Description of Project Review and Recovery: Organizations spend a lot of money on projects. The average firm closed $200 million in projects last year (155 projects at $1.3 million per project on average for each firm).
More than a third (37%) of those projects were troubled and at risk of failure. That means $74 million in projects were at risk of failure for each firm, on average.
- 12% of these projects failed ($24 million per firm on average).
- 25% or these projects were recovered ($50 million per firm).
- Large firms had a significantly higher percentage of recovered projects than small and mid-size firms (32% of large firm projects vs. 22% for small firms and 18% for mid-size firms)
Significant factors that affected the likelihood of success in recovering these troubled projects include whether the firm had a standard project management methodology or a project recovery process, the size of the firm, and the industry of the firm.
The Good News. Project recoveries are common. Nearly three quarters (72%) of firms surveyed had a project recovery intervention in the past three years.
Project Recovery: Although it is usually senior management that makes the decision to actively intervene in a troubled project to recover it, it’s the project manager who usually leads the execution of the recovery process. In some cases, the project manager is often replaced with a new project manager or consultant, someone more experienced to head the recovery effort. In any case, project recoveries are highly successful once firms decide to focus on addressing the issues that caused the project to become troubled in the first place.
The top five actions most often taken in a project recovery intervention are:
- Improving communication & stakeholder management (62%).
- Redefining the project—reducing the scope, re-justifying the project financially (60%).
- Adding and/or removing resources (58%).
- Resolving problematic technical issues (49%).
- Replacing the project manager or bringing in a consultant to manage recovery (36%).