CHAPTER TWO: PROJECT MANAGEMENT PRINCIPLES
2.2 THE CAUSES OF PROJECT FAILURES RELATED TO MANAGEMENT ISSUES
Frigenti and Comninos (2002:326) state that the main reasons for a project’s failure include poor project definition, inadequate scheduling and resource allocation, lack of general information and losing control of the project. The lack of integration of risk management in the overall management of an organization and in the projected life cycle, as well as ineffective management and leadership contribute to the failure of a project. This section focuses specifically on project failures associated with the internal environment of the project management.
2.2.1 Problems of planning: project definition, scheduling and resource allocation
Some projects fail in their early stages because they are not well defined. Quoting Kerzner (1994), Frimpong (2003:80) found some typical reasons that explain the failure of plans. They include the following; The project goals are not known at the lower levels of the project team.
Financial estimates are poor with too much work to be done in too little time. Plans rely on inadequate data and planning is done in a rush. The information on ultimate objectives, staff requirements, schedules and reporting, etc., is poor. Keeling (2000:61) found that poor organizational structure, lack of feasibility study, inadequate planning, poor human relations and ineffective control are symptoms of managerial inaptitude and are common in projects all over the world.
As Peter (2006) points out, the roles played by internal and external stakeholders in a project as well as their assignments, are often not clearly defined at the beginning of the project. Project Management Centre (2004) and Bolles and Hubbard (2007:162) emphasize that activities and tasks to be carried out are not adequately scheduled. As a result, costs and necessary resources, such as time and personnel, are not objectively determined. Supporting this idea, the United Nations Centre for Human Settlements (2003) found that at the beginning stage of a project, the consultation between implementers and local people is often non-existing so that there can be no understanding of the real local needs and the project will almost certainly fail.
The project’s success depends on the specification and allocation of resources such as money, materials and human resources. Project Management Centre (2004) holds that in some cases, within or outside of a project, resources are not respected and properly committed by the project team. This causes delays in the implementation. For instance, in Ghana, recent findings from a study undertaken by Frimpong, Oluwoye and Crawford (2003) into the construction of groundwater projects indicated that delay problems resulted in arbitration, disputes and even total abandonment of a project with the resulting lawsuits, extra costs and loss of time. Aibinu and Jagboro (2002) observe that the main causes of delays included poor contract management, problems of funding, late payment for completed works, shortages in materials and changes in site condition.
Client-related delays comprised cash flow problems, slow decision-making and variation in orders. Contractor-related delays involved material management problems, financial difficulties, inadequate site inspection, planning and scheduling problems, shortage of manpower and problems of equipment management. Extraneous causes of delays included labour disputes, strikes and inclement weather (Aibinu and Jagboro, 2002; Frimpong, Oluwoye and Crawford, 2003).
As Frimpong (2003:112) states, time management is critical to the project’s environment. Unlike other resources, time cannot be purchased but it can be budgeted for, as money is. He found that, as the project staff are usually busy with numerous meetings, conflict resolution, report writing, communication with customers, continuous planning and re-planning, they often fail to manage their time properly in order to cope with a changing environment.
In Saudi Arabia, a survey of delays in public utility projects has been conducted. The findings reveal that the main causes of delays involve lack of resources, low productivity, conflicts related to contractual agreements and poor communication between consultants, owners and contractors (Ghafly, 1999 quoted in Keeling, 2000:60).
This experience shows that the phase of the project’s planning should be the concern of all key stakeholders involved in the project. The failure to adequately involve them at the beginning can lead to unsuccessful projects because the areas of project management involving project integration, management of time, quality, cost, human resources, procurement, communication and risk, have not been objectively taken into consideration during the process of planning. This failure has a negative impact on the next stages of the project (execution, control and termination). During the phase of implementation, problems such as budget overruns, delays, defective product or service, poor relations among the project stakeholders, lack of resources and inadequate communication appear. This situation does not help to prepare for the closing down phase of the project and can lead to its premature termination.
