With all of the time and energy that goes into projects, the last thing we want is for a project to fail. Unfortunately, this happens more often than we would like. Why do projects fail so often? How can we ensure their success? The Magic Triangle of Project Management is a model that outlines the three dimensions of project management: timing, costs and quality. For a project to be successful, all three of these dimensions come into play. The project needs:
- to be ﬁnished by the agreed upon completion date (timing),
- to have actual costs that do not exceed the budget (costs),
- and the service or product to be delivered satisfactorily (quality).
Failed projects cause frustration for all involved: the project team, project managers and upper management. They also create a huge financial burden on companies. In fact, Gallup has reported that 5 to 15% of all IT projects in the US fail, which equates to a cost of $50 to $150 billion per year. But again, why do so many projects fail? Is it that project managers lack skills, employees are unmotivated or something else entirely?
Through our research, here is a list of 5 reasons that projects fail:
- Insufficient capacity
- Changing project scope
- Inadequate risk management
- Lack of leadership
- Lack of strategic contribution
… lack of strategic contribution? A study in 2012 by Michael Stanleigh showed that 68% of companies worldwide do not use project prioritization processes or tools to align projects and corporate strategy.
Strategically aligning projects successfully has more advantages than just preventing a company from working on projects that will ultimately not have a major impact. It also directly affects the project success itself! How? Let’s look at how strategic contribution can improve a project’s chance for success.