What are the determinants of project success?
Definitions of successful projects can be surprisingly elusive. How do we know when a project is successful? When it is profitable? If it comes in on budget? On time? When the developed product works or sells? When we achieve our long-term payback goals?
Generally speaking, any definition of project success must take into consideration the elements that define the very nature of a project: that is, time (schedule adherence), budget, functionality/quality, and customer satisfaction.
At one time, managers normally applied three criteria of project success:
- Time. Projects are constrained by a specified time frame during which they must be completed. They are not supposed to continue indefinitely. Thus the first constraint that governs project management involves the basic requirement: the project should come in on or before its established schedule.
- Budget. A second key constraint for all projects is a limited budget. Projects must meet budgeted allowances in order to use resources as efficiently as possible. Companies do not write blank checks and hope for the best. Thus the second limit on a project raises the question: Was the project completed within budget guidelines?
- Performance. All projects are developed in order to adhere to some initially determined technical specifications. We know before we begin what the project is supposed to do or how the final product is supposed to operate. Measuring performance, then, means determining whether the finished product operates according to specifications.
The project’s clients naturally expect that the project being developed on their behalf will work as expected. Applying this third criterion is often referred to as conducting a “quality” check. This so-called triple constraint was once the standard by which project performance was routinely assessed. Today, a fourth criterion has been added to these three…..
Client acceptance. The principle of client acceptance argues that projects are developed with customers, or clients, in mind, and their purpose is to satisfy customers’ needs. If client acceptance is a key variable, then we must also ask whether the completed project is acceptable to the customer for whom it was intended. Companies that evaluate project success strictly according to the original “triple constraint” may fail to apply the most important test of all: the client’s satisfaction with the completed project.
We can also think of the criteria for project success in terms of “internal” vs. “external” conditions. When project management was practiced primarily by construction and other heavy industries, its chief value was in maintaining internal organizational control over expenditures of money and time. The traditional triple-constraint model made perfect sense. It focused internally on efficiency and productivity measures. It provided a quantifiable measure of personnel evaluation, and it allowed accountants to control expenses. More recently, however, the traditional triple-constraint model has come under increasing criticism as a measure of project success.
The final product, for example, could be a failure, but if it has been delivered in time and on budget and satisfies its original specifications (however flawed), the project itself could still be declared a success. Adding the external criterion of client acceptance corrects such obvious shortcomings in the assessment process.
First, it refocuses corporate attention outside the organization, toward the customer, who will probably be dissatisfied with a failed or flawed final product. Likewise, it recognizes that the final arbiter of project success is not the firm’s accountants, but rather the marketplace. A project is successful only to the extent that it benefits the client who commissioned it.
Finally, the criterion of client acceptance requires project managers and teams to create an atmosphere of openness and communication throughout the development of the project. Consider one example.
The automaker Volvo has been motivated to increase its visibility and attractiveness to female customers, a market segment that has become significantly stronger over the years. The company’s market research showed that women want everything in a car that men want, “plus a lot more that male car buyers never thought to ask for,” according to Hans-Olov Olsson, the former president and CEO of Volvo. In fact, Volvo discovered, in Olsson’s words,…….
Volvo’s solution was to allow hundreds of its female employees, including an all-female design and engineering staff, to develop a new-generation concept car. The group studied a variety of vehicle aspects, including ergonomics, styling, storage, and maintenance, keeping in mind the common theme: What do women want? Code-named the YCC (Your Concept Car), the car is designed to be nearly maintenance free, with an efficient gas-electric hybrid engine, sporty styling, and roomy storage. Volvo’s efforts in developing the YCC project demonstrate a commitment to client acceptance and satisfaction as a key motivator of its project management process, supplanting the traditional triple-constraint model for project success.
An additional approach to project assessment argues that another factor must always be taken into consideration: the promise that the delivered product can generate future opportunities, whether commercial or technical, for the organization.26 In other words, it is not enough to assess a project according to its immediate success. We must also evaluate it in terms of its commercial success as well as its potential for generating new business and new opportunities.
The Figure shown illustrates this scheme, which proposes four relevant dimensions of success:
- Project efficiency: Meeting budget and schedule expectations.
- Impact on customer: Meeting technical specifications, addressing customer needs, and creating a project that satisfies the client’s needs.
- Business success: Determining whether the project achieved significant commercial success.
- Preparing for the future: Determining whether the project opened new markets or new product lines or helped to develop new technology. This approach challenges the conventional triple-constraint principle for assessing project success.
Corporations expect projects not only to be run efficiently (at the least) but also to be developed to meet customer needs, achieve commercial success, and serve as conduits to new business opportunities. Even in the case of a purely internal project (e.g., updating the software for a firm’s order-entry system), project teams need to focus both on customer needs and an assessment of potential commercial or technical opportunities arising from their efforts.
Assessing Information Technology (IT)
Project Success As we noted earlier in this chapter, IT projects have a notoriously checkered history when it comes to successful implementation. Part of the problem has been an inability to define the characteristics of a successful IT project in concrete terms. The criteria for IT project success are often quite vague, and without clear guidelines for project success, it is hardly any wonder that so many of these projects do not live up to pre-development expectations.
In 1992 and again in 2003, two researchers, W. DeLone and E. McLean, analyzed several previous studies of IT projects to identify the key indicators of success.
Their findings, synthesized from previous research, suggest that, at the very least, IT projects should be evaluated according to six criteria:
- System quality. The project team supplying the system must be able to assure the client that the implemented system will perform as intended. All systems should satisfy certain criteria: They should, for example, be easy to use, and they should supply quality information.
- Information quality. The information generated by the implemented IT must be the information required by users and be of sufficient quality that it is “actionable”: In other words, generated information should not require additional efforts to sift or sort the data. System users can perceive quality in the information they generate.
- Use. Once installed, the IT system must be used. Obviously, the reason for any IT system is its usefulness as a problem-solving, decision-aiding, and networking mechanism. The criterion of “use” assesses the actual utility of a system by determining the degree to which, once implemented, it is used by the customer.
- User satisfaction. Once the IT system is complete, the project team must determine user satisfaction. One of the thorniest issues in assessing IT project success has to do with making an accurate determination of user satisfaction with the system. Yet, because the user is the client and is ultimately the arbiter of whether or not the project was effective, it is vital that we attain some measure of the client’s satisfaction with the system and its output.
- Individual impact. All systems should be easy to use and should supply quality information. But beyond satisfying these needs, is there a specific criterion for determining the usefulness of a system to the client who commissioned it? Is decision making faster or more accurate? Is information more retrievable, more affordable, or more easily assimilated? In short, does the system benefit users in the ways that are most important to those users?
- Organizational impact. Finally, the supplier of the system must be able to determine whether it has a positive impact throughout the client organization. Is there, for example, a collective or synergistic effect on the client corporation? Is there a sense of good feeling, or are there financial or operational metrics that demonstrate the effectiveness or quality of the system? DeLone and McLean’s work provides an important framework for establishing a sense of IT project success. Companies that are designing and implementing IT systems must pay early attention to each of these criteria and take necessary steps to ensure that the systems that they deliver satisfy them.