Project Schedule Risks – Causes and Solutions
Roughly half of projects finish behind schedule (and many end up over-budget too). Given the importance of projects to businesses and the risks associated with missing deadlines, what accounts for the tendency for projects to run longer than originally estimated?
As it turns out, there are a lot of reasons why projects might not meet schedule objectives. Many of these are behavioral. For example, one researcher identified several behavioral reasons why schedules are underestimated, among which include:
- omission of essential but non-value-added administrative tasks such as documentation
- unanticipated errors such as product rework
- overconfidence in the project manager’s ability to estimate durations correctly
- multitasking which causes switching delays
- project managers might not report early completion out of fear that next time the expectations will be higher (1).
Other behavioral/psychological reasons include the “planning fallacy” which says that an individual tends to be over-confident that their particular project will proceed as planned despite the available evidence of similar, analogous projects running late (2). Another psychological trap is the “student syndrome” – the phenomenon where people delay starting a task until the deadline is close, resulting in tasks filling in the available time instead of being finished early.
Beyond behavioral issues, there are a host of other threats to a project – bad weather, funding issues, unanticipated software bugs, clients changing the scope, and so on. The possibilities are almost endless – meaning that for your project’s schedule, “from the minute timelines are created, they are wrong” (3).
So what can be done?
The solution is to conduct risk analysis. Project risk analysis helps by first identifying the relevant risks and entering them into a risk register or a risk breakdown structure, which is a nested hierarchy of risks (4). After that, risks need to be quantified in terms of likelihood and consequences, and there are a number of methods which can be used to assist in this process. The quantified risks can then be ranked in order to prioritize risk management actions to make sure that the impacts of the risks to the project (and ultimately the organization) are minimized.
The goal of project risk management is to take a structured and rigorous approach to the identification of risk sources (sometimes referred to as hazards or threats) and the assessment of the impacts that those risk sources will have on the actual project in terms of important KPI’s like expected schedule delays, cost overruns, and quality degradation.
It pays to take a proactive posture to project risks rather than always being in reactive mode. A company cannot effectively negotiate risks that they haven’t planned for – which is why project risk analysis is so important. Whether it is implementing programs and practices to avoid the behavioral aspects mentioned above, or to build in contingencies and slack into the project to avoid schedule disruptions, there is no substitute for a good risk analysis carried out with the guidance from an expert.
At Collier Research Systems, we can support you with your project risks – from identification to management. Using state-of-the-art risk analysis methods, we can help your most important projects be successful, resulting in value for your company. To learn more, visit: www.collierresearchsystems.com.
(1) Leach, L. (2003). “Schedule and cost buffer sizing: how to account for the bias between project performance and your model.” Project Management Journal, 34(2): 34-47.
(2) Kahneman, D., and Tversky, A. (1977). “Intuitive Prediction: Biases and Corrective Procedures.” Technical Report PTR-1042-7746, Defense Advanced Research Projects Agency.
(3) Yakura, E.K. (2002). “Charting time: timelines as temporal boundary objects.” The Academy of Management Journal, 45(5): 956-970.
(4) Hillson, D. (2003). “Using a risk breakdown structure in project management.” Journal of Facilities Management, 2(1): 85-97.