Project Readiness Reviews and Why They Are Important
Current studies have shown that:
- 65% of Mega projects fail
- 35% of projects worth less than $500M fail
Failure is defined as:
- Running overtime by 50%
- Going over budget by 25%
- Having significant operational problems into the second year of operation
Causes of Poor Project Performance
- Over optimism and over complexity
- Poor execution
- Weakness in organisational design capabilities
Consequences of Poor Project Performance
- Delayed cashflow and recovery of invested capital
- Increased capital outlay
- Projects may not produce the expected outcome
- Negative impact on brand
Actions Going Forward
- Accept the current under achievement
- Ensure sufficient contingency in budgets to allow overruns and underperformance of assets
- Implement readiness reviews and ongoing health checks to ensure that the study or project is properly armed to meet the challenges ahead
