Intervening conditions on the management of project risk: Dealing with uncertainty in information technology projects

A review of the outcome of many information technology (IT) projects reveals that they fail to meet the pre-specified project objectives of scope, time and budget. Despite well-established project risk management processes, project managers perceive their application as ineffective to manage risk. This failure may well be attributed to the inadequate application of those risk management processes. The purpose of this research was to investigate how project managers responsible for the management of risk in IT projects actually managed risk and to relate this back to established project risk management processes. In undertaking this investigation, we were seeking to understand the ways in which the project managers’ approaches and behaviours, when considering risk in IT projects, differed from what might be expected. Results show that because of environment-related and decision maker-related conditions, project managers tend to deny, avoid, ignore and delay dealing with risk, with the consequence of those actions having an adverse influence on their perceived effectiveness of risk management and the project outcomes. If project risk management, and its underlying processes are not to be discredited, the behaviour of project managers when confronted by uncertainty should be considered and actions need to be taken to discourage project managers’ irrational actions.     

Why projects fail? How contingency theory can provide new insights – A comparative analysis of NASA’s Mars Climate Orbiter loss

When important projects fail, the investigation is often focused on the engineering and technical reasons for the failure. That was the case in NASA’s Mars Climate Orbiter (MCO) that was lost in space after completing its nine-month journey to Mars. Yet, in many cases the root cause of the failure is not technical, but managerial. Often the problem is rooted in management’s failure to select the right approach to the specific project. The objective of this paper is to enrich our understanding of project failure due to managerial reasons by utilizing different contingency theory frameworks for a retrospective look at unsuccessful projects and perhaps more important, potential prevention of future failures. The evolving field of project management contingency theory provides an opportunity at this time to re-examine the concept of fit between project characteristics and project management, and offer deeper insights on why projects fail. After outlining several existing contingency studies, we use three distinct frameworks for analyzing the MCO project. These frameworks include Henderson and Clark’s categorization of change and innovation, Shenhar and Dvir’s NTCP diamond framework, and Pich, Loch, and De Meyer’s strategies for managing uncertainty. While each framework provides a different perspective, collectively, they demonstrate that in the MCO program, the choices made by managers, or more accurately, the constraints imposed on them under the policy of ‘better, faster, cheaper’, led the program to its inevitable failure. This paper shows that project management contingency theory can indeed provide new insights for a deeper understanding of project failure. Furthermore, it suggests implications for a richer upfront analysis of a project’s unique characteristics of uncertainty and risk, as well as additional directions of research. Such research may help establish new and different conceptions on project success and failure beyond the traditional success factors, and subsequently develop more refined contingency frameworks. The results of such research may enable future project managers to rely less on heuristics and possibly lead to a new application of “project management design.”     

Dualities and dilemmas: contending with uncertainty in large-scale safety-critical projects

Uncertainty is a fact of project life. Most decisions that are made on a safety-critical project involve uncertainty, the consequences of which may be highly significant to the safe and timely delivery of the project. Based on interviews with project management practitioners on nine large-scale civil nuclear and aerospace projects, we explore how uncertainty emerges, and how project management practitioners identify, analyse and act on it. We make three important contributions. First, we present three approaches – structural, behavioural and relational – that individuals and organizations can adopt when contending with project uncertainty. Secondly, we characterize nine dualities at play in the management of project uncertainty and thirdly, we identify key differences between how civil nuclear and aerospace project managers confront project uncertainty, which have important implications for how projects might be organized in both these industry sectors. Drawing attention to the structural, behavioural and relational approaches to project uncertainty and the tensions that manifest themselves in each approach should enable the project management community to make progress in environments of high uncertainty where situations are often complex, rapidly changing and confusing, and yet where, for reasons of safety, failure is not an option.     

The management process for complex underground and tunneling projects

Management could be considered simply that process which is necessary to achieve the Owner's goals and objectives, such as function, performance, configuration, quality, cost, schedule, operability and maintainability. However, the management of major, complex, underground and tunneling projects must deal with many inputs, conditions and variables. Different organizational approaches, techniques and process have been used—but the certainty of success remains unpredictable. A particular management approach may be very successful for one project and may fail utterly for another. Major determinants are policies, laws, regulations, local conditions and precedents-past ways of doing business. However, applying “known precedents” which worked for one project to a second one may not produce the expected, successful result and may have unintended consequences. Not surprisingly, procedures for management, procurement and administration, as well as supporting services such as partnering and risk mitigation, vary significantly depending on the city, state or country. It is apparent that, as an industry, we do not have a good process to objectively normalize project results and correlate them with management strategies. This article presents an overview of management for complex, underground and tunneling projects, touches on public policy and its effects, discusses procurement concerns, suggests an improved approach for the “project delivery process” and outlines important supporting systems such as partnering and risk mitigation. In a second article, implementation of changes to current management and contracting practices, partnering, disputes review and risk mitigation will be more fully discussed.     

