way to reduce this risk.
Risks fall into two main categories. Systemic risk is inherent to the nature of the work and cannot be avoided. The non-systemic risk is a bit different and relates from the activities in the project itself. One of the greatest of all non-systemic risks is that of bad requirements management.
Teams that wish to reduce the risk of the project not meeting the clients expectations substantially are best served by establishing specific requirements in the initial stages. Common goals like being “on time and on budget” while maintaining a high level of quality will require dedication from teams members who have eliminated as much non-systemic risk as possible.
When you’re next involved in a project where requirements come up in a discussion, always pay careful attention to the good, the bad, and the ugly that could result without proper due care and attention.
Taking the Right Path to Good Agile Implementations
1) A Wise Man Said Only Fools Rush In
Companies that goes nuts for agile because they know they have to deliver faster and for less cost to keep up with competitors may be making a big mistake and face a collapse of their efforts.
If they focused first on a deep understanding of their business’ needs, they could more accurately decide if agile is a good fit. A better approach for you to take is analyse your current processes to determine if agile methodologies actually support your goals and needs.
2) Educated Stakeholders Make Excellent Allies
Agile works from a focal point of improving quality delivery and frequency. It does not start with reducing time to market or cutting costs. Those benefits are a result of implementing agile methods over time, after the requisite investment of time and resources has been made.
3) Don’t Do the Project Without at Least One Committed Product “Owner”
A “product owner” is a the committed business leader who will make or break the project. This person will be expected to put at least half of their time into the project. They’ll also be responsible for getting all the decisions made through the right channels in a reasonable period of time. You must have a leader like this to succeed.
4) Gain Consensus on the Definition Of “Finished”
Everybody on-board needs to agree on what constitutes being finished with any stage of implementation. For some, it will mean that by the end of each and every iteration, the production-ready software will be available. This is not always possible, so get out ahead of a potential problem and gain consensus.
5) Build an Exceptional Cross-Functional Team
Cross-functionality is what separates the ineffective agile teams from the high-performance ones. Team members have to be proficient in performing any and all necessary tasks so that they’ll be able to always deliver what the customers need.
Team building requires that you identify the right parties and that you shape them into a functional team by making sure that they share your own true goal of always delivering massive value to product owners.
6) Make the Proper Investment in the Tools That Support Agile
The beginning stages of any agile project will involve you investing in the of the robust frameworks, infrastructure, and process automation tools that fully support agility. This includes a wide range of solutions like continuous build servers, automation testing, video conferencing, interactive chat, and software frameworks. Don’t scrimp on other important details like the solution architecture, either.
7) Retrospectives Need to Be a Main Priority
Inspection and adapting are the keys to agile. Organisations using this methodology use a vehicle called “retrospectives” to ensure these tasks are being performed correctly. A proper retrospective should embrace the qualities of self-improvement and transparency. Any actions that are a result of the retrospective must be given the highest priority. This is especially true of estimations, which are crucial to achieving the kind of team velocity that keeps projects on track.
8) Start the Project with a Solution Architecture
Even though documentation is not always the most glamorous part of any project, you’ll be well served to make sure you understand that documentation is still important to a successful project. Using a solution architecture pays off because it serves a blueprint for the final project that will be delivered by the team. Team members need this document so they understand what will happen if they make changes. Members who are added to the project at later days will use the documentation as a reference point so they can be brought up to speed.
9) Embrace the Fact That Change Is Coming and Plan for It
You can’t make a change without a cost in agile. Change is something you always have to embrace philosophically, but be aware of the costs and the impacts to the project. When you are doing the estimation process, factor in potential changes when applicable.
10) You and Your External Partners Should Have an Agile Relationship
Agile is not always the best fit for traditional vendors. They prefer contracts that use fixed prices and fixed outcomes. When you switch to agile you’ll need to make a point out of understanding the ramifications the changes will have with your vendors. You and they may have to make some changes to keep the relationship running smooth.
Try to build a transparent relationship with all of your external vendors. Risk Reward contracts that employ clearly defined KPIs work amazingly well for agile organisations.
