subject: Why Projects Fail? Part 6 [print this page] Using the Business Case wisely: the C-NOMIS case study
(This is part 6 of a series of 10 posts: Why projects fail?)
This article deals with the sixth of the OGCs eight causes of project failure: evaluation of the Business Case is driven by initial price rather than by value for money.
The NAO report pronounced this factor to be only partially the case on the C-NOMIS project. According to the original C-NOMIS Business Case, the project should have created a positive net present value. However, the serious underestimation of costs, combined with alarming scope creep meant that the projects value for money swiftly became dubious. Meanwhile, inadequate communication between the different levels of project and programme management prevented regular review of the Business Case. This meant that the project was allowed to continue long after it ceased to have business justification.
Perhaps more worryingly, the newly redefined project scope is openly intended to minimise investment, at the detriment to the projects value for money. In other words, the project will overrun its cost constraints by a smaller amount, but will not deliver products equal to the investment.
Summary and solutions
Real projects are never as simple as methodological models, as NOMSs decision regarding the re-scoping of the project amply illustrates. Best practice guidance and project management methods provide clear and simplified frameworks for carrying out projects successfully; however, these frameworks cannot cover every possible situation and combination of situations.
It is crucial that project management frameworks should be applied thoughtfully, with due consideration of what will happen if the guidance is/is not followed. The new PRINCE2 training course, running from July 2009 contains a section on tailoring PRINCE2 for the specific context and environment of the project that is being managed.
Looking ahead
Focusing on the initial price, rather than on value for money can undermine the business justification of a project. In my next post I am going to examine the seventh of the OGC causes of project failure failure to understand or collaborate with suppliers at senior management levels.
