Do you have the capability to identify the projects that pose the greatest risks of delay, budget overruns, missed market opportunities or, sometimes, irreparable damage to the company and careers, before it’s too late?
On big projects, the gap between projected benefits and actual performance can be significant. Schedules are missed by an average of 55 percent and budgets by 33 percent.
For instance, wide scale failures on big projects in recent years have left permanent scares on the State of California, including MyCalPAYS and the California Case Management System.
MyCalPAYS
In 2004, the State Controller’s Office (SCO) proposed the 21st Century (TFC) Project (the $371 million failed payroll project also known as MyCalPAYS system), the information technology (IT) effort to replace the existing statewide human resources management and payroll systems used to pay roughly 260,000 state employees. The new system was intended to allow the state to improve management processes such as payroll, benefits administration, and timekeeping. In February 2013, after the project experienced various problems during the pilot stage, SCO terminated the contract with the vendor and the project was suspended.
At the end, the project had nearly tripled in cost and was years behind schedule.
California Case Management System
Despite spending $500 million on the California Case Management System (CCMS), court officials terminated the project and allocated $8.6 million to determine whether they can salvage anything. In 2004, planners expected the system to cost $260 million; today, the price tag would be $2 billion if the project runs to completion.
Although the project seemed promising, the initiative has been plagued by poor management and lousy planning. A 2011 state audit[1] highlighted the following issues: “Our review of the Administrative Office of the Courts’ (AOC) oversight of the development of the statewide case management project revealed that the AOC:”
– Inadequately planned for the statewide case management project and did not analyze whether the project would be a cost-beneficial solution to the superior courts’ needs.
– Was unable to provide contemporaneous analysis and documentation supporting key decisions on the project’s scope and direction.
– Did not structure the development vendor’s contract to adequately control cost and scope – over the course of seven years, the AOC entered into 102 amendments and increased the cost from $33 million to $310 million.
– Failed to develop accurate cost estimates – in 2004 the cost estimate was $260 million and by 2010 the estimated cost was $1.9 billion.
– Has not obtained the funding needed for statewide deployment and without full deployment to the 58 superior courts, the value of the project is diminished.
The multi-billion project, started in 2001, was intended to automate California court operations with a common system across the state and replace 70 different legacy systems. Although benefits from the planned system seem clear, court leadership decided it could no longer afford the cost of completing the system.
40 to 60 percent of Projects Fail
Unfortunately, the stories of many large, complex projects are similar. The typical Fortune 500 company, for example, spends nearly 6 percent of revenue on capital projects[2], 40 to 60 percent of which fail to meet their schedules, budgets or both[3].
Organizations can significantly improve the overall ROI of their project portfolio and reduce the risk of project failures if they recognize challenges early and respond in time.
Empower2adapt (E2a) provides an evidenced-based approach to avoid wide-scale failure on large projects. Making use of big data analytics, our cloud-based tools provide actionable intelligence to align people (skills & performance) with business process and infrastructure to optimize outcomes. Without our tools, the value of lost productivity and inability to manage outcomes can add significant risk to your project.
IT Vendors & Change Management Consultants
Empower2adapt offers IT vendors and organizational change management consultants real-time visibility into projects to mitigate the risk of wide-scale failure. With actionable insight into projects on an ongoing basis, IT vendors and consultants can better serve their clients by delivering projected benefits on time and on budget. With our tools, IT vendors and consultants can extend their engagements with clients – reducing their customer acquisition costs and extending customer lifetime value, while greatly improving client outcomes.
If you want to improve your performance, quality and outcomes on big projects, contact Empower2adapt (E2a) today. E2a can help you solve your most complex challenges on big projects.
[1] Ref: http://www.bsa.ca.gov/pdfs/reports/2010-102.pdf
[2] Ref: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/capex.html
[3] Ref: http://www.aits.org/Articles/tabid/1450/ArticleId/9709/Chaos-Manifesto-Think-Big-Act-Small.aspx
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