Enterprise PPM: The blog site for PPM practitioners and stakeholders across the enterprise

4 Warning Signs Your Project is Failing #pmo

By Guest Blogger - Brad Egeland

In a previous post I suggested “Four Tried & True Best Practices for Avoiding Project Management Failures” (October 31, 2012). Here I discuss warning signs that, despite your best laid plans to avoid failure, failure may be upon you. Don’t be overly alarmed. More projects fail than succeed.  That’s just a fact.  And I’m not talking about utter failure.  Projects can fail to varying degrees. 

On one end of the spectrum you have the outright cancellations due to extreme project issues like program bugs that can’t be resolved, runaway budgets that exhaust funding, customers who can’t agree on requirements. The reasons can be endless.  On the other end, you have the subtleties that leave the project sponsor or some (or all) of the project stakeholders considering the project a failure due to less catastrophic reasons like not meeting fully all end user needs, not solving completely the original customer issue, problem or need, a one month overrun of the project timeline, or a 15% overrun of the project budget.  All of these smaller issues can be resolved with a little more time, money, resources, or well-placed change order.  Yet someone on the project that has important connections may have deemed it at least a partial failure, so it wasn’t exactly a success.

What I want to consider here are four potential project failure warning signs and how we might recognize those and react to those – hopefully early enough to take corrective action and turn things around.

1. The budget overrun surpasses the 10% mark

It’s never a great thing to experience a budget overrun.  And always I have considered anything approximately 10% over budget or less to be in the acceptable range.  Beyond that, many will consider it a failure point.  That’s why I always analyze and reforecast the project budget on a weekly basis.  A 10% overrun is way easier to correct than a 50% overrun – which is what you’ll find yourself with if you don’t manage the budget carefully and regularly.  And if you make sure that your project team is aware that you’re watching the budget carefully, they are less likely to charge their time to it carelessly. This makes it even easier to keep the budget healthy over a long-term project.

2. Issues are being added faster than they are resolved 

I took over a project that was in extreme break/fix mode.  I inherited an Excel spreadsheet of issues that was six pages long – and it quickly grew to seven pages and then eight pages and beyond.  For every issue we resolved, two new ones were added to the list.  It was a nightmare.  I sent top-level resources to the customer site twice to work through issues and it added very little value, mainly because we were still trying to move forward on the project while trying to resolve the issues at the same time.  Only when we halted the project, stepped back and planned with the customer how were going to first take care of the issues and then move forward with the rest of the project, were we able to make progress on issue resolution.  It’s almost never a popular solution to cause a work stoppage, but sometimes it’s the only solution and in this particular case it worked.

3. The customer Contacts Your CEO

If the customer has decided to contact your CEO about issues on your project, then you’re likely not going to be around long as the PM.  I did have that happen once on one of my projects and thankfully I lasted for the entire project, but holding conference calls with the customer while just the CEO and I are sitting in his office is not a comforting thing – nor is having the CEO send me and my delivery team to the customer site for two weeks over Christmas. However, it did help us get around the issues we were facing and four months later we deployed a successful project for the project customer.

4. Project Invoices are Unpaid

Unpaid project invoices can be a slight oversight on the part of the customer or it can be a sign that they aren’t happy.  On one project I had several outstanding customer invoices for early phase deliverables.  My VP asked me to follow-up with the customer. Thankfully, it was just an oversight and the project sponsor was glad I brought it to his attention because he was unaware of the situation.  But earlier on in my PM career I worked on government contracts and when bills weren’t paid sometimes it was red tape and sometimes it was a satisfaction issue.  It’s important to stay on top of outstanding issues like this, follow-up carefully with the project client and ask questions to see if there are any other underlying reasons as to why they aren’t paying.  If it is a satisfaction issue, find out what’s gone wrong or what’s frustrating the project client.  Ideally you have official signoff on all deliverables on all of your projects which should mean prompt payment.  But satisfaction can still be an issue. Don’t let these linger or you might find yourself with a project that is put on hold or canceled.

Summary

These are just four warning signs that I’ve experienced.  There are likely dozens more that potential warning signs – many of which I’m sure our readers have experienced.  Please feel free to share your own thoughts and experiences and ways you’ve tried to respond to these warning signs.

* * *

Brad Egeland is a Business Solution Designer and IT/PM consultant and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT. Brad is married, a father of 9, and living in sunny Las Vegas, NV. Visit Brad's site at http://www.bradegeland.com/.