The effects of sunk cost and project completion on informationtechnology project escalation

Information technology (IT) projects can fail for a variety of reasons and in some cases can result in considerable financial losses for the organizations that undertake them. One pattern of failure that has been observed but seldom studied is the runaway project that seems to take on a life of its own. Prior research has shown that such projects can exhibit characteristics of the phenomenon known as escalating commitment to a failing course of action. One explanation of escalation is the so-called sunk cost effect which posits that decision-makers are unduly influenced by resources that have already been spent and are therefore more likely to continue pursuing a previously chosen course of action. A competing explanation, labeled the completion effect holds that decision makers escalate their commitment as they draw closer to finishing the project. In order to understand more about the relative effects of sunk cost and project completion information, a role-playing experiment was conducted in which business students were asked to decide whether or not to continue funding an IT project given uncertainty regarding the prospects for success. Three variables were manipulated in the experiment: the level of sunk cost, degree of project completion, and the presence or absence of an alternative course of action. Results showed that subjects willingness to continue a project increased with the level of sunk cost and the degree of project completion, but that subjects were more apt to justify their continuation on the basis of sunk cost. As theory would predict, the presence of an alternative course of action had a moderating effect on the escalation that was observed     

Top management support of R&D projects: a strategic leadershipperspective

A study of top management support of 213 R&D projects in 21 major firms revealed significant relationships between independent informants' perceptions of top management support, project characteristics, and project performance. Testing a model based on a strategic leadership perspective, top management support was found to be directed at certain types of projects, i.e., those that were expected to make greater contributions to business goals, represented larger investments, were seeking new products and process versus incremental improvements, and had originated from business sources as opposed to R&D. In addition, even after controlling for these project characteristics, projects with top management support were less likely to be terminated. In contrast, after controlling for project characteristics, completed projects with top management support were not judged to make greater contributions to the firm's business goals suggesting top management may not be able to pick winners. Findings are discussed in terms of future research and implications for top management leadership within R&D     

From theory to practice: toward a typology of project-managementstyles

Research literature on the management of projects has been quite slow in its conceptual development and still suffers from a scanty theoretical basis. One of the main impediments in the study of projects has been the absence of constructs and the little distinction that has been made between the project type and its managerial and organizational style. Based on the findings in a field study of 26 case projects, this research shows that there is a need to adopt a more project-specific contingency approach to project management in organizations. This study explores a two-dimensional theoretical model for the classification of technical (or engineering) projects. Projects are classified according to four levels of technological uncertainty at the time of project initiation and three levels of system scope, which is their location on a hierarchical ladder of systems and subsystems. Considerable differences were found in management style, project organization and operational practice when moving along each of the model's two axes. Differences also were observed in simultaneous change in both dimensions. The findings suggest a handful of practical and managerial implications. They are based on the premise that a proper project classification prior to project initiation and a carefully selected management style may lead to better implementation and to an increased chance of project success     

A rework reduction model for construction projects

Rework is an endemic problem in building construction projects and is an area of research that has received limited attention. Recent research has shown that rework is the primary cause of time and schedule overruns in projects and that rework levels do not significantly differ between current procurement methods despite calls from government for the use of more integrated procurement approaches such as design-and-construct to improve project performance. To reduce the incidence of rework throughout the construction supply chain, data from 161 completed projects were gathered using a questionnaire survey. Stepwise multiple regression was used to determine the significant variables that contributed to rework in projects. In conjunction with previously reported research, these variables were used to develop an alternative procurement model for reducing rework in projects. It is suggested that the proposed model could be used to stimulate interorganizational relations and promote teambuilding during the formative stages of a project, which is essential for reducing design-related reworking.     