The Good, the Bad and the Ugly of Agile Methodologies
The “agile” buzzword has really taken hold among a myriad organisations worldwide. That result is not particularly surprising. Who wouldn’t love to employ light and fast tactics that allow them to respond to rapidly changing challenges? Despite all the optimism about agile methods, the bigger question is how well companies are actually doing when it comes to employing these methodologies in the real world. Without understanding what the core objectives of embracing agile methods are, it’s not going to be easy to gain results.
Agile methodology is employed in order to reduce the time, risk, and cost that is associated with a project. However, these massive benefits are not going to materialise out of thin air. They are the result of the dedicated work of a team who is well versed in implementing the methodology.
To become “agile” will require organisations to take a quantum leap in their culture. They will have to embrace the entire philosophy behind these methods or no real change will take place. Truly agile companies are the ones that have gone through a transformative process in order to implement brand new processes that say goodbye to the past. This takes a lot of work and effort and not all organisations are willing or able to do this.
Ugly Agile Implementations
Project teams that are solely focused on results and who don’t do their homework end up with very ugly agile implementations. These teams are so excited about agile as a concept that they convert everyone in their organisation into adopting the methods. The problem is, they do not spend the requisite time getting everyone on board with exactly what needs to be done.
Because of this oversight, the projects are plagued with poor communications and engagement. The project team and others in the organisation are each working on their own tasks with no thought to how the pieces fit together in the “big picture.” This is a major problem because agile methods really only shine when the whole organisation works as one well-oiled unit. In this scenario, major issues at the core of the project are neglected and the entire project goes off the rails. This leaves a bad taste in the mouths of managers, who are no longer excited about agile methods.
Really ugly agile implementations have the wrong focus. Because of this myopia, the true benefits of agile employment are never realised. Before long, things, unfortunately, go back to “normal.”
Bad Agile Implementations
Some businesses completely miss the boat when it comes to agile deployment. They’re interested in receiving the benefits of reduced costs, faster time to market, and cutting “red tape.” Despite this knowledge, they’re not truly committed to the all of the values that are espoused by the Agile Manifesto. Without this commitment, they cannot possibly hope to fully embrace a functional implementation.
Organisations like to invest in education and communications, but they ignore important concepts like utilising the tools that help them truly embrace agility. They even form teams that understand cross-functionality, but without empowerment they are unable to make vital decisions.
Lastly, organisations that do poor agile implementations perform project reviews regularly enough, but the input from the meetings is never acted on by anyone. The key issues that are preventing proper implementation are never properly addressed and the project fails on its promise. Organisation members swear off the agile methods forever at this point.
Good Agile Implementations
When business personnel and IT staff work together, good implementations of agile are the result. These units work together so that a project delivery methodology is presented to the organisation that meets its needs. They also spend the time to create the cultural changes needed to ensure the methods are successful.
In organisations like this, team members, business end users, along with senior management and key stakeholders received a continuous education that empowers them all. Cross-functional teams that excel are the results. These organisations also invest in the techniques and tools that fully support agile. That includes test driven development, continuous builds, new standards, and more. With these in place, a platform that ensures long-term success will be installed.
Particularly telling, these businesses conduct regular project reviews which they conceptualise as opportunities to improve instead of something that simply has to be done. When change is needed, they embrace it and plan for it. When it arrives, they are ready and the organisation continues to excel. A sign of a good agile implementation is when the organisation is commits to making long-term changes that will benefit the methodology in the long run.
It doesn’t pay to underestimate just how difficult implementing good agile really is. Since major internal changes to how project delivery is done need to be embraced, the road ends up being a challenging one. Traditional managers will be challenged because empowered teams now have more input than ever before.
Once a good agile implementation is in place, the benefits are obvious and plentiful. An energised, cross-functional community of empowering people who are all focused on common goals get more done than ever before. Good implementation put platforms into use that improve project delivery because they allow for test-driven development, continuous integration, standards implementation, and best practice design applications.
