ANALYSIS OF THE PROBLEMS REPORTED IN ANGLO-SAXON STUDIES

Based on the different documents that we were able to examine, mostly relating to data-processing projects (see also the Chaos Report quoted in bibliography of “pathological projects” ) it was shown that in the United States between 1994 and 1999, the percentage of projects having adhered to their initial budgets and deadlines was lower than 26% and that the percentage of failed projects varied between 31% and 26%.

Many specialised documents propose examples of failed projects or projects having had large delays and cost overruns, but “the Chaos report” is to be commended for providing extremely solid and undeniable statistical data.

Unfortunately these studies don’t distinguish clearly if the delays, the failures and the cost overruns are inevitable structural phenomena or if these same phenomena could have been avoided using known methods and procedures, that the people involved in these projects did not know or did not want to implement.

For the moment we will not draw any hasty conclusions, but rather we will make a distinction between the phenomena analysed on the site “the pathological projects” and the phenomena analysed here on the present page.

One cannot say that the American economy is missing dynamism. We will therefore try to understand the reasons behind such results in an already healthy situation, while at the same time being aware that there is not one or several reasons but a whole multitude of contributing factors.

Perhaps you will remember that we criticised - in the above Introduction - those who apply American statistics to the European situation. However we ourselves will have to now take the same short cut, albeit in the other direction, that is to say to apply our knowledge of Europe to the situation in the USA. Our approach being therefore limited, we hope that it will be analysed and criticised with a view to improving it

THE TECHNIQUE IS TOO “NEW”: AN OLD ARGUMENT... TO JUSTIFY DOING NOTHING

Many studies excuse the mishandling of present day projects by arguing that the projects are themselves based on new technologies and techniques, thus everything is new and everyone is victim of the learning curve. It is very possible that the same arguments were used by the builders of the Tower of Babel.

Progress is explained as a process of attempts and fumblings, the majority of which result in nothing and are abandoned thereafter; but experience is gained through a process of discernment and review, consolidation and standardisation. To excuse the problem by seeking refuge in the “newness” of current technologies means nothing and lacks in intellectual honesty.

Over the last few centuries an ever increasing gap has been widening between the skills of the providers of goods and services and those of the end users:

Providers of goods and services have progressed by calling upon an increasingly wide theoretical knowledge and an increasingly complex and rigorous manufacturing methods;
The End users have tried to fill the gap by ever more elaborate procedures, standards and tests, in order to guarantee that the products acquired actually work as they are meant to, without actually needing to know how in fact they work.

These two above developments are the result not of one long continuous process but have come about by a series of stops and starts, learning the consequences of the new technology, appreciating the gains and advantages, but also discerning the shortcomings and the disadvantages.

It would seem that ours is an as yet uncompleted journey through an era marked by the ever-widening gap suppliers and the customers, all because the necessary actions weren’t taken in the pre-computer age.

In certain industries, in general those of the mass production, the cost calculation of any new production is very accurate, this being principally due to the improvements in the way estimates are drawn up.

In other industries, which we will term “cutting edge”, any new production is in fact “innovative”, a mixture of consolidated technology and of innovative research. In such cases, the risk factor of things going wrong is higher. Most data-processing projects belong to this category.

The electronics revolution dates back over a hundred years. Taylorism –based on the scientific breaking down of production processes - had its hour of glory in the mechanical engineering industry, but was only partially applicable to this new technological branch of electronics, of which data processing is an offshoot.

It should also be noted that anti-Taylorism, in fashion today, and which consists in giving “more autonomy and responsibilities” to technicians and workers, allows certain managers to transfer their own responsibilities onto their subordinates and thus be tempted, even more so than in the past, to take on commitments that prove afterwards to be inappropriate, unrealistic and unachievable.

We believe that the statistics of “the Chaos report” could well be applicable, not only to today's projects, but also to electronics industry projects that go back over seventy years and more.

One of this site's authors knows of many projects undertaken in various prestigious industries, none of which stayed within budget and all of which resulted in costs being at least the double of those estimated. In one case, going back fifty years, the final cost exceeded 3000% of the initial budget.

