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In the first part of his article on the benefits of using Critical Chain Project Management (CCPM) techniques, Satyashri Mohanty, founding director, Vector Consulting Group, the largest TOC (theory of constraints) consulting company in India and South East Asia analyses why large construction projects are seldom delivered ahead of time and within budget.
Large construction and erection projects seem to have a dubious record - most of them are delayed with significant cost overruns. The problem of delayed projects is well documented in statistics released by various government agencies, not only in India but also in countries like the US and Japan.
While statistics in the public domain are mostly that of work executed by government agencies, the story in private sector is equally bad. At Vector, we have come across many organisations which have a perfect record – never have they delivered a large capital project on the initially committed due date with full scope and within budget.
The ones which claim to be on time do so mostly on revised due dates. It’s not that all projects are delayed.
However a highly successful project, delivered ahead of time while being within budget is such a rare event that it usually ends up as a newspaper item.
“We-should-have-planned-better” syndrome
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The analysis of delayed projects points to numerous uncertainties. Most project managers will point to issues like:
Can we improve the situation?
For answers, let us look at the existing body of knowledge of project management. It talks about implementing numerous tools, templates and processes in areas of integration management, scope management, time, cost, quality, human resource, risk, communication and procurement management to solve the problem.
Interestingly enough most of the processes are in the domain of planning. So if we plan better, we can deliver better. Or in other words, the better we are in envisaging the future the better will be the reality.
But reality is cruel – however good the plans may be, uncertainties spoil the show. It is no wonder then that despite the widely held belief (great planning leads to great delivery) in many environments the plans are not even made or made just to show it to outside agencies.
The initial plans, made with enthusiasm, of starting the project go haywire within no time. The rest is managed based on perception of urgency of the day in the mind of the project manager. But how do we know that the cause ‘improper planning’ leads to the effect of ‘delayed projects’?
If improper planning is the reason behind project delays, why don’t managers plan better using all the established processes and tools of planning to solve the problem? I would assume that after one failed project, managers would follow all the established guidelines and planning processes and we should have a much better record of project performance. But despite the many developments in the area of project management a project delivered ahead of time and within budget and full scope is rare.
Every project starts with a plan which goes haywire when uncertainty hits the project. We all turn wise in hindsight. But then we cannot go back in time.
Are there better, simpler and practical ways to solve this seemingly complex problem? Is there an inherent simplicity hidden in the complexity of managing a large project involving many stake holders?
The opportunity in projects – Controllable Wastages
The lead time of projects can be classified into value-added touch time on the longest path, interruptions (or waiting time) and lastly rework. Even though most managers point to “out of locus of control” reasons for project failure, an analysis of time at the end of a project will point out that the touch time is only 20-30% of the lead time.
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