A recent audit report revealing mismanaged IT projects by the Toronto Transit Commission (TTC) has shed light on the difficulties of project management across businesses, given a project scope that can often change and broaden.
The audit report from last October noted that mismanaged IT projects resulted in soaring costs after just several years. For example, 15 information technology projects the TTC had proposed by 2001, expected to cost $49.7 million, eventually cost $170.4 million. The report also said the TTC often uses consulting companies, but tends to overestimate the costs those companies will incur by about $2 million a year. Using staff instead of consultants could have saved the TTC $364,000 a year, the audit concluded.
In general, an IT project initiated several years prior “is a completely different creature” due to developments in technology and higher expectations that can lead to a much broadened project scope, said John Alley, director of the project management office with Hamilton, Ont.-based McMaster University.
But it’s also hard to estimate the cost of public sector projects because of the challenge of operating in “an environment of severe constraint because generally speaking, there’s a fixed pot of money for all projects,” said Alley.
“It’s tremendous pressure to cram as much as possible into that budget,” said Alley, who has worked in the public sector for about 20 years. Contributing to the difficulty is the fact that the TTC is a complex business that lacks the ability to benchmark itself against similar organizations, he added.
With any IT project — be it public or private sector — considering that broadened scope is crucial in determining whether a project is actually over budget and behind schedule, noted Bill Duncan, principal of Lexington, Mass.-based consulting and training firm Project Management Partners. He said that many projects are over budget and behind schedule, however, there is often disagreement as to what exactly that means especially if the observation is based solely on initial expected cost.
But IT projects gone awry can be the result of over-optimism, which then leads to underestimation and under planning, said Duncan. He used the example of a smooth 30-minute drive from downtown Toronto to Pearson International Airport on a good day, but with factors like traffic, construction and vehicle accidents, it might take more. “Somebody says you did a bad job getting to the airport. Yes, I did, but I based my plan on my prior experience.”
Duncan also noted that senior management often doesn’t understand project management, and will demand “why can’t we just turn out projects with the same reliability that we turn out automobiles and tables and chairs?”
According to Natalie Dance, managing consultant of Toronto-based Excel in Change Consulting Inc., project management has methodologies in place to deliver on time and on budget that are based on certain specifications. But those specifications can be difficult to assess when embarking on projects.
When dealing with multi-year IT projects, in particular, changes in technology needs over time need to be considered, said Dance. And project managers should ask at various stages whether the project still makes sense and whether “we are we going to get the value that we envisioned from that project?’”
But it’s a critical question that many organizations are not posing, she said, perhaps because it’s difficult to not want to see a project to completion once the momentum is going.
Dance suggested parsing projects into six-month timeframes in order to deliver value throughout the duration of the process, therefore making it easier to adjust to the organization’s changing needs.
Besides following a process to determine project feasibility and cost, another recommendation in the TTC audit report was for improved collaboration between departments in order to share best practices and staff resources, and engage in joint development of IT systems.
According to Duncan, collaboration comes easy with well-managed organizations, but when “you have a poorly-managed organization, it’s difficult for the weak managers to improve their process because they don’t have the management skills… It’s like a feedback loop.”
Dance has observed a greater degree of project management collaboration in the private than public sector. However, although there is still often duplication of effort in private businesses, she does see a desire to minimize it.
Dance provides three points of advice to organizations around project management: constantly look back to evaluate a project’s value; have a level of coordination across the business; and perform risk management and mitigation.