Modeling project criticality in IT project portfolios

Today's IT project portfolios (ITPP) contain many projects and varied interdependencies. Depending on a project's criticality to the ITPP, a failure can have massive consequences. However, existing methods usually only assess overall project portfolio risk and do not account for the criticality of single projects and their dependencies. Applying Bayesian network modeling to ITPPs, we bridge this gap and extend the current body of knowledge for the information systems and project management literatures. Our new method analyzes single projects' criticality in a portfolio context by considering both transitive dependencies and different dependency types in an integrated way. Since we demonstrate that single projects' criticality can vary substantially, being aware of which projects are critical is a key success factor for ITPP management. For practitioners, our method provides a straightforward procedure to enhance ITPP risk management.     

The impact of uncertainty and ambiguity related to iteration and overlapping on schedule of product development projects

Overlapping and iteration stemming from concurrent engineering are fundamental features of product development (PD) projects. They may not only reduce project duration but also create process uncertainty and ambiguity. We propose that the iteration and overlapping are the main causes of uncertainty and ambiguity in the PD process. Based on discrete-event simulation modeling and analysis with Arena software, our empirical research provides a quantitative method to reveal how uncertainty related to iteration and ambiguity related to overlapping impact on project schedule. In the simulation model, we use four variables to characterize uncertainty: iteration probability, iteration length, number of iterations and activity's learning curve effect. And different sequential and overlapped process structures are used to describe the variable of ambiguity in the model. Propositions regarding the reduction of uncertainty and ambiguity by controlling iteration and overlapping are derived. Simulation experiment results yield and reinforce several managerial insights, including: the relationship between uncertainty or ambiguity reduction and the complexity of iteration or levels of overlapping; and how to control project schedule and hedge the risk resulting from overlapping and iteration.     

Systems thinking in innovation project management: A match that works

This paper discusses why conventional project management practices lead to the failure of publicly funded innovation deployment projects, and investigates how the use of systems thinking in project management can help projects be more successful. Based on 12 case studies of two EU innovation policies, we provide evidence that by using systemic project management, which entails providing flexibility in planning, communicating and controlling activities, innovation projects are more successful. This research refutes previous theory that claims that we should formalize to manage complexity and uncertainty. The key finding is that systems thinking methods provide the flexibility to manage innovativeness, complexity and uncertainty in innovation projects more successfully. Suggestions for further research include suggestions of how to embed flexibility in project management methods using the constructs of equifinality and causal embeddedness.     

Managing risks in mega defense acquisition projects: Performance, policy, and opportunities

This research explores key aspects involved in the process of managing risk associated with acquisition projects within the US Department of Defense (DOD). First, various US Government Accountability Office reports are analyzed to identify the strengths and weaknesses of the DOD’s overall program management practices, as well as individual projects. Then, the evolution and progress of United States Army’s Future Combat Systems project is examined in detail as a case study to substantiate the argument that insufficient risk management has contributed to project delays and cost overruns significantly.Poor risk management performance and practices are not unique to the Army, but arises from a system bred into the process of gaining approval to implement projects in the DOD. Incorporating a comprehensive risk management plan in the planning phase and filling key project management positions with personnel trained to recognize sound proposals from contractors would make significant strides toward improving overall project management practices in the DOD.     

建设工程项目柔性概念框架研究

建设工程项目面临很大的不确定,柔性是一种应对不确定性的有效工具。以往柔性的研究通常集中在运作管理、供应链、战略管理等领域,建设工程领域关于柔性的探讨有限,且多集中于项目的生产属性,忽视了项目的交易属性。在文献综述的基础上,工程项目的不确定性表现在:项目需求、项目管理绩效达成、交易双方相互关系3个方面;基于此,建设工程项目的柔性被划分为项目产品柔性、过程柔性和合同柔性,研究了柔性的获得渠道;建立了不同条件下建设工程项目柔性策略矩阵;并对未来建设工程项目柔性的研究做了展望。     

Project portfolios in dynamic environments: Organizing for uncertainty

This research investigated the following research question: How is uncertainty affecting project portfolios managed in dynamic environments? While different approaches have been developed in the context of the management of single projects these ideas have not been carried over to the management of project portfolios.     

