Khairul Azizan CucunagaLecturer - PhD (candidate) Project Management (Int. Univ. MALAYA-WALES)| Universiti Kuala LumpurKuala Lumpur, Malaysia, Malaysia
As been studied by Ernest & Young in 2014, 64% of 365 Oil and Gas projects are facing cost overrun due to delay worldwide that cause the collective costs for the projects ran over initial projections by USD$1.7 trillion, up from USD$1.2 trillion. Saving Changes...
Jean-Eric AncelPPM Senior Expert| CapGemini EngineeringBrignais, France
Feb 27, 2017 8:30 AM
Replying to Khairul Azizan Cucunaga
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Since 64% of oil and gas projects worldwide are facing overrun, delay, or even incomplete as been described by Ernst & Young, I am curious to know if there is any relation between the top management decision making effectiveness and project failure / success. Most expert always treat risk management as a key that contribute to project success.
One thing sure : the real buy in of top management will impact the success rate of your project. It's all about change : if your top management does not fully endorse the change created by your project, you will observe organizational reluctance, inertia, ... in fact negative factors that will bring your projwect out of success.
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2 replies by Jean-Eric Ancel and Tim Podesta
Mar 28, 2017 12:33 PM
Tim Podesta
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To add to your insightful comment and the others that have appeared recently I believe that 'alignment' is a key success factor and also a missing for many projects that get into difficulty. I think of alignment at three levels;
1. alignment to the business strategy - senior leadership should ensure this.
2. alignment amongst stakeholders so they are all on the same train (the analogy used in another comment) - this needs to be achieved by the project manager and sponsor - there are great tools for helping this - in construction the CII have proven the PDRI through industry research.
3. alignment in the project team - also achieved by the project manager through empathetic leadership and alignment sessions - once again the PDRI workshop can help.
Apr 01, 2017 3:54 AM
Jean-Eric Ancel
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I agree with your post, Tim. Alignment is key.
Saving Changes...
Edward DanielsProject Manager| IndependentGlen Burnie, Md, United States
Strategic, tactical and operational plans vary with organizations, so there is no one way to individually know as different organizations do project approval in different ways.
To answer "I would like to know how the decision making effectiveness by top management during the pre-approval stage could affect the project success or failure that contributed to cost overrun due to delay, incomplete and etc".
I know that management approval delays have some associated costs during pre-approval but i think it may be insignificant since most organizations work on strategic plans which affect them 3-7 years down the road. Tactical plan delays may affect them in the short term but the costs will depend largely on the project.
Take for example, server and workstation modernization project for an organization. If a delay is made in approving the purchase of new servers and workstations, how much cost overruns can they incur?
If they are buying versus building a software for use, same argument. If they buy the software today or 6 months down the road, how much different will procurement costs be? Now if they hired consultants with nothing to do, they may lose money but in my experience there is less cost overrun due to approval delays than we anticipate.
Most organizations perfect their procurement processes and improve procurement costs with time. As PMs, if cost overruns are issues we anticipate, we should bring it to executime management notice before it becomes an issue. I think we shouldn't unnecessarily assume something will cost overruns until we have had a time to check it out. Saving Changes...
Tim PodestaDirector of PM/PMO| Former BP- now IndependentPenn, Bucks, United Kingdom
Mar 28, 2017 10:44 AM
Replying to Jean-Eric Ancel
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One thing sure : the real buy in of top management will impact the success rate of your project. It's all about change : if your top management does not fully endorse the change created by your project, you will observe organizational reluctance, inertia, ... in fact negative factors that will bring your projwect out of success.
To add to your insightful comment and the others that have appeared recently I believe that 'alignment' is a key success factor and also a missing for many projects that get into difficulty. I think of alignment at three levels;
1. alignment to the business strategy - senior leadership should ensure this.
2. alignment amongst stakeholders so they are all on the same train (the analogy used in another comment) - this needs to be achieved by the project manager and sponsor - there are great tools for helping this - in construction the CII have proven the PDRI through industry research.
3. alignment in the project team - also achieved by the project manager through empathetic leadership and alignment sessions - once again the PDRI workshop can help.
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1 reply by Chandrashekhar Thatte
Apr 01, 2017 2:21 AM
Chandrashekhar Thatte
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Good comment,Tim ! I endorse your views.
Saving Changes...