Managing Information Technology Project Escalation and De-Escalation: An Approach-Avoidance Perspective

This paper presents an integrated theoretical process model for identifying , describing, and analyzing the complex escalation and de-escalation phenomena in software development projects. The approach-avoidance theory is used to integrate core elements of various escalation theories into a holistic, explanatory framework for the two phenomena. We use a process model to identify antecedent conditions, sequences of events, critical incidents, and outcomes over the course of a project. The analysis also operates at multiple levels: project, work, and environment. This highlights the recursive interactions between project, organizational work activities, and their contexts during the software project development process. By conceiving the processes of commitment escalation and de-escalation as sequences of events involving recurring approach-avoidance decision conflict, this research allows for a deeper understanding of the ambiguity and dilemma that decision makers face during project escalations and de-escalations. Our proposed model was both informed by a detailed case study that exhibits both project escalation and de-escalation conditions, and at the same time, illuminates the perspectives of various stakeholders.      

高校保密项日风险控制评价

高校保密项目的风险控制能力直接关系到高校项目的安全性,对以国防研究为特色的高等院校尤为重要。从高校保密环境复杂性分析人手,对高校保密项目进行风险识别,构建风险控制能力模型。在此基础上,采用模糊综合评价法对高校保密项目风险控制能力进行评价,并以西部某国防高校为例进行实证研究,对评价结果进行分析,以期为高校保密工作部门提供科学的管理依据。同时,这种方法有效弥补了定性研究的不足,为高校保密项目的风险管理研究提供了一种新的思路。     

To terminate or not an ongoing R&D project: a managerialdilemma

This empirical study attempts to develop a framework to assist managers in deciding whether to abandon an ongoing research and development (R&D)/innovation project at various stages of R&D. The monitoring framework is based upon the models developed through multiple logistic regression analysis on a data set of 60 successful and unsuccessful projects. The technique determines those factors which discriminate between success and failure of a project. The major advantage of the proposed framework is that it provides a single indicator which can be used to monitor the success of an ongoing project at various stages over its life span. The indicator incorporates the combined effect of all the factors and avoids the problem of setting thresholds for individual factors or success indicators     

A Decision Support Model for Project Manager Assignments

The question, "How to assign projects to project managers?" is considered to be one of the most important questions in project management. Nevertheless, methods to answer this question have not yet been sufficiently addressed in the literature. In practice, even though the question is rather common, practitioners still seek an effective project assignment methodology - especially, for the assignments of project managers of multiple concurrent projects, such as a project manager of new product development projects in typical high-technology industries. To respond to this question, we performed an inductive study to develop a theoretical framework for project assignments, including some significant assignment criteria and processes. We found that to be effective in project assignments, management should consider strategic elements of the organization in project prioritization, project requirements and competencies of project managers in project manager-to-project matching, and some organizational/personal limitations regarding the assignment. An optimization model was developed to apply this framework. This model can assist in assigning projects to project managers for the better performances of projects, project managers, and the organization.     

Selecting R&D projects at BMW: a case study of adoptingmathematical programming models

Research and development (R&D) project selection is a critical interface between the product development strategy of an organization and the process of managing projects day-to-day. This article describes the project selection problem faced by an R&D group of BMW (Munich, Germany). The problem was structured as minimizing the gap between target performance of the technology to be developed and actual performance of the current technology along chosen criteria. A mathematical programming model helped this organization to increase the transparency of their selection process, which previously had been based on experience coupled with evaluation of individual projects in isolation. Implementation was a success in that the predevelopment group continues to use the model to make better decisions. However, the organization did not use the model for its intended purpose: constrained optimization. The traditional explanation for this partial implementation is that the analytical model did not capture all considerations relevant to optimization (e.g., uncertainty or strategic fit), and that further model refinements are required to achieve further implementation. We offer an alternative explanation, one based on the technology transfer literature     

A specific decision support system (SDSS) to develop an optimalproject portfolio mix under uncertainty

A specific decision support system (SDSS) than can be used as a methodology for choosing an optimal portfolio mix of information systems projects is described. The SDSS is developed by applying a number of well-known management science techniques. A net present value (NPV) of the projects is maximized within limited resources, and the solution of the model provides the optimal project start period, system development language, and staff size. The SDSS conducts a risk analysis on those variables that are deemed critical when determining the optimal solution. The final phase of the SDSS establishes the value of perfect information on these critical variables. To demonstrate the usefulness of the model an example consisting of five information system (IS) projects is presented. It is shown that, given the estimates of the exogenous parameters of the IS project environment, the model can determine when to begin the project development, which systems development language to use, and the number of systems development staff assign to each project. The degree of the variability of the estimates of exogenous parameters is evaluated through empirical probability distributions     