Particular barriers and issues associated with projects in a developing and emerging economy. Case study of some abandoned water and irrigation projects in Nigeria

Abandoned projects have become a common sight in Nigeria. The root causes and probable solutions were studied using some major regional water and irrigation projects as case studies. Parameters assessed include source of funding, appropriateness of the contract conditions, unilateral enactment of government laws, inflationary trends and Contractors’ management technique. Despite stringent project management, successful project completion was negated by certain factors in each case. These include inadequate source of funding, price variation and corruption. Feasible approaches to overcoming these barriers were identified as definition of alternative sources of funding, phased completion of projects and the review of certain clauses in the Particular Conditions.     

Owner organization design for mega industrial construction projects

The characteristics of Mega construction projects bring great difficulties and challenges to project management, as in the aspects of complexity, uncertainty, integrated management, etc. Mega industrial construction is more difficult to managers. Traditional project management with even appropriate method and data can not meet mega construction projects, so with integrating projects objectives with strategic view, managers should design project organization on the basis of every project characteristics, establish good communication and cross-functional coordination mechanism, create unity and cooperation partnership culture in the project process. This paper has designed an owner organization of a mega industrial construction project according to relevant literature and determining factors of organization, and has also proposed that cross-functional and cross-professional coordination is key to continuous improvement and successful implementation of the organization.     

Structuring inter-organizational R&D projects: Towards a better understanding of the project architecture as an interplay between activity coordination and knowledge integration

The architects of inter-organizational R&D projects organize collaboration by structuring the activities and the knowledge base of the project. How do these two dimensions interplay and what are the implications on the project execution? The paper aims at developing new perspectives on inter-organizational multi-actor R&D projects using an exploratory inductive multi-case study of projects funded by the European Union's Research and Innovation Programmes. The projects have been studied simultaneously in terms of activity coordination and knowledge integration as well as the implications of their interplay on collaboration, project resilience and project management. The paper provides empirical evidence about six patterns of project architecture. The workflow-integrated architecture disintegrates the knowledge base, provides a lower collaboration potential and may require high management efforts, while a workflow-decomposed architecture makes project management easy but provides little added value from the inter-organizational setting. Nearly decomposable architectures offer the highest collaboration potential under contingent conditions.     

Technical and institutional factors in the emergence of project management

This paper explores the fundamental question of why the practice and discipline of project management emerged during the 1940s through the 1960s in the United States. Although projects have been around for millennia, not until the middle of the 20th century in the U.S. military–industrial–academic complex did project management become formalized in institutional processes and as an academic discipline. The paper argues that technical complexity and novelty were the primary factors driving project management and its engineering counterpart systems engineering, as a new organizational form. Institutional factors such as the need for legal separation between government and industry created important secondary effects that drove the particular forms in which project management evolved. This paper uses examples from large scale, complex projects of the 1940s through 1960s in the aerospace and computing industries to tease out the fundamental technical and institutional factors that led to the emergence of project management in these two key American industries during this period.     

Shared and fragmented understandings in interorganizational IT project teams: An interpretive case study

Shared understanding is essential in interorganizational projects to integrate the divergent knowledge of individual team members and support collaborative knowledge building. This can nevertheless be a challenging undertaking in interorganizational projects as team members must continuously negotiate differences in their organizational and professional backgrounds during project work. In this paper, we explore how interorganizational IT project teams deal with sources of ‘fragmentation’ in their understanding, explicating the theoretical and practical implications that these have for project management. Our study is needed to explore the increasingly complex and emergent nature of interorganizational project management today where neither goals nor the means of attainment are known with precision at a project's launch. We analyze interpretive case study findings from an 8-month IT project involving diverse organizations from industry, academia, and healthcare. Based on our findings, we develop a framework which highlights the relationship between three sources of fragmentation of understanding (interpersonal, technical, and contextual) across key project activities. We contribute towards project management literature by revealing how these sources of fragmentation might be overcome through framing project activities (the problem, method, and solution formulation) differently. While fragmentation may characterize any, or all, of these key activities, it is not without remedy.     

