Case Study It Project Failure Due

Case Study

A comparison of two sets of ratings for the same cohort of projects showed that 74% of projects with satisfactory designs also had satisfactory outcomes years later.

 

The quality of a project's design is a strong indicator of its likelihood of success.

The World Bank's Quality Assurance Group (QAG), DPMG's predecessor, compared two sets of ratings for the same cohort of projects. One set was based on evaluations of the design quality of each project. The other ratings measured whether these projects had achieved their development objectives by the time they closed.

Of the 385 projects evaluated, 74% of projects with satisfactory designs also had satisfactory outcomes years later. By contrast, projects rated less than satisfactory on the basis of their designs were twice as likely as others to fail.

The study also showed that design flaws could be corrected if projects were evaluated early during their implementation. More than half of the projects found to have poor designs were turned around during supervision, and those that were evaluated early performed better than those evaluated later.

Four design problems were highly correlated with risk of failure.

Overly complex project designs
Some project objectives are too complex and ambitious for the institution or government to manage. Donors’ (and governments’) enthusiasm tends to expand the scope of a project beyond the capabilities of weaker governments. This complexity takes many forms:

  • Multiple sub-sectors, such as the primary, secondary, and tertiary levels of education
  • Multiple beneficiaries, such as disabled children, street children, migrant children, girls in ethnic minority areas, and illiterate adults
  • Multiple reform objectives, such as access, quality, equity, and efficiency.

Complex projects place heavy demands on implementing entities that often have limited capacities. The mismatch between complexity and capacity occurs most frequently in low-income and fragile states.

Poorly formulated causal links between inputs, outputs, and outcomes
Poorly formulated objectives set up targets that are impossible to achieve. For example, the goal of one project was to produce more trained engineers. However, the project focused on construction of new training facilities that would not have produced any graduates by the end of the project.

Poorly selected indicators of success
Poorly selected indicators of success leave all parties to the project flying blind. For example, one project gave four indicators of its objectives. Three of these were outputs (such as the number of vaccination doses procured), not outcomes (such as the number of children vaccinated). In the same project, one outcome measure was inappropriate: it applied to the entire country, not to the sub-regions addressed by the project.

Premature approval
Sometimes projects are approved before they are ready. Examples include infrastructure projects that begin before the bidding documents for the first year of work have been prepared or projects that begin before baseline data for indicators of intended outcomes have been collected.

When projects enter the portfolio too soon, project teams may spend the first year or longer addressing issues that should have been handled before the project started. In these cases, the project is not likely to meet its objectives by the time resources have been spent.

Believe it or not, projects fail…all the time. And not just small projects from small organizations, but large ones of huge significance. Some of the most powerful companies in the world have experienced project failure and lost billions of dollars as a result. Yes, BILLIONS! Imagine being that project manager?!

Hopefully, you’ll never experience a career setback such as a multi-billion dollar failed project, but it is likely that you’ll incur one or two hiccups at some point along the way. To make you feel a little bit better about these bumps in the road, here are some of the biggest fails in project management history.

 

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1. Target’s entry into Canada

Who failed? 

Target Corporation, the second-largest discount retailer in the United States, behind Walmart. A company that is worth roughly 72.62 billion US dollars [March 2016].

What did they attempt to do? 

They attempted to enter the Canadian market. It made perfect sense at the time as many Canadians would cross the border and come down south to their United States neighbors to do their shopping. Coupled with the fact that the company was reaching maturity in the USA, Target felt it time to expand their operations.

In order to facilitate this market penetration, Target purchased 189 leases from Canadian retailer Zellers (a similar company to Target). Not only did this allow them to set up 189 new shops across Canada, but it cleared out one of their competitors in the process.

I know what you’re thinking: ‘two birds, one stone’. But what if one of those birds doesn’t fly quite as expected?

Why did they fail?

The Canadian market was waiting with bated breath for the introduction of Target to the Great White North. Excited for the far lower prices they were surely going to experience, and heavier pockets, there was quite a bit of hype around this market entry. But all was not as they thought.

