How many times have you heard this statement lately? – Probably quite a lot.
When a company faces challenges, either internal, external or even global, that they believe put a project at too much risk, they have to make a decision: whether to proceed with the project, to cancel it or to put it on hold. The decision to proceed further or cancel is serious and requires analytical work, strong expertise, weighting risks and benefits and of course entails responsibility.
If you cancel the project, then the stakeholders, especially the key sponsors, will not receive their highly anticipated product or service. If you cancel the project before any money is spent, the impacts are minimal. Your customer maybe have wasted time, but they did not waste money. If the project gets cancelled when a substantial portion of the budget has been spent, or some budget remains at the end of the fiscal year but it cannot be re-allocated to another initiative, then impacts are higher. This may imply penalties, broken trust, customer dissatisfaction or even people being fired and laid off.
Of course, there are many situations where projects are given a “trial” phase followed by a “go/no go decision”, in which case the cancellation is a legitimate option, but I would like to focus on “unexpected” enterprise decisions.
In contrast, moving ahead with the project when the risks are too high is a very challenging decision. It requires a lot of risk management work, such as risk qualification and quantification and very detailed and thought-out risk response planning.
As we know, just over 30% of all projects are successful, so if the decision maker is constantly given a “no go” option, they must be really motivated not to use it even once.
So would “putting a project on hold” be a smart management decision? Well, in some situations, a project really cannot move forward until a certain external condition that is vital to its completion and has changed lately is restored. For example, a car factory has always relied on a tire producer that went bankrupt. So until they find another vendor, they cannot move ahead with the project. In this case, putting the project on hold but working actively on vendor replacement is understandable. But how many times do organizations put projects on hold because they cannot balance business priorities or cannot analyze the impacts of their decisions?
With today’s COVID-19 situation, projects are being put on hold without too much consideration. Managers jump to conclusions around business continuity when most of their employees are working online. Rather than doing some analytics and moving ahead, they simply say “well, now it is not the best time... too many unknowns... let us think about it when the situation gets better”. As a result, industries suffer much greater impact than they would if organizations could invest some effort in preserving business continuity and keeping their projects going.It takes some deeper risk analysis, proper financial planning and resource leveling.
Here at PMAID Consulting Group, we know how to manage risks and to address bottlenecks. Do not hesitate to contact us if you are looking to reanimate your projects, while working remotely.