Project governance and its role in enabling organizational strategy implementation: A systematic literature review

Project governance is widely recognized to be among the most critical factors for successful project delivery and benefits realization. However, the literature on project governance is fragmented and, despite past efforts by researchers in the field, there is yet a lack of consensus on what project governance is and the fundamental elements it constitutes. Furthermore, although project governance occupies the prime position to ensure that projects are aligned with organizational strategic objectives, the guidelines for how project governance can enable organizational strategy implementation through projects is a crucial yet under-researched area in the literature. Accordingly, building on the insights from past reviews and an initial scoping study, a systematic literature review was conducted on project governance examining and comparing 271 publications from both academic and professional literatures. The findings of this study build upon the efforts of its predecessors to shed light on the discourse on project governance pertaining to its definition, theoretical underpinnings, forms, and role in enabling organizational strategy implementation. Furthermore, a typology of projects is proposed to help link project governance guidelines to specific project contexts. Finally, future research directions for progressing the theoretical and practical understanding of project governance are identified.     

Identifying,framing and managing uncertainties in project portfolios

Uncertainties in the organization, external environment and from single projects may hamper project portfolio performance unless managed properly. This paper introduces a framework on uncertainties and their management in project portfolios and pursues increased understanding on how managers can take uncertainty into account better. We explore uncertainties, how managers frame them as opportunities or threats, and the actual practice of managing them across ten R&D project portfolios. The framework on project portfolio uncertainties and their management is further refined based on the empirical results. As key contributions, we show evidence on the balanced existence of three types of uncertainties, the threat bias in their framing, and the dominance of rational, opportunity driven mechanisms of control in uncertainty management. We discuss the context-dependent practice of project portfolio management and the need to complement rational mechanisms with structural and cultural, for project portfolio management to become a dynamic capability.     

Does project management matter? The relationship between project management effort,complexity, and profitability

The purpose of this study is to explore the causal impact of project management effort on project profitability (i.e., profit on sales) for varying degrees of project complexity in an engineer-to-order (ETO) project setting. We use a sample of 917 projects’ status reports of a large firm that offers ETO products coupled with a control function approach to empirically investigate the causal effect of project management effort on projects’ profitability. Furthermore, we investigate the marginal impact of project management effort and its effect for different degrees of project complexity. Our results reveal a positive but diminishing impact of project management effort on project profitability. Furthermore, we find that higher project complexity jeopardizes project profitability. However, project management's marginal impact increases with increasing project complexity, ultimately leading to higher returns of more complex projects. While previous research provided correlational evidence between project management and project success, this study is, to the best of our knowledge, the first to demonstrate a causal impact of project management on profitability. The results offer unique insights into the economic benefits of project management while taking into account the complexity of the projects. The study confirms the benefits of project management efforts regarding project profitability and underlines the high relevance of project management for complex projects, thereby underlining the importance of contingency theory. It shows that firms can compensate higher ETO customization and higher project complexity through higher project management effort.     

Why costs overrun: risk,optimism and uncertainty in budgeting for the London 2012 Olympic Games

The systematic under-estimation of costs in budgeting for large-scale projects raises the vexing question of why there are such incongruities between the projections made at initial stages and the eventual outturn cost. As a first step to understanding the sources of such budgeting overruns in the context of the Olympics, this research note outlines how the costs of the London 2012 Olympic Games were under-estimated in a series of budget forecasts, identifying sources of error and categorizing these according to the effects on budgeting of: (1) inattention to risk inside government; (2) biases in decision-making in the evaluation and use of information; and (3) uncertainty in project management and administration. These factors are accentuated through the planning and budgeting context, as estimates at different stages of the process serve alternative purposes and entail varying levels of knowledge and scrutiny.     

Project,program and portfolio management as modes of organizing: Theorising at the intersection between mergers and acquisitions and project studies

Although the management of mergers and acquisitions (M&As) and of projects are connected in practice, they remain disjoined in academia. In this paper, we conceptually bridge the literature on projects and M&As to discuss the transitory nature of organisations by mobilising the concepts of project, programme, and portfolio as alternative modes of organising M&As. As a project, the managerial effort in M&A focuses on completion on time and budget. As a programme, M&As are managed as complex processes of convergence between organisations. As a portfolio, M&A management is part of the ongoing integration efforts within organisations that have grown via M&As. Our contribution to project studies is to position projects, programmes, and portfolios as modes of organising, hence, not as phenomena but as managerial choices used to shape strategic change initiatives, such as M&As. We conclude with implications beyond project studies, thereby drafting a project-based theory of the firm.