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Project failures are far more common than is commonly admitted but to some degree this is a result of portfolio managers not being aware of what constitutes failure. We explore this topic here to clarify this matter.

The word failure is used to indicate a lack of success, inadequate outcomes resulting from the neglect or omission of required design elements or of expected or required actions.

Although the lack of success or failure of a project might be laid at the feet of a project team manager or team, in almost all cases of perceived failure the cause is a failure of the design process. In the context of OQSI, the process is the project cycle and portfolio management system.

The main process failures include:
  • Failures to anticipate changes and associated outcomes that occur during implementation
  • Failures to analyse the full range of project options resulting is a lack of perception or comprehension of the implications of the project model
  • Failure to complete specific tasks
All of these process failures relate to project design deficiencies resulting in less than optimal design and lower than feasible. So, for the donor who uses a defective project cycle and portfolio management system the perception can be that a project has been successful because it is complete on time, covering intended scope and within budget. However, deficient design can results in project objectives being set at a level well below what is achievable. On the other hand over-ambitious proposals inevitably result in disappointments for stakeholders and others.

The purpose of due diligence procedures is to avoid failure arising from deficient design by making use of procedures, each with well specified information requirements and analytical methods, covering the whole cycle in a step-wise but re-iterative fashion. The outcome is a design process that generates precise Logical Process Options (LPOs) that contain all of the anticipated changes and impacts a project might face during implementation accompanied by decision support for those occasions when the anticipated changed take place during implementation. Overall the objective is to minimise the likelihood of the types of failures outlined above, from taking place.

On the topic of the financial cost of project failures, the rough estimate on the annual global aid budget of US$ 215 billion (OECD) is of the order of US$ 75 billion. A detailed bassi for this calculation will be posted in this section in due course.