Better plans, smarter decisions

When embarking on efforts to design complex things, companies often have little idea how long a project will take, what it will cost, or what they’ll finally be able to deliver to the end customer. Their initial project plans are sometimes no more than educated guesswork.

For example, in an analysis of more than 1,800 completed software projects, only 30 percent of them met their original delivery deadline and one in five of these did so by removing or deferring feature content. The average overrun is around 25 percent of the originally planned schedule. The performance of a sample of over 1,600 integrated-circuit-design projects was even more telling. Over 80 percent of those projects were late, and the average overrun was nearly 30 percent. Moreover, those projects were almost as likely to suffer an 80 percent overrun as they were to finish on time.

Delays, and the extra resources needed to counter them, mean higher costs too. The average budget overrun experienced by a group of factory-automation-software projects we studied was more than 10 percent. A fifth of those projects cost over 50 percent more than originally expected. Then there are the indirect costs. Delayed launches mean lost sales, opportunities for competitors to get ahead, and potentially damaged reputations.

(source: MK&C Insights)