The Top Ten Reasons Projects Fail (Part 9)
Frank Winters has more than 30 years of consulting and Information Technology experience serving as a project/program manager, consultant and IT service industry executive.
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Topics: Estimating
This entry in the failure series is a follow-up to Part 8 regarding estimation. The topic deserves more thought and discussion, and I've had several comments regarding Part 8, so here's some more about estimation.
What is an appropriate confidence level?
Many believe that estimates with high confidence levels--I recommend striving for 95 percent -- are much more costly than those with lower confidence levels. So much more so that it just doesn't pay to routinely strive for 95 percent confidence.
A reviewer of part 8 likes to try for 80 percent. He feels that if estimates are consistently at 80 percent, a team should expect to miss the targets one time in five--a much better than average success rate, he said. Using the same logic and arithmetic, a 95 percent confidence level implies one miss in 20--a truly excellent success rate.
A natural question to ask is: Can we accept a goal of one miss--one project failure in five? I believe to answer this question you need to understand that if a team strives for an 80 percent success rate they will typically achieve something less. For example, let's say the team achieves an 80 percent confidence level 90 percent of the time. This performance will yield an actual confidence level on average of 72 percent. That's about one miss in four projects. To me that's too many misses over time. And of course the success rate of 90 …
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