Top Conditions for Project Success: Budget Focus

 

The APM have recently produced a research paper about what makes projects successful, called The Conditions for Project Success.

The 12 factors that “provide a framework for project success” are not likely to be things that come as a surprise:

1. Effective governance
2. Goals and objectives
3. Commitment to project success
4. Capable sponsors
5. Secure funding
6. Project planning and review
7. Supportive organisations
8. End users and operators
9. Competent project teams
10. Aligned supply chain
11. Proven methods and tools
12. Appropriate standards

The bit that is most interesting in the context of this blog is how those factors map to successfully delivering on your project budget.

What makes for a successful project budget?

The research report looks at how strongly each of these success factors map to common measures of success such as time, quality, stakeholder satisfaction and then a general measure of success across the board. The budget one relates to “delivery to budget” so I take from that whether or not the project was completed without exceeding the budget.

The top six success factors which influence your ability to hit your budget targets are:

Planning and project review

This was in the top three for all success measures, which makes a lot of sense. This area covers progress monitoring, good scheduling, a flexible approach backed up by risk management and a sensible approach to managing change, good project initiation and an approach to lessons learned.

Effective governance

This was another factor that correlated strongly to project success across all the measures. You can’t monitor and control your spending unless you have clear governance in place. And more than clear governance: it needs to be effective at keeping that spending under control.

Goals and objectives

Unsurprisingly, this was the third success factor that mapped widely across all areas.

Proven methods

Related to the budget measure specifically, proven methods (i.e. “best practice” techniques) has the same statistical influence as goals and objectives and the next one…

Supportive organisations

This relates to whether the culture, structure and environment are set up to be conducive to project success. The example given in the research document is that trade unions are supportive of the project.

Competent project teams

As you’d expect, having project managers and team members who know what they are doing and are capable of carrying out their roles without making stupid mistakes is pretty important.

Commitment to project success

This relates to everyone involved believing that the project is achievable. In other words, making sure everyone is aligned to the vision and that the vision is not ridiculous. This has to flow across all the team members from the sponsor to suppliers and any other third parties involved.

The least important success factors

The three success factors deemed statistically the least important to being able to deliver to budget are:

• Aligned supply chain
• Capable sponsors
• Appropriate standards

What about funding?

Surprisingly, secure funding as a success factor comes in at number nine. It’s not in the bottom three, but it isn’t in the top six either. I thought that was odd: surely secure funding is a pre-requisite for hitting your budget?

I suppose, on thinking about it, that it isn’t. If your funding isn’t properly in place then you don’t have a budget to hit.

Subsidiary success factors

The survey also looked at subsidary success factors: those that aren’t considered the main ones (the 12 mentioned above) but that are still statisically significant when you look at their contribution to project success. I should probably add at this point that it was a survey, so these are respondent-reported outcomes rather than an independent expert analysing project data and assigning success factors and measures objectively.

The three subsidiary success factors that correlate with delivery to budget are:

1. The project has realistic time schedules
2. Tight control of budgets is in place to ensure that the value of available funding is maximised
3. The project has active risk management.

Again, none of this stuff is rocket science. If making sure that your project delivers within the budget you have agreed, then you need to make sure you have enough time to do it, manage your money well and mitigate risk in a sensible way.

Do these results about project success factors and their impact on whether or not you can deliver to budget come as a surprise to you? Let us know in the comments.

About the survey: The study was done by asking 25 leading project management professionals to come up with an initial framework for success factors and then checking it out with 862 practitioners. You can read more about it on the APM website and the whole report from BMG is available as a PDF download here.