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Project Abandonment vs. Recovery: The Cost Benefit Analysis

Bob Dido

A McKinsey & Company and University of Oxford study of 4500 large-scale (budgets exceeding $15 million) IT projects found that these projects ran 45 percent over-budget and 7 percent overtime, delivering 56 percent less value than anticipated. That is a whole lot less than these organizations were banking on! Many opt to pull the plug on projects (IT or otherwise) that are not going to deliver sufficient value in exchange for the investment of time and resources. What factors play into the decision to either recover an at-risk project or abandon it? How do you know when to hold ‘em and know when to fold ‘em?

Abandon Ship: When Is a Project Beyond Recovery?

Bob Dido

Remember the “Billion Dollar Government Boondoggle”? In the late 1990s, the Canadian government contracted out the immense task to create a national electronic firearms registry. The project was going to cost $119 million, $117 million of which was to be offset by registration fees and licenses. $1 billion later… The project ran into virtually every problem that it possibly could, from politics, to 1000 change orders in the first two years, to figuring out how to get it to integrate with computer systems in 50 different agencies. Poorly defined from the start, this project only got worse, more expensive, and more absurd. When faced with their own ‘Titanics’, when do organizations and agencies say, “Enough is enough?” and simply abandon ship?

Tell-Tale Signs A Project Is Heading For Disaster

Bob Dido

It starts with a project manager, huddled in a corner, weeping. Just kidding. Project managers are hardy sorts and will not break down at the office.

Projects, particularly complex, large-scale projects, face a number of challenges, and it is the rare one that does not stumble at some point under the weight of them. There are many, though, where stumbling turns into a free fall. It is critical that leaders read the warning signs of impending trouble so they can reverse course.

What Defines an Unsuccessful Project?

Bob Dido

It seems like an easy enough question to answer. Projects are unsuccessful when they don’t work, when they don’t produce the outcome that was desired. Perhaps they are deemed unsuccessful if they are behind schedule and over-budget. But a project’s success, or lack thereof, cannot be measured by a calendar or calculator alone. You can deliver on time and on budget and still not be successful.

The Risks of Lackadaisical Risk Management

Bob Dido

The thing about grocery shopping, exercising, laundry, cleaning, or risk management is that you’re never done. You never get to a point where you say, “Well, I did it. I finished shopping for ever. Glad that’s done!” Managing risk in business is an iterative process. Think of it as your albatross, or, if you are an optimist and would like to stay in business, your chance to minimize threat and maximize opportunity.

Accenture’s 2009 Global Risk Management Study highlighted some deficiencies in how businesses approach risk management. It should be noted, though, that the research also revealed a strong interest in and motivation to improve in this critical area.

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