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Following the AIPM National Conference held in Sydney this week, our Managing Director Matt reflects on the state of the Project Management profession.

 

 

The 2018 Australian Institute of Project Management (AIPM) held the National Conference in Sydney this week. There were many great thought provoking presentations from our industry leading practitioners but it was the first key note speakers of day two that caught my attention.

"State of Play: The Australian project management industry" was the topic presented by KPMG's Peter Sexton and the AIPM's own Michael Young. From a recent survey of 7,000 participants the current statistics surrounding project delivery were discussed. Whilst KPMG are going to release the full report and data on international project management day (1st November) the summary findings were alarming to say the least.

Of the participants surveyed:

  • 30% of projects were achieved on-time
  • 32% of projects were delivered on-budget
  • 45% of projects could boast a high stakeholder satisfaction and
  • 47% of projects produced deliverables that met the original business goals

Overall a measely 23% of organisations were able to continuously deliver successful projects.

Once the conference attendees, like myself, had picked their jaws up off the floor approximately 600 smart phones went up in the air to take a photo of the slide deck. We were all in shock. From KPMG's research we will need some 87 million project managers by 2027 to support the delivery of projects in a growing economy and alarmingly we will only manage to find 1% of those people.

Projects will, in the future, continue to fail and the failure rate it seems is due largely to the level of competency and governance within projects.

But it was the ongoing sessions conducted by industry leaders that provided some insight into why projects continue to fail.

 

The PMO Isn't Helping - Governance is Missing

Of those surveyed only 49% of the organisations researched had an established PMO and from general sentiment the PMO (as a concept) was failing to work.

There was a distinct lack of governance for major projects and it was noted that project sponsors themselves were unable to, in most cases, obtain the necessary support they required to facilitate governance and decision making.

There was a clear indication that the project management profession is suffering from a lack of competency given that the survey showed project managers were:

  • unable to adequately lead change management
  • lacked necessary conflict negotiation skills
  • unable to clearly communicate to teams and stakeholders and
  • lacked skills in dealing with confrontation

I reflected on these sentiments further over the course of day two and couldn't help but draw parallels to what we've experienced over the past few years in support of major projects.

 

Why Major Projects Fail - From our Perspective

In the majority of major projects which fail, the consortium or joint venture formed to deliver them are not adequately governed by a PMO. The majority of failed projects in these situations experience the same four "soft skill" issues noted previously. The contracts between parties are often complex and for project managers lacking the necessary contract, communication and conflict resolution skills, maintaining order can be a challenge.

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There is much to be said for the amount of influence the PMO can have on the joint venture delivery team as well. Whilst planning, scheduling and contract guidelines can be established, they are often ignored at the contractor's level. As an example, over many years of providing delay claims advice on major projects we've noticed an on-going trend by contractors where they fail to follow the contract process in claim preparation and submission, often resulting in being time-barred. 

A contract may clearly outline the required steps to take in preparing a claim most contractors fail to follow the contractual steps often reverting to 'gentlemens agreements' or ignoring them altogether.

Whilst a PMO can establish clear scheduling and reporting guidelines (for example) the majority of contract forms do not penalise the contractor for failing to follow procedure or providing project deliverables in certain formats. Thus, the majority of contractors do not necessarily need to follow the established protocols of the client.

The competency of the project teams themselves comes into play here as well. Good project managers actually follow the requirements setout in the contract to avoid getting into dispute in the first place.

 

Frameworks and Soft Skills

The definiton of insanity, as Albert Einstein once put it, "...is doing the same thing over and over again and expecting a different result". And this was further emphasised in the presentation by Endeavour Programme's David Porter and Cuong Quang on the topic of artificial intelligence (AI) in project management.

The Project Management world has numerous frameworks for delivery and there is constant reinforcement from accredited training organisations of the essential "Soft Skills" a good project manager should have.

If we have so many frameworks and methodologies they clearly are not working.

When you examine the amount of education and training provided for these facets of project management and look at the fact that the industry lacks competency in delivery, why then do we keep doing the same training and education over and over again?

For a nerdy computer scientist such as myself, programming and artificial intelligence is an interesting topic. The idea that a large database of information with numerous parameters could help a machine "learn" is an exciting concept. But AI and project databases are not a new thing - lessons learned databases, project review logs and post implementation review data is readily available in most organisations.

We either aren't reviewing the information enough or we have so much project team turnover that the knowledge transfer keeps getting lost.

 

Performance Auditing and Lessons Learned

A good project manager can harness the power of lessons learned as a new project commences. Lessons learned and previous performance audits are an integral part of project initiation to enable the project to plan appropriately. If we think about the use of AI, databases and audits, we should be minimising our project failure rates.

But we're not. So why?

The presentation "can performance audit data influence the success of small and medium sized government projects" by Richard Hughes shed some further light on why.

From research currently being conducted it seems that those who undertake project management research rarely review past project performance reporting and audits. Thus a database of lessons learned and knowledge from past projects are not reaching those new upcoming PM's who are being educated for the future.

 

The Swiss Cheese Effect of Failure

I sat back in my hotel room and contemplated the discussions had over the course of the convention. From all the research and evidence available it seems that we are not harnessing the power of past project data to improve our education processes. We have all the software we need at our fingure tips yet as an industry we lack the ability to properly educate project management professionals based on historical outcomes.

Whilst KPMG's summary presentation talked to the requirement to measure benefits it doesnt solve the root cause of our problems - training and upskilling. This, from our experience has been an observation made ever since we started business in 1986.

Competent and empowered project teams, once formed, can adequately manage the key project processes during delivery. But what then?

Suppose we mapped the key issues across a typical swiss cheese model:

swiss cheese2

By managing a project using trained and competent professionals the opportunity for scope creep within a typical design and construct contract is minimised.

Larger design and construct contracts are often tasked to deliver upon tight time-frames which inevitablly means a large overlap between design and construction. That is, construction works commence on site before design of the whole of the works is substantially complete.

When this happens the program of works is riddled with uncertainty as the majority of design is not yet completed. This means that estimates of future cost and duration are yet to be quantified accurately. If "time is money" then its likely that better time/schedule management will assist in managing budget.

 

In Summary...

This year's conference has promoted thought, debate and brought further recognition to the issues facing major projects in the current economy. Its exciting to think of the amount of work infront of the Australian economy and we need to quickly start improving the manner in which we train project management practitioners.

We need to be mindful of lessons learned and get access to similar project data sets as early as we can and understand the mechanics of complex contracts if we have any hope of improving the status quo.

 

By Matt Betros