External Change in Large Engineering Design Projects: The Role of the Client

A problem facing the management of large engineering design projects is: Why do clients often adopt an early commitment strategy on design decision-making when they want to speed up project delivery, yet allow late changes to the project definition to accommodate the resolution of (un)foreseen external uncertainties? Empirical findings illustrate this problem and underpin a 2-stage model of the concept development process, in which conceptualization is followed by design, and stochastic pre-emption simulates asymmetric changes. Simulation experiments demonstrate that when clients make commitments early on in conditions of high uncertainty, they increase the likelihood (upside risk) of speeding up delivery if external events do not materialize; however, if these events do materialize, they increase the likelihood (downside risk) of causing design rework and losing process predictability—especially when the ability to reuse design work after a change is limited. We show that moderate design postponement is appropriate if clients relinquish some of the upside risk of finishing the design sooner. Moderate design postponement does not increase the downside risk of overrunning the delivery completion date in relation to the risk clients incur when they commit earlier because it reduces expected variability in design. These insights highlight the client's role in foreseeing external uncertainties and judiciously instructing changes to design teams. They also demonstrate the applicability of postponement to large engineering design projects where external uncertainty emerges as a fundamental contingency.     

A framework for the management of projects in complex organizations

A technique that provides insights into the possible ways of dealing with the problems of internally selecting a project manager from a complex organization and power balancing in project management between the functional managers and the project manager is described. The project management technique is based on the technology-environment (T-E) model developed to determine the organizational control structure. The basic concepts and parameters of the T-E model and its relevance to the management of projects in complex organizations are discussed. An example of a multinational oil company under a joint venture agreement with a petroleum owner country is presented to illustrate the application of the technique. The guidelines for project manager selection are outlined     

Project Acceleration via Activity Crashing, Overlapping, and Substitution

It is an established fact that projects are almost always behind schedule. Consequently, there is a great need for the allocation of additional resources with a view to accelerating projects, so as to ensure delivery on the planned date. These resources are obtained from project budget contingency, whose purpose is to foresee and budget for delays arising from disruptions, inaccurate activity time and cost estimates, and resource nonavailability when required for the execution of project activities. This type of problem arises both in the planning phase of a project, particularly in the context of bidding, as well as in ongoing projects, including new product development projects. The research reported in this paper provides a mixed-integer nonlinear programming model for the acceleration of projects, employing the simultaneous crashing, overlapping, and substitution of project activities. In order to ensure convergence, this model is transformed exactly into a mixed-integer linear programming model. The assumptions of the model are presented and discussed with engineering project management practice in mind. Application of the model to four examples of different sizes and nature, three of which are practical cases, demonstrates the efficiency of the model, implemented in commercial optimization software, in solving practical project acceleration problems.      

Significance of project management structure on development success

The significance of project management structure on the success of 546 development projects was investigated. Multivariate procedures revealed that success varies according to the project structure used, even when other determinants are accounted for. Projects relying on the functional organization or a functional matrix were less successful than those which used a balanced matrix, project matrix, or project team. The project matrix outperformed the balanced matrix in meeting schedule, and outperformed the project team in controlling cost. Implications for managing development projects are briefly discussed     

全寿命周期装备综合保障信息化框架研究

在全寿命周期装备综合保障业务的基础上,提出我国装备全寿命周期的综合保障信息化目标就是从装备全寿命信息无纸化入手,逐步建立数字化装备综合保障平台,营造集成数据环境,实现装备全寿命周期信息的数字化、自动化、网络化与集成化。围绕装备综合保障信息化建设目标,提出了装备的面向全寿命周期的综合保障信息化框架,分析了框架组成及实现关键技术。     

Self-selective multi-objective robot vision projects for students of different capabilities

