The worst projects plan to be late and then slip 25% more.

This is according to research conducted by IPA. IPA has carried out a major study of industrial projects, looking at the difference between success and failure. They looked at 73 projects – half good, and half bad. The research team was involved face-to-face at the beginning of the project during the initiation phase, and then went back and collected more data once the project was closed.

IPA defined the best projects as those that:


  • Delivered 10% cheaper than the industry average
  • Had an execution duration/cycle time similar to the industry average or faster
  • Were safe and had no fatalities
  • Had no operational performance problems during start-up or in the first 12 months.

They defined the worst projects as those that:


  • Were 20% (or over) more expensive than the industry average
  • Had an execution duration/cycle time 20% slower than the industry average.


On average, the best projects were 18% cheaper and 8% faster than the industry average.  So, what makes a ‘best’ project?

The best projects had:


  • Better planning
  • Integrated team
  • Lower turnover of team members
  • Been under control.

Managing change was a defining part of keeping a good project under control.  Just under 70% of the worst-performing projects had major design changes during engineering.  Less than 20% of good projects had major changes.  The research team concluded that the majority of schedule slippage was concerned with major changes.

You might not expect it, but the worst projects took the longest to do project definition.  It’s not the time spent on defining the project that automatically guarantees success – it’s the quality of the planning done during this phase.

Lessons

Here are the lessons from the research:


  • Fundamentals are important:  the level of project planning is strongly correlated with project results.
  • An integrated and well-developed team is key to a successful outcome.
  • Poor execution practice will undo the benefits of good planning: changes made during execution erode the benefits of a good plan.
  • You will not have a ‘best’ project if you set conservative targets.  The best projects have a good plan, and competitive targets, which provide competitive results.  However, aggressive targets and poor planning are synonymous with failure.