According to statistics released by The National Audit Office, two thirds of public sector projects are completed late, over budget or do not deliver the outcomes expected. Most projects due to be delivered in the next five years, have already been announced to be completely unachievable. But unfortunately, this problem is not just within the public sector, as research conducted by a number of academics, professional bodies and consulting companies have found that most investment projects fail by definition, taking into account delays and over expenditure. This doesn’t necessarily mean they never come to fruition, but it does mean a severe delay in ROI, which as a savvy investor is something you never want to hear.

It’s a global issue, across multiple sectors, and one which needs to be addressed if there is to be the vast economic development we hope for in the next generation. But getting to the core of why these projects are failing is the only way in which a solution can be found.

Timescales

There’s a common trend of being overly optimistic with timescales when it comes to project development of any kind. And whilst people may be giving you a glowing projection that rings all the bells and whistles, you have to be the pessimist in the room that asks the hard questions. Targets and timelines for your projects will need to be clarified, and if they fail to deliver when promised you need to prepare for that failure. If you cut a loss how is that going to affect you and your business, and is a loss even possible?

Identifying risk

There is uncertainty in every investment that you make, no matter the project, there is no such thing as a fail safe. As every project is unique, it is essential that you take each investment on a case by case basis and proactively anticipate the things that might go wrong. Knowing your risks and how to respond to them should they occur, ensures that your project has a strong strategy that will see it through any delays.

Unreliable estimates

Most investment projects fail to realise their forecasted benefits, and once the project goes from idea to reality, the costs significantly increase. This will be down to unreliable estimates or ‘guestimates’ as they’re often called, but this does not need to be the case, with many current financial systems on the market that can help you to create reliable investment appraisals such as Invest for Excel, a best practice can be implemented and risks quickly identified.

The planning process plays the key role in the deterring failure from the word go. There are multiple causes of failed projects, each with it’s own set of issues, but as clearly identified in the statistics that have been revealed, common mistakes are strongly contributing to a process which by now, should work without delay.

This post is sponsored by Data Partner. For more information, visit www.datapartner.fi