4 Lies about Procurement You Probably Believe
The world of Procurement is seemingly full of impassioned people absolutely certain about what procurement is all about. Like other great lies, many of these half-truths and misleading ideas sound agreeable to the ears and come packaged as good advice from influential people.
How many of these popular lies have you fallen victim to?
1. Procurement should have a seat at the C-table
It’s not so much an outright lie as an irritating half-truth – but the damage comes with what Procurement people do with it. The thought behind this is well-intended: Procurement people should be able to speak the language of senior executives as easily as they can talk about FIDIC or demand forecasting. Terms such as EBITDA, ROIC, and economic profit should be part of their everyday parlance. Procurement issues are often the least understood by the board and the CEO and must be explained in their language.
What on earth could be wrong with that? Nothing – if the Procurement people have full cognisance of their own tools and language – and can be persuasive to senior people of the value of Procurement.
Now, that’s where we have, what is kindly referred to, as a skills gap.
In reality, for Procurement with no reputation (outside of that pesky metric of cost) and few business-aligned projects to call upon, it can be incredibly hard to try and catch senior people’s ear – never mind a C-seat (see what I did there?).
2. You must carry out a competitive tender to obtain value for money
I’m trying to distance myself from the public sector here (noting I did co-author the CIPS book on contracting in the public sector) but even in the private sector there’s a desperate need to get three quotes.
Why three quotes?
Not five, not 11? ‘Cos the rules say three; that’s why.
And the rules of Procurement policy and procedures, well, they can’t be broken because the CFO or the head of internal audit (all very commercial animals?) will be down on Procurement like a ton of bricks.
When the three quotes are received the following conversation occurs – the highest price is rejected – ‘they’re ripping us off’ followed by – and I love this one about the lowest price quotation – ‘the price is too low, they must have got the specification wrong’ – and the contract is awarded to the middle-priced one”¦.surely there’s a better way to deliver value for money?
Perhaps starting with actually defining it!
3. Procurement is the only source of governance for 3rd party spend
Being the only source would suggest a 100%, right?
I’d be amazed – and delighted – if Procurement governed half of all the 3rd party spend. Words such as ‘influencing’ are sometimes bandied about to shore up this lie. What a surprise that sales people are either trained, or very quickly learn ways, to actually bypass Procurement when selling.
And the reason?
Obviously marketing, IT, auditors fees, construction/property, recruitment (I could go on) is completely different, say the senior people in those departments – echoing the views of the oh so helpful sales people. And Procurement just never gets near, as they can’t articulate (deliver?) the value they can add.
I await the avalanche of people commenting on this telling me I’m wrong. Please be assured you are exceptional in Procurement.
4. Procurement welcome innovation and strategic relationships and anything other than lower price
Few businesses view Procurement as a strategic process. Most often, Procurement staff report to the CFO. This astonishing trend indicates that Procurement is still viewed as a financial / accounting activity and not an operational strategic activity that directly impacts the bottom line.
Suppliers; if you have an innovative product or service, recognise that Procurement’s ‘raison d’être’ is to deliver cost savings. That’s what they are measured on, that’s what the research with CPOs and the C-suite say is the #1 priority. There’s oodles of other priorities such as local sourcing, sustainability, innovation, partnering, risk management – I could go on and on and on. But that’s the one they get measured on. Think that through, next time you’re pitching.
The take-away
Perspectives on Procurement need to change, mature and grow up. Lies like these need to be re-evaluated and abandoned. Procurement needs to change the way they engage and manage suppliers and their internal stakeholders; ‘adding value’ (a dreadful phrase!) means so much more than asking for a discount.
Stephen Ashcroft BEng MSc MCIPS (speaking here, very much in a personal capacity!) is Associate Director, Procurement and Commercial Advisory at AECOM, a Fortune 500 company. He’s a procurement learner stuck in the body of a procurement veteran, and with over 20 years’ experience still sees the glass as half full. Working with leading organisations across diverse industry sectors, Steve helps clients reimagine procurement to drive improved performance. A recognised advisor, speaker, lecturer, and author; the ever-hopeful Kopite shares his bright-eyed/world-weary views on Twitter @ThinkProcure, LinkedIn and his blog.