Two issues severely hindered this project. Firstly, Target prices weren’t that much lower than other similar competitors throughout Canada. The Canadian public was not particularly drawn to the Target brand and as a result, continued their shopping in other supermarkets that were more familiar to them. Secondly, Target suffered supply-chain difficulties leaving them with empty shelves and frustrated customers.

The media hopped on board the already sinking Target ship and cut some extra holes to speed up the process. Scathing reviews that reflected the disappointment of the Canadian shoppers damaged the Target name even further.

Ultimately, a failure to live up to customer expectations, a lack of situational awareness and analysis, quality issues in relation to the supply chain and a lack of risk management caused this US megastore to completely miss the target on this project, losing 7 billion US dollars in the process.

 

2. NHS’ civilian IT project

Who failed? 

The National Health Service is the publicly funded healthcare system for England. It is the largest and the oldest single-payer healthcare system in the world.

What did they attempt to do? 

The NHS had great plans to create a unified electronic health records system for all British citizens. With an intention to serve 40,000 GPs and over 300 British hospitals, this project was going to be one of the world’s largest IT projects ever attempted.

If you’re familiar with the IT industry, you’ll be aware of the high failure rate of many of its projects. This project was the largest ever attempted so was bound to be risky and cause a number of issues.

It’s also worth noting that the NHS is a taxpayer-funded organization, making this project failure even more high-profile than Target’s market entry mishap.

Why did they fail?

The NHS bit off more than they could chew and started too big too quick. This project was astronomical in size and was always going to be difficult to finish out successfully.

Brian Randell, a member of the group of academics who became concerned about the project and co-authored a dossier outlining his and others concerns, said the following about the project:

The NHS’s huge NPFIT project, intended to serve 40,000 GPs and 300 plus hospitals, was claimed to be the world’s largest civil IT project. In fact, its ill-fated intended central core, a nation-wide Electronic Health Record (EHR) facility, dramatically illustrates one of the most serious causes of large IT Project failures. The system of systems that was to provide EHRs was initially designed by a large central team and intended as a complete “big-bang” replacement for the many and varied existing EHR systems. It would have been far better to employ evolutionary acquisition, i.e. to specify, implement, deploy and evaluate a sequence of ever more complete IT systems, in a process that was controlled by the stakeholders who were most directly involved, rather than by some distant central bureaucracy. Authority, as well as responsibility, should have been left from the outset with hospital and general practitioner trusts to acquire IT systems that suited their environments and priorities – subject to adherence to minimal interoperability constraints – and to use centralized services (e.g., for system support and back-up) as if and when they chose.

 

3. The Death Star

Who failed? 

The Death Star was the Empire’s (an army of sorts) ultimate weapon: a moon-sized space station with the ability to destroy an entire planet. It is, of course, a fictional weapon from the popular movie franchise, Star Wars. It was destroyed in the Battle of Yavin.

Star Wars is an American epic space opera franchise, centered on a film series created by George Lucas. It depicts the adventures of various characters “a long time ago in a galaxy far, far away”.

Even in fictional environments, projects can still fail!

What did they attempt to do? 

The Death Star was going to be the ultimate weapon. Capable of wiping out whole planets with a single blast of its super laser, it was the deadly destroyer that the Empire was going to use to control the galaxy.

Basically, this mother-ship was going to give the Empire control of anything and anyone they wished. By holding such a powerful weapon, they would have complete control and strike fear into their enemies.

Why did they fail?

This particular project failed for a number of reasons. The over-arching issue was the inability to plan for attacks on the ship. The project team was so focused on creating a weapon capable of destroying anything in its path, appropriate defensive measures were not put in place. Essentially, the Death Star had no risk management strategy put in place to mitigate against risks such as flying spaceships captained by Chewbacca and friends.

The cost of this failed project? Well, the White House (yes, the actual White House) estimated that the ship would cost 850,000,000,000,000,000 US dollars to build in today’s economy.

In conclusion, projects fail…all the time and sometimes with immense financial repercussions. So plan appropriately for your project and consider all possible elements that might impact it, be that an unresponsive target market, an inability to complete the work due to its large scale or a spaceship full of determined space wanderers with enough gumption to take on you, your army of men and the superweapon you built with the incredible amounts of cash stashed under your mattress!

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