In terms of technological innovation, we are thus speaking of “newness” as being one hundred years old

Data processing, an offshoot of the electronics industry, inherited the methods, and likewise certain shortcomings, of the same industry when it came to conducting projects. Such a situation, that has already been in existence for one century, deserves to be examined.

One could ask a question at this stage : would a lengthening of the planning time-scales of the various data-processing projects analysed in the Chaos report , really have made it possible to reduce the final cost ?

With today’s knowledge and practices, would more reasonable forecasts have been possible that would have avoided the waste linked to the successive re-jigging of plans and budgets?

We would argue that this question ought to be asked but only serious statistics drawn from the past would help us to answer it.

According to our reading of the report, one of the studies of the Standish Group argues that in a project it is more important to proceed in a healthy manner than to calculate precise estimates. (“Learning to work better with poor estimates rather than developing better estimates is crucial.”). This is always true ; but the lack of care shown by certain managers when it comes to establishing reasonable estimates is precisely a way of not “working better”.

DIALOGUE DIFFICULTIES BETWEEN CUSTOMERS AND SUPPLIERS

For some time now we have been going through a stable transitional period where on one hand the customers are unable to define their needs correctly and know little about what the suppliers can actually do for them, and on the other hand the suppliers do not have efficient tools with which to estimate the costs of products that are requested from them.

Data-processing projects are still largely of the “tailor made” variety whereas “ready to wear” packages are still the exception. Every company wants their own data-processing system. And it is not unusual to find within the same company several data-processing systems that cover more or less the same needs and are the result of Frankenstein like pulling together of partly in-house and partly external developments made by suppliers faced with endless changes requested by the customer.

In most companies, the Information Systems Department has an hybrid role, divided between the development of internal projects and support to users in the drafting of user requirements when dealing with external suppliers. It should be also noted that the employees working in these Information systems departments rarely come from Silicon Valley or MIT.

Often the supplier, once aware of the hazy and imprecise environment in which his customer operates, accepts unrealistic deadlines. He then waits patiently for the client’s requests for changes and corrections in order to readjust the prices and the schedules accordingly ; this is a current practice but a risky one because a project can purely and simply die under an avalanche of changes.

It also happens that customer demands for innovations push suppliers to put on the market unreliable products that result in additional cost and waste. Suppliers are not beyond creating needs for new software. So much so that one can wonder sometimes if the pyromaniac and the fireman are not one and the same person.

THE UNDOING OF THE LAWS OF COMPETITION

We argue that even today the majority of projects go off course, and that the normal economic laws of competition seem to have been out manoeuvred and rendered inoperative by a generalised trend of overrun project costs and the frequent absence of market mechanisms sanctioning inefficient organisations.

On the page dedicated to Mary Stuart on the first site, we referred to the trinomial “action-reward-sanction”; it seems that even in an highly developed economy like the United States, the market as yet does not isolate and sanction bad managers.

Should one be pessimistic ? Not at all : the statistical analysis that has been conducted on this type of phenomena, in particular in the United States, indicates that there is nevertheless a will to progress towards greater precision and greater efficiency.

However there is a hard core of organisations unwilling to change and which persist in applying their “methods”.

CONCLUSION

From the above we can draw the following conclusions:

The inevitable (the good) : part of the overrun costs and errors are due to the intrinsic nature of a continuously developing economy. This leads to studies and experiments that inevitably generate waste of time and money. But this is the price we pay for progress and innovation. In these cases, one cannot really talk about over run budgets or deadlines.

The “Can do better” (the bad) : another reason for overrun costs is the non application, or simply the non-existence of “best practices”. This is where specialists can add value.

The pathologic (the ugly) : for a whole series of as yet unclear reasons, and going back let us say one century) there are managers (or organisations) that find it much more useful and profitable not to implement “best practices”. In such cases the specialists and their methods are rendered useless. We're talking here about a phenomenon of society which relates to education, culture, research and sometimes even... to justice.

What we have just said might well appear obvious, but please bear with us. Our lengthy, painful and quite incomplete experience of texts written by specialists has convinced us that neophytes like ourselves can miss the obvious and quickly loose themselves in complicated studies. Besides, we had to take a look at the United States before taking a closer and more informed look at Europe. Brace yourselves !

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