Why So Many Corporate Projects Fail
Did you know 70 percent of corporate projects fail? That’s not the only statistic that’s shocking. Only 2.5 percent of companies successfully complete all of their intended projects. And as a result, the failure of IT projects costs the US economy about $50-$150 billion each year.
We live in the digital age where communication is facilitated and information travels fast. So why are these projects failing?
According to Mirza Baig, CEO of SAF International, a New York consultancy, there is a systematic flaw preventing success.
“There are all sorts of statistics you can find covering the reasons why the percentage of failed project is so high, including poor planning, poorly defined scope, and poor communications,” said Baig. “Though these things do contribute, the underlying problem is accountability.”
The system today is set up to fail. The finite nature of projects lends itself well to contractual work. If a company doesn’t assign an internal Project manager to manage the project, they often use a staffing agency to hire a contracted project manager, putting their strategic (often multi-million dollar) project in the hands of a temporary worker. In both of these cases, accountability is hard to pinpoint. When a project gets delayed, there is really no one to hold accountable
Mirza Baig is leading a simple revolution in project management by doing the unheard of: taking the risk. His consulting company, SAF International, works solely on the model of Performance Based Service Delivery. They use long term contracts to guarantee that any pre-determined deliverables (including schedule, cost, scope, etc.) will be met. If not, they stand to reimburse the daily pro-rated cost until the project is complete. SAF is the only company in the industry to offer this kind of service. It’s not surprising that armed with this motivation SAF has an over 97 percent success rate.
“When we take on a project, our clients are hiring a company, and not an individual to complete the project, says, Baig.
In this model, every initiative should be (and in most cases, it is) tied to the overall corporate or departmental strategy. If a project is not completed within the constraints, the strategy loses its effectiveness and adversely impacts an organization’s growth and bottom line.
Baig believes this model of project management will shift accountability and soon reduce the number of failed projects. He warns other consultants they must also learn to evolve or they may be left behind.