8 Scary Project Management Statistics That Cost You Money (and 4 Tips for Success)
Project Management isn’t for the faint of heart. There is a shockingly high rate of project failure… but on the other hand, great project management can be a key differentiator that leads a company to successfully achieving its goals.
Below, we’re sharing some scary statistics about why projects fail. The good news is that this doesn’t have to happen to you! We’re also sharing some things you can do to decrease your risk level and increase your likelihood of success.
Scary Project Management Statistics
- Projects go over budget by 27% on average, and one in six projects has a cost overrun of 200% [Harvard Business Review]
- 73% of respondents feel that their projects are either always or usually “doomed right from the start” [Geneca]
- Failed IT projects cost the U.S. economy about $50-$150 billion annually [Harvard Business Review]
- 80% of dev teams spend half their time on rework [Geneca]
- 17% of IT projects go so badly that they can threaten the very existence of the company [McKinsey]
- Only 2.5% of companies successfully complete 100% of their projects [Gallup]
- Projects that are aligned to an organization’s strategy are completed successfully more often than projects that are misaligned (71% versus 48%), but on average 60% of projects are not aligned to strategy [PMI]
- Organizations that undervalue project management see 50% more of their projects failing [Teamstage]
Preventing Project Failures
There are an almost infinite number of reasons why projects fail. Sometimes those reasons are completely outside of the PM or company’s control. But the good news is that sometimes they are controllable, and a good project manager will do everything possible to decrease risk in areas that they can control.
Start with Excellent Planning
Projects have a higher likelihood of success if they start with great planning or discovery sessions. This is one of the most important stages of project management, but it is also frequently overlooked. Before you begin actual work on the project, take time to carefully plan your goals, resources, roles & responsibilities, scope, budget, deadlines, and more. Be sure to spend time aligning the team and project sponsors.
Communicate Constantly
There is no such thing as over-communicating! Poor communication is one of the primary causes of project failure. Be sure that every step along the way, you’re communicating with the team, stakeholders, project sponsors, and management. Include details about what just happened, what’s happening next, and – crucially! – what the major risk factors are.
Manage Changes
No project goes according to plan every time, but how you respond to changes can make or break the project overall. When changes inevitably happen, be prepared to find exactly what you need to adjust to keep things on track. Recall your planning and what the most important goals are, and adjust your budget, scope, deadline, or resources to meet those goals. Always communicate every change (along with the impact) to everyone involved as early as possible.
Set Expectations
Improper expectations can mean that even when things are going well on paper, the project still fails. No one wants to deliver a project that doesn’t solve the stakeholders’ needs or gets scrapped by management after all your hard work. Align with the team, stakeholders, and project sponsors early in the project and make sure they have clear expectations on what will be delivered (and when).
Setting Your Project Up for Success
A few more statistics for you:
- 80% of “high-performing” projects are led by a certified project manager [Wrike]
- Projects are 2.5x more successful when project management practices are implemented [Teamstage]
- 73% of organizations that use formal project management approach always or often have met the goal or intent [PMI]
- Organizations that invest in proven Project Management practices waste 28 times less money [CIO]
The data is clear: having excellent project management in your organization can translate into meeting your goals, hitting your budget and deadline targets, and decreasing operational risk.
Whether your project is just getting started, already moving, or has fallen off the rails, LunarLab can be your personal mission control to stay on track. Contact us to discuss ways to implement expert project management techniques into your organization.