Khairul Azizan CucunagaLecturer - PhD (candidate) Project Management (Int. Univ. MALAYA-WALES)| Universiti Kuala LumpurKuala Lumpur, Malaysia, Malaysia
Mar 28, 2017 7:54 AM
Replying to Chandrashekhar Thatte
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Yes,the Project Risk management should cover and manage all the project associated risks.Water filter analogy,in my opinion, can not be rightfully applied.We may relate the project selection process to the well planned and well laid rail track(top management decision) which takes the train(Stake holders) ,driven by the engine(Project Manager),to the predetermined destination provided the engine is capable and resourceful(fuel)to reach the destination in scheduled time.The train invariably gets late (cost over-run)in reaching the destination.Hope this helps !
Thank you Mr. Chandra. Really appreciate your reply.
During the project selection and project approval process, is there any possibility that decision making could be influence by Emotional Quotient (EQ) a.k.a. Emotional Intelligence (EQ) and also Intelligence Quotient (IQ) of the decision maker. If it does, from your personal experiences,how it affect the project success? For example, in some countries where top management has a lot conflict of interest, corruptions, emotional and unqualified managers, and lack of experiences as decision maker especially in approving the mega projects that cost billion of dollar. Do you think that all the above elements will affect the project success?
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1 reply by Chandrashekhar Thatte
Apr 01, 2017 2:17 AM
Chandrashekhar Thatte
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I have no personal experience/exposure to confirm whether EQ/IQ influences decision making and affects the project success.But feel that decision making with rightful and balanced application of EQ/IQ would have a positive/beneficial influence in the Project selection and project approval process.Conflict of interest,corrupt and unqualified managers and lack of experience would definitely affect project selection process.
Thank you Mr. Chandra. Really appreciate your reply.
During the project selection and project approval process, is there any possibility that decision making could be influence by Emotional Quotient (EQ) a.k.a. Emotional Intelligence (EQ) and also Intelligence Quotient (IQ) of the decision maker. If it does, from your personal experiences,how it affect the project success? For example, in some countries where top management has a lot conflict of interest, corruptions, emotional and unqualified managers, and lack of experiences as decision maker especially in approving the mega projects that cost billion of dollar. Do you think that all the above elements will affect the project success?
I have no personal experience/exposure to confirm whether EQ/IQ influences decision making and affects the project success.But feel that decision making with rightful and balanced application of EQ/IQ would have a positive/beneficial influence in the Project selection and project approval process.Conflict of interest,corrupt and unqualified managers and lack of experience would definitely affect project selection process. Saving Changes...
To add to your insightful comment and the others that have appeared recently I believe that 'alignment' is a key success factor and also a missing for many projects that get into difficulty. I think of alignment at three levels;
1. alignment to the business strategy - senior leadership should ensure this.
2. alignment amongst stakeholders so they are all on the same train (the analogy used in another comment) - this needs to be achieved by the project manager and sponsor - there are great tools for helping this - in construction the CII have proven the PDRI through industry research.
3. alignment in the project team - also achieved by the project manager through empathetic leadership and alignment sessions - once again the PDRI workshop can help.
Good comment,Tim ! I endorse your views. Saving Changes...
Jean-Eric AncelPPM Senior Expert| CapGemini EngineeringBrignais, France
Mar 28, 2017 10:44 AM
Replying to Jean-Eric Ancel
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One thing sure : the real buy in of top management will impact the success rate of your project. It's all about change : if your top management does not fully endorse the change created by your project, you will observe organizational reluctance, inertia, ... in fact negative factors that will bring your projwect out of success.
I agree with your post, Tim. Alignment is key. Saving Changes...
Rama K GoberuProgram Manager| Appfire TechnologiesHyderabad, India
Mar 28, 2017 7:15 AM
Replying to Khairul Azizan Cucunaga
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Thank you Mr. Podesta. Really appreciate your reply.
I am curious to know, if decision making in project approval could be influence by EQ and also IQ. If it does, from your personal experiences,how it affect the project success? For example, in some countries where top management has a lot conflict of interest, corruptions, emotional and unqualified managers, and lack of experiences as decision maker especially in approving the mega projects that cost billion of dollar. Do you think that all the above elements will affect the project success?
Of course, yes, Khairul.
When the top management is not in agreement with the middle management (if I may introduce that into our discussion), that is a precursor for project failure and will be a dent to the confidence of all stakeholders. It is for this reason that if a mid level PM is managing or initiating a project, they should first try to get a buy in from a senior person in the organization and ensure they have empirical evidence of why a project must be taken up along with risks involved and how to handle them. In any organizations' dynamics informal processes play a major role.
In this context, I agree with the comment by Jean-Eric Ancel. I hope that helps.