2.2.2 Inadequacy of information and communication
According to Diallo and Thuillier (2005), cooperation and communication between stakeholders are some of the key factors strongly linked to project success. However, communication facilities and the flow of information in developing countries are not satisfactory. The Project Management Centre (2004) found that successful project management involved identifying those stakeholders’ needs that are covered throughout the project’s life-cycle. But in some cases, project team members did not fully understand that they were responsible for gathering and supplying information and communicating with stakeholders. Information on the key aspects of the project was judged very important because lack of information causes misunderstandings that make the project implementation very difficult. Information gathered by documenting the project’s implementation and lessons learned, helps to improve the performance of the project and of the whole organization, as well as promoting the success of ongoing and future projects.
However, it has been observed that a number of projects did not have an adequate information management system. Project Management Centre (2004) confirms the lack of information management systems in the early stages of projects and throughout their life-cycle. A compilation of information is useful as well in the closing down phase of the project. New projects often ignore experience and information from previous projects which could be helpful
in careful project planning, and especially in the scheduling of activities and the estimating of costs.
Lubbers (2000) puts a strong emphasis on the use of information technology facilities such as the Internet in a world that belongs to the information age. Brynjolfsson, Hu and Smith (2003) found that the internet facilitates free movement of many new products and services from distant lands and make them accessible. According to Lubbers (2000), many people in developing countries believe that the internet is an opportunity for access to knowledge and services from all over the world. However, as Castells (1999) states, the transition from the industrial age to the information age is not an easy one. The information age requires that society be educated and able to understand and use complex information. However, he found a lack of education on information technology from primary school to university, that is, throughout the whole educational system.
It is obvious that information and communication technology (ICT) is a leading factor in the context of rapid educational, social, and economic advancement in developing countries.
However, in such countries, highly skilled human resources in ICT and infrastructures such as electricity supply are still insufficient to take advantage of the ICT benefits.
2.2.3 Losing control of project
In developing countries, some projects fail because of a lack of control. It is expected that changes in terms of project scope, schedule, budgets and quality could occur during the project implementation. However, in many cases, the project management fails to control these changes carefully and systematically. Project control is helpful too for using resources efficiently (Management Centre, 2004) and for measuring the project’s progress so that corrective action can be undertaken when there is still time (Burke, 2001:191). If there is no such control, the project manager becomes incapable of taking corrective actions because he waits for the project’s completion (Burke, 2001:191). In this regard, The Management Centre (2004) found that project agreements are not executed as expected, and this problem often leads to unnecessary delays in decision-making.
2.2.4 The lack of integration of risk management in management systems
It is a mistake to assume that normal working conditions and practices will prevail throughout a project’s life-cycle (Burke, 2001:83). In actuality, most decisions, including those about investments, are made in uncertain environments (Blandón, 2001). Projects are subject to environmental uncertainties mainly because of external factors and poorly defined projects.
Uncertainty comes from the lack of clarity with regard to the project goals and the means to attain these (Alderman et al., 2005). This affects project management processes throughout the life cycle (Jaafari, 2001), particularly the planning and control of activities, resources and costs.
However, some project managers pay little attention to this critical issue, whereas the process of risk and uncertainty management, if pursued on a holistic and continuous basis (Jaafari, 2001), is very helpful in adapting a project to its real environment (Project Management Centre, 2004).
That is why Wyk et al. (2008) suggest that reducing uncertainties by applying risk management is very important, especially for construction, engineering and technology projects. Atkinson et al. (2006) and Burke (2001:83) strongly support this idea, suggesting the availability of allowances, used to cover defective work. Defective work is due to the underestimation of the work’s content due to a lack of definition of scope, a limited supply of local skilled labour, and the costs of reworking and replacing, which are caused by a lack of materials, underestimation of bills of materials or the failure of a component. Defective work also results from labour and equipment staying idle because of import delays and bad weather, and from lost production because of strikes. Scope change, lack of experience, some unforeseen regulations and unexpected procurement price changes contribute to defective work, which causes unnecessary costs, delays in project activities and lengthening of the overall project duration.
