Avoid the White Elephant – Make Projects More Successful

Traditionally project success was determined by how well the objectives of time; budget; safety, environment, and quality (SEQ) were achieved. You could call this project management success, as it is only really worried about whether project activities have been controlled and managed well.

The reality is that a project can be delivered on time, under budget, with a perfect SEQ record and still be deemed a failure. Conversely a project can be late, over budget and have notable SEQ issues and still be deemed a success in the long run.

What does this tell us? Well for project owners’ success comes down to whether the project delivered the intended benefits. It is important that projects are well managed, and that time and budget constraints are taken seriously, but not at the expense of delivering the intended benefits. If a project fails to realise the intended benefits it risks becoming a white elephant.

What is a Benefit?

A project benefit is defined as – an improvement or advantage gained by a stakeholder(s), which contribute to the achievement of an objective(s). That is a benefit provides value to stakeholders.

Benefits can be tangible (quantifiable) or intangible (qualitative i.e. visible but not easy to measure). A tangible benefit could be reduced travel time. Whereas an intangible benefit might be improved quality of life.

All projects are initiated based on a need or desire to deliver benefits to stakeholders. How these benefits are defined and managed through project delivery is a determining factor in whether a project with be considered a successful.

How can projects fail to deliver benefits?

It might seem implausible that a multi-million- or billion-dollar project could fail to deliver the intended benefits. But there are plenty of examples of white elephants sitting out there. Common obstacles to realising intended benefits include:

• Vague organisational objectives lead to poorly defined benefits – Unclear objectives, mean unclear advantages and improvements. If the desired outcome is not measurable or observable the project will be perceived as a failure.
• Misunderstanding stakeholder needs – This often presents as overstating the potential benefit of a project (See our article on Optimism Bias). Or in under or over specifying when translating benefits into requirements. This results in the project building something that stakeholders do not value, such as a “bridge to nowhere” or an asset that is expensive to operate.
• Scope Creep – As the project develops it is common for stakeholders to request (or demand) additional scope. This scope may have nothing to do with the project’s intended benefits. Scope creep increases cost and time of the project, and obscures the delivery of the intended benefits. As the project costs balloons value engineering is used to cut scope. If there is a lack of focus on benefit realisation descoping of deliverables necessary to achieve the original intended benefits is likely.
• Rigid project management systems and processes – Yadi Li, Xiao Liu & Yan Ning (2022) find that rigid and formal project management systems improve accountability and efficiency in the project phase, but conversely discourage project stakeholders from prioritising long-term outcomes. An example of this would be the choice of a lower level of surface protection for steelwork due to expedience and construction cost. The long-term impact of this is an increase in operational effort and cost, which is greater than the short-term gains.
• Benefit Realisation not a focus through delivery – Benefits are key focus during the initiation and planning phases of the project. As the project moves into delivery however the contractual arrangements with 3^rd party contractors and consultants have little emphasis on benefits. The focus is purely on delivering a list of requirements on time and under-budget. It is not until project closure that the focus returns to evaluating whether benefits have been realised, at which point it is too late.

What can be done to improve benefit realisation and project success?

Most large and government organisations delivering projects have detailed benefits realisation and management frameworks. So, the lack of a framework is not the reason that benefit realisation fails. Rather failure occurs in the execution of benefits management through the project. To make projects more successful project sponsors and managers must elevate the importance of benefits realisation, through all phases of the project.

In the initiation and planning phases, project sponsors should ensure:

• Organisational objectives are clearly defined.
• The stated organisational objectives reflect the actual organisational objectives.
• Project stakeholders have been identifying and thoroughly analysed.
• Identified benefits will deliver value to these stakeholders.
• Value of the intended benefits exceeds the cost and effort of the build and operating costs.

As the project moves into the delivery phase, project sponsors and managers should ensure:

• The definition of project success is clearly defined and communicated to all stakeholders.
• Benefits realisation is discussed frequently with delivery partners.
• Solutions to overcome projects delays and setbacks do not compromise the benefits and value for stakeholders.
• Additional scope items do not compromise the projects’ ability to deliver the intended benefits.

Wrapping Up

Any perceived failure of a major project(s) by the public and key stakeholders would present a significant barrier to further investment in important community and nation building projects. This makes it vitally important that project sponsors and managers ensure that their projects are delivering the promised value to stakeholders.

Clearly defining project success as the realisation of the intended benefits will help frame the decision-making and actions of all stakeholders through the project lifecycle. Project sponsors and managers must then foster an environment that elevates the deliver of benefits over the short-term project budget and time constraints.

These actions will make projects more successful. With the reliable delivery of valuable assets and infrastructure the public maintain trust in the construction industry. Which will also ensure that governments and the private sector continue to support invest in these projects into the future.

[Get in Touch] [Learn More About Infrastructure Delivery]

 Sources:

Jorge Gomes, Mário Romão (2016) Improving Project Success: A Case Study Using Benefits and Project Management, Procedia Computer Science, Volume 100, Pages 489-497, ISSN 1877-0509, https://doi.org/10.1016/j.procs.2016.09.187.

Yadi Li, Xiao Liu & Yan Ning (2022) Disentangling the failure of benefits realization in public institutional building projects: a paradoxical understanding of formalization, Journal of Asian Architecture and Building Engineering, 21:2, 575-587, DOI: 10.1080/13467581.2020.1869015