Overflow: Why do Development Projects Fail so often on Deadlines and Budgets?
When we look around our industry and our clients' industries, we see many projects that fail due to schedule and budget overruns. Or where factors more time and money are grudgingly approved so that the other goals can be met.
And understand me correctly, we are not talking about overruns of 10 or 20%, we are talking about factors of two to ten, which can also call into question the profitability considerations for a product.
What are the Symptoms of Such Projects?
In retrospect, there are exactly two symptoms: the start of production is delayed and/or the budget is massively exceeded. Are there any indicators beforehand by which these projects can be recognized at an early stage?
- Watermelon reporting: The traffic lights in project reporting are all green, but unfortunately red on the inside. This means that every project participant knows better about the problems of the project than the management, than the boss.
- "It always takes three times as long": overruns by factors are so normal that planning is already including them.
- Chaotic agility: "We develop agile" misunderstood as "everybody does what he wants". It is not clear to the project team which concrete goals they should achieve for which milestones. Only the goals for the next sprint, for the next two weeks may be clear. Roles and responsibilities are blurred, important product decisions are not made and so replaced by the developers by mostly wrong assumptions.
- "Draft": this is the state of all documents and artifacts, including basic requirements well beyond the project start. Much is still "nice-to-have" or optional at the end of the project.
- Estimates and risk lists are still those from the project start, if they exist at all. And most importantly, there are no actions based on changes to estimates and risks, only short-term responses to the most pressing issues at the moment.
And if all projects in an organization show these symptoms? Then brace yourself for the
Excuses for Time and Budget Overruns
- Changes: Actually, everything should have been said about this in the age of agile development. "Embrace change" means that the project is set up to handle a certain amount of change.
- Technology issues: These happen all the time, and they can really bring down a project. Most of them can be dealt with through good risk management. And: if you have technical problems, solve the human problems...
What are the Causes? And the Corresponding Solutions?
As an engineering firm, we also have fallen into these traps, and we too sometimes exceed the effort by a few percent. As a service provider who often offers projects at a fixed price, we had to adapt our way of working to never overshoot by more than a few percent, because a larger overshoot would break our back financially. We have compiled here the most important solutions we have found.
Disclaimer: these solutions are often very painful and therefore not suitable for everyone! This is also the reason why they are not implemented everywhere.