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22nd Aug 2022
When we studied project management in the early 1990s, project success was usually defined as ‘producing the agreed deliverables under budget and within schedule’. These criteria have remained as the most common measures of success in industries where changes to objectives during the project lifetime are uncommon. This fit is not as clear for long lasting projects, during which the business requirements may change, or for programs, where the objectives are initially stated in a generic manner and acquire form as time goes by, as uncertainties are resolved.
Is timely delivery important? Is delivery within budget the ultimate objective? Perhaps those parameters are important to a company which must meet contractual requirements, but they would not matter as much to a stakeholder who realises that the business objectives have changed, and therefore that the project will not deliver a useful outcome.
It could then be argued that project success depends on the stakeholders’ perspective. An external supplier needing to realise a profit may still see success in the traditional scope, time, cost form, while an internal supplier may additionally consider ease of maintenance and customer satisfaction. Conversely, a business sponsor will be more interested in achieving the business objectives (contribution to strategic goals, problem resolution, or opportunity realised) with somewhat less regard for time and cost, and little regard for the project deliverables created.
The business objectives are also called benefits – the ultimate reason for a project’s existence. Project deliverables are connected to benefits through a value chain in which project outputs are used to generate outcomes, which in turn enable the recipient to realise the proposed benefits. The links in this value chain can be defined as:
Projects and programs must be started with the benefits in mind and success should be stated in terms of benefits realisation.
Why beforehand you say? Defining success based on past events or knowledge can result in misguided investment that keeps people busy but does not contribute to organisational objectives. This approach is comparable to the legendary sharpshooter who fires randomly at a shed wall and then paints the targets around the bullet holes, creating the false impression of being an excellent gunman. The sharpshooter paradigm symbolises the dangers of adopting evidence-based targets to justify investments of questionable results.
A disguised form of the sharpshooter concept occurs when time pressures arises, and work starts on ‘no-regrets activities’ while the business case is finished. In over 30 years in project management, we have witnessed ‘no-regrets activities’ as being the most regretful of them all – delaying definition of business objectives and often locking the scope onto what some stakeholders want done, rather than what the organisation requires.
Benefits must not be defined as outputs or outcomes, which often results from viewing the project with a technical lens. Having access to a new fleet management system is not a real benefit and leads to a late search for justification. This always brings memories of Dennis Denuto’s famous closing argument in the film The Castle, “… it’s the constitution, it’s Mabo, it’s justice, it’s law, it’s the vibe and… no that’s it, it’s the vibe”. No project should be justified on ‘the vibe’.
Defining the benefit also implies establishing the way in which the benefit’s realisation will be measured. In our fleet management example, the project should promise a quantifiable benefit (the cost reduction in asset-related expenditure) to be achieved within a specified timeframe. Agreement on measures that directly reflect the benefit claimed provides an objective mechanism to prove that project success has been reached.
From a supplier’s perspective, projects provide input to another organisation that in turn harvests the benefits. In this case, success can be defined as a function of the customer’s benefit (e.g., customer profitability or other customer goals achieved, such as improved environmental management) by delivering outputs to the customer’s satisfaction within budget, and accepting the customer’s feedback of satisfaction with the outputs provided.
Measuring project success does not need to be complex or costly. It does though require thinking at commencement time to agree on the goals sought from undertaking the project. The biggest challenge is to ensure that the benefits are defined in terms of business objectives, and that the measures agreed are directly related to the benefit claimed.
In our example, a direct measure of the reduced costs underpinned by improved fleet management practices could be a financial report comparing breakdown maintenance costs prior to the new system being implemented, with similar reports taken a couple of years after the system’s implementation. The commissioning of the system itself does not constitute a measure of project success, as the actual system does not guarantee cost reductions.
Finally, we should emphasise that the project sponsor is accountable for project success and therefore for ensuring the early definition of benefits and measures, although the project manager must carry out this definition as directed by the sponsor. Yes, it all comes back to the project manager to have more than ‘the vibe’ to prove the project’s success when questions are asked.
If you liked this article, you can see more by reading the latest edition of the Australian Institute of Project Management’s digital magazine. Please note that past editions are member exclusive.
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