Risk management should involve all key stakeholders throughout the project life cycle because they contribute different knowledge, skills, experience, interests and expectations, which are all sources of the project’s complexity, uncertainties and risks they will usually change along with environmental changes. If risks are not well understood, analyzed and integrated in the project planning, they will create serious problems during its implementation and termination. It is not enough to have allowances available to solve problems of rework caused by the abovementioned factors. An effective strategy should entail the prevention of problems through building strong partnership relationships among stakeholders, and getting skilled and motivated people who are committed to do the right job in the right way the first time they are faced with it.
2.2.5 Project Life cycle
Project failure can be assessed throughout the project life cycle. Keeling (2000:59-62) indicates that causes of project failures are found in all the phases of its life cycle. In the concept phase, project failure is attributed to sponsors and owners who do not devote enough resources and time to a proper study of the project’s feasibility. This often results in unclear terms of reference and inadequate research and risk assessment as part of a feasibility study. A lack of close cooperation with key stakeholders hinders the project or prevents its progress. An adequate structure and feasibility provide an essential basis for normal progress. Management failure in the project’s conceptualization phase poses serious problems. It is very difficult for a badly structured or not quite feasible project to survive unless omissions and errors are rectified in its early stages. In the planning phase, owners, advisors and sponsors are held responsible for the project’s failure due to inadequate management structure, poorly defined objectives, inadequate planning of capability and lack of activity planning. The lack of risks analysis and contingency plans, poor contract negotiation, ineffective resource planning, inadequate provisioning of finance, poor budgeting and poor cash flow forecasts are also classified among major factors leading to project failure (Keeling, 2000:61).
In the phase of implementation, the responsibility for the failure of a project is attributed to sponsors, manager and team leader. The problem is due to inappropriate styles of leadership, poor selection of team managers and leaders, late delivery of essential equipment and materials and poor resource provisioning. Moreover, inattention to training and team development needs, inadequate control and monitoring by team leaders and managers, poor activity coordination and cooperation, and poor communication of reporting procedures are referred to as key factors causing a project to fail (Keeling, 200:61-62).
In the project’s closing down phase, those responsible for the project’s failure are senior project personnel who do not complete the project activities on time or reach the required quality standards. Inadequate arrangements for the closeout phase, the lack of project sustainability and inappropriate project evaluation and follow-up, also constitute major reasons for a project to fail (Keeling, 2000:62).
The sustainability of a project needs to be considered from the start with the gathering of relevant information on the environment and on project stakeholders, their needs, interests and expectations. Putting together these elements and matching them with general and specific objectives, activities and resources of the project in the planning processes can lead towards positive outcomes during the implementation phase. But in order for this to happen all stakeholders involved in the project need to work together as a team in an atmosphere of cooperation, from the beginning to the end of the project.
2.2.6 Ineffective management and leadership
In Saudi Arabia, surveys of project failures have been conducted and the findings show that factors causing project failure include the difficulty to acquire work, a low profit margin, problems with cash flow, and the lack of experience in project management and in the firm’s line of work (Jannadi, 1997 quoted in Keeling, 2000:60). Regarding leadership, (Frimpong, 2003:211) indicates that ineffective leaders were the cause of project failures. They were over-dependent on a mentor or superior. They were harsh and insensitive to others and intimidated them. As a result, they failed to cope with specific problems of performance which they would not admit to, or shift the blame for, or cover up. They pushed too hard to get ahead (over-ambitiousness) but they were unable to select and develop useful staff and think strategically. They were also unable to adapt to a superior with a different leadership style.
Inadequate leadership can lead to project failure. But other factors also need to be considered.
For example, employees may be not ready or willing to cooperate with a leader even though he is a good one. Or employees may not want to take responsibility because of a lack of skills, or they are strongly preoccupied with other things such as personal and family problems or political issues.