Why do Some Projects Fail? It Comes Down to 3 Factors (and Excel)

Xergy Group
Digital Transformation project management Resource Management Scope Creep
Why projects fail - Proteus Project Software

Projects fail. All the time. According to the Project Management Institute’s (PMI) 2021 Pulse of the Profession report, a staggering 48%[1] of energy projects in 2020 were failures.

So it’s natural to ask: why do projects fail?

Back in 2007 the PMI’s researchers broke the reasons for project failure down into seven basic performance areas organisations failed to get right, which they then assigned to three main categories: people, process and communications. (We’re condensing down more than 4,000 words into a single sentence, so please do read the article if you want to know more.)

A staggering 48%[1] of projects in 2020 were failures.

Under the “process” and “communications” categories, the PMI listed the following:

  • Establish clear accountability for measured results.
  • Have consistent processes for managing unambiguous checkpoints.
  • Have a consistent methodology for planning and executing projects.
  • Focus on business value, not technical detail.
  • Include and involve the customer throughout the project.

On paper, and to those who aren’t skilled in the art of Project Management, these may seem easy to do. In practice, things can quickly get messy, lines get blurred, and projects “evolve” (31% of energy projects suffered scope creep in 2020 according to the PMI).

31% of projects suffered scope creep in 2020.

Along with scope creep, project failure is often blamed on a lack of resources. This might be skilled workers, assets, equipment, or software. Whatever is needed to get the job done. Precision resource estimation and allocation are key parts of any project plan and execution. This is where a disconnect between day-to-day project management and resource management becomes a real problem. If you are not on top of your utilisation rate versus what has been planned and approved (for which you need access to 100% accurate, up-to-date data) you will naturally run into difficulties. If inadequate or incorrect resources have been allocated in the first place, it is even more difficult to manage the required changes.

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The good news is technology can absolutely help with all these factors and keep projects on the path to success.

The bad news is the technology many (many, many) companies use is Microsoft Excel.

To be clear, it’s not that Excel is a bad piece of software. It’s just not built to run complex (or even basic) projects. It’s a tool that was built to help organise numbers and data, but even then it’s at the mercy of its operators. And these issues aren’t isolated to Excel – there are many cases of ill-suited tools being used to manage projects – but Excel is by far the most significant.

In the last decade, Excel-related blunders have cost JPMorgan $6 billion, leaked 36,000 Boeing employee records, scuppered a $9.5m construction bid, lost 15,841 UK Covid-19 cases, and doubled the number of tickets available for the London 2012 Olympics.

The European Spreadsheet Risks Interest Group maintains a running list of spreadsheet horror stories. (They also estimate around 90% of all spreadsheets contain errors.)

90% of all spreadsheets contain errors.

Now these are just the problems we know about – organisations around the world have their own Excel-related SNAFUs which never go beyond their walls. But here’s the worst bit: even when everything in a spreadsheet works as intended, with no human error, it’s still bad at project management.

Excel-related blunders have cost JPMorgan $6 billion.

The Boeing and UK Covid examples are perhaps the best to look at in this context. In the Boeing case, an employee at the firm emailed a copy of a spreadsheet to his spouse, as an example of a formatting template – unfortunately, he didn’t realise it also contained 36,000 employee records.

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It was foolish of the employee to send those records out – but the bigger question is, why was it possible in the first place? Why was the data so easily accessible? And so easily shareable?

Same for the UK’s Covid blunder, which was due to the old .xls spreadsheet format in use not having enough rows for the data being copied into it. Again, why were UK government officials copying and pasting crucial data from one spreadsheet to another? Where were the controls to protect the data?

There are no good answers to these questions, but one bad one is clear: the temporary convenience of using a tool available on most, if not all computers, (in this case Excel) was too hard to resist.

For projects to succeed organisations must invest in suitable tools and technologies needed to allow ‘project control’ by project members, managers, and owners – ones which can help with accountability, processes, methodology, business value and communication, ones which are fit for purpose and which work well with the spreadsheet tool you use for your (hopefully) spreadsheets.

….And maybe also ones which don’t turn genes into dates, because, according to the article, ‘sometimes it’s easier to rewrite genetics than update Excel’.

Alternative solutions don’t need to change the way you do business or disrupt your day to day, but they can certainly improve it.

There is a better way.

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About us

Xergy Group’s Proteus work management solution is designed to work with your existing systems, and to scale and evolve as your business evolves. It was created by energy sector professionals, for the diversified energy sector, and delivers an end-to-end project management software platform compliant with ISO audit requirements and common project management frameworks.

How to get Proteus

Proteus’ work management software is a cloud-based system designed for businesses of all sizes to handle projects of unlimited complexity. Each Proteus feature is aimed at making bottom line improvements by improving utilisation, streamlining workflows, providing quick and efficient access to resources and reducing overheads. One of the unique advantages of Proteus is that we offer a free onboarding consultation service to ensure your company account is set up according to your company’s needs.

We recommend getting setup on a free trial. Proteus operates under a software-as-a-service (SaaS) model. We offer Enterprise packages and flexible pricing solutions: contact our team to learn more.

We designed Proteus to be simple, and that means you can get up and running on Proteus without an IT team or support from a programmer. You will want to spend a bit of time configuring the admin console so that you have everything set up to suit your company structure, but it’s very intuitive and you don’t need a PhD in IT. However, we want you to get the best out of what is a brilliantly powerful tool, so don’t hesitate to ask for our support. We have a team of product experts who are ready to help you with the configuration process, so get in touch today.

 [EB1] this figure comes from summing two figures from the report: “Failed project, budget lost” and “Failures”.

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