Over the last decade or two, project experience has received increasing attention in engineering education. Many engineering departments now use projects as a central part of their education course. In mechatronics education, for example, the techniques and knowledge of several different disciplines need to be synergistically combined, and students acquire practical skills by participating in various interdisciplinary projects. However, it is not easy for an instructor to manage a project efficiently, particularly if the project is assigned to upper year college students because they can have significantly different levels of ability. To overcome this problem, we propose a multi-objective project scheme. A project is arranged to have multiple small objectives with different difficulty levels, and each student selects one objective that he or she thinks can be achieved – there is a trade-off between the difficulty level of an objective that a student selects and the maximum score that he or she can obtain. The instructor’s evaluation and advice can then be given to students according to their individual capabilities (which is implied by the selected objective). In this way, every student can actively participate in the project, and the approach enables most students to produce successful results. The proposed project management scheme can be implemented in a parallel or serial structure. Both structures were tried with robot vision projects for junior students majoring in Electronic Control Engineering at Daegu University, South Korea. We found that the project scheme provides enhanced engineering education as well as increased student engagement and motivation.     

Turning around runaway information technology projects

Factors that cause IT projects to go awry due to delays and overspending include: lack of executive support and user involvement, inexperienced project managers, unclear business objectives and requirements, scope creep, casual project management, ineffective use of methodologies, and use of unreliable estimates. As the phenomenon of runaway projects is prevalent in organizations today, managers need a better understanding of such projects and, more importantly, need guidance as to how to turn them around, leading to successful outcomes. Because runaway projects are frequently portrayed as mismanaged undertakings, the credibility of those seen as responsible for their handling is usually tarnished. The serious risk and opportunities that exist in runaway project situations, managerial response is of paramount importance.     

Collaborative tools and processes to support software engineering shift work

This paper describes the construction of and early experiences with a software engineering support environment for projects using globally distributed teams. The goals of the project are twofold. Firstly, it aims to construct a pragmatic solution to the problems experienced by widely geographically dispersed groups which collaborate on software development projects. Secondly, it aims to experiment with processes which facilitate software shift work through exploitation of time differences between collaborating groups. The construction of the support environment, known as GWSE (Global Working in Software Engineering) system, is presented, including its architecture and integration with existing workflow, document and project management tools. The use of the GWSE system in a trial development project is then described, including an initial quantitative analysis of the collaboration overheads experienced.     

基于能量优化的微博用户转发行为预测

微博用户转发行为预测是微博社交网络消息扩散模型构建的基础,在舆情监控、市场营销与政治选举等领域有着广泛的应用.为了提高用户转发行为预测的精度,本文在MRF（Markov Random Field）能量优化框架下综合分析了用户属性与微博内容特征、用户转发行为约束、群体转发先验等因素对用户转发行为的影响,并在逻辑回归模型的基础上构造了相应的能量函数对用户转发行为进行了全局性的预测.实验结果表明,微博用户转发行为不仅取决于用户属性、微博内容等特征,而且也受到用户转发行为约束、群体转发先验等因素不同程度的影响.相对于传统算法,本文算法可以更准确地对用户转发行为进行建模,因而可获得更好的预测结果.     

Evaluating the Relative Performance of Engineering Design Projects: A Case Study Using Data Envelopment Analysis

This paper presents a case study of how Data Envelopment Analysis (DEA) was applied to generate objective cross-project comparisons of project duration within an engineering department of the Belgian Armed Forces. To date, DEA has been applied to study projects within certain domains (e.g., software and R&D); however, DEA has not been proposed as a general project evaluation tool within the project management literature. In this case study, we demonstrate how DEA fills a gap not addressed by commonly applied project evaluation methods (such as earned value management) by allowing the objective comparison of projects on actual measures, such as duration and cost, by explicitly considering differences in key input characteristics across these projects. Thus, DEA can overcome the paradigm of project uniqueness and facilitate cross-project learning. We describe how DEA allowed the department to gain new insight about the impact of changes to its engineering design process (redesigned based on ISO 15288), creating a performance index that simultaneously considers project duration and key input variables that determine project duration. We conclude with directions for future research on the application of DEA as a project evaluation tool for project managers, program office managers, and other decision-makers in project-based organizations.