The Key Factors that Determine Success of any Project - Essay Example

Introduction Factors outside the control of management that determine the success or failure of a project are known as critical success/failure factors. When projects overshoot time or budget, or when it does not meet the initial requirements, it is said to be a failure. Project success is perceived differently by the parties involved which makes it difficult to understand whether a project has met with success. Besides, the factors that are critical to success also different from industry to industry. Belassi and Tukel (1996) contend that a combination of many factors at different stages of the project life cycle result in project success or failure. This paper will review the literature on what are the key factors that determine success of any project. Literature Review Definition The term success factor itself has been defined different by different researchers. While Clarke (1999) refers to it as ‘key success factors’, Belassi and Tukel (1996) call it the critical success/failure factor. Cooke Davies (2002) calls them merely ‘success factors. According to Torp et al. (2004, pp2) noticed “CSFs to projects moved from a mechanistic approach to success determination which was relying on purely technical system and the traditional Cost-Time-Quality constraints to a combination of social and technical systems”. Cooke-Davies further clarifies that project success is more difficult than project management success because the goals and methods are liable to change. Project success is measured against the overall objectives of the project while project management success is measured against the cost, time, quality and performance. Cooke-Davies further distinguishes between success criteria and success factors. People also differ on the number of success factors that are critical for project success. Daniel (1961), in an article published in Harvard Business Review, highlighted the type of information needed to support top management activities. He recognized the significance of non-financial data in order to achieve organizational goals and suggested that an organization’s information system should be centered on providing three to six success factors that help an organization achieve success. Rockhard in 1979 defined critical success factor (CSF) as the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization (ESCC, 2006). He stressed that CSFs are the few key areas which have to be just right for the organization to flourish and for the manager to achieve his goals. Project success According to Ashley et al., project success is achieved when the outcome exceeds expectations or beyond what is normally observed in terms of cost, schedule, quality, safety and participation (cited by Nguyen, Ogunlana & Lan, 2004). When the key stakeholders and the key people involved in the project feel a great level of satisfaction, the project is aid to be a success. CSFs have also been defined as few of those things that must go well to ensure success for a manager and the organization. Baker at el., contend that if projects do not meet the timescales and budget they are deemed as failures but they can still be a success. They view perceived success as important to eventual success. The stakeholders need to assess both the project and the process before determining the success of failure of a project (cited by Wateridge, 1998). Success according to Morris and Hough means that project must deliver functionality, meet the budget, timelines and technical specifications, be commercially profitable for the contractor and in the event of cancellation it must be on a reasonable basis (cited by Wateridge). The success of the project in some cases can be judged only at the end of the project but in some cases it can be assessed throughout the duration of the project. According to Turner a project must provide benefit to the owner and meet the needs of the team members of the project. Kerzner agrees with the criteria set by Morris and Hough but adds that the project must be completed without changing the corporate culture, without affecting the work flow of the organization. Project manager as a critical factor The project manager and his experiences are also a critical factor. More important than the previous experience is the size of the project previously managed by the project manager (Belassi & Tukel). The characteristics of the project, the characteristics of the team members and the factors external to the project cannot be ignored. Lee-Kelley and Leong found that project manager’s emotional intelligence influences their perception of success (cited by Mueller & Turner, 2007). Research suggests that project manager’s leadership style influences project success. Simultaneously, different leadership styles have to be adopted for different projects. The project manager need not focus on linking the project to the business objectives but focus on the task itself, say Muller and Turner. Nguyen, Ogunlana & Lan (2004) contend that project managers should have the ability to lead change, they must possess functional competencies like technical and human resource management skills, they should be able to motivate and be persistent. They must have other characteristics like team building, communicating, demonstrating trust, and focusing on results. Hence, a project manager should not only possess skills but also be a good leader to bring about success of any project. Factors dependent on project types While medium complexity projects require emotional resilience and communication, high complexity projects require sensitivity (Mueller & Turner). This translates into transformational leadership. Motivation is important in repositioning projects while self-awareness and communication is essential in renewal projects. Conscientiousness and communication are critical to all projects and throughout the life cycle. At the design stage managing resource is important whole motivation is required at the commissioning stage. Engineering projects require consciousness and information systems projects require self-awareness and communication. Organizational and business projects require communication and motivation. In the construction industry the factors critical to success are different. The success for a given project participant is the degree to which the project goals and expectations are met. These may include technical, financial, educational, social or professional aspects. According to Chua et al, the objectives of budget, schedule and quality are key measures that lead to success (cited by Nguyen, Ogunlana & Lan, 2004). The success of each of these objectives depends upon four aspects which include project characteristics, contractual arrangements, project participants, and interactive process. Sanvido et al., specify four CSFs for the construction industry. These include a well organized and cohesive facility team, working as a team without conflicts, prior experience in similar facilities and timely, valuable optimization information from related parties in the planning and design phases (cited by Nguyen, Ogunlana & Lan). Research suggests that the five most critical success factors for the construction industry are competent project manager, competent project team, adequate funding, commitment to project and availability of resources. Pinto and Slevin found ten factors critical to the success of R&D projects (Clarke, 1999). As far as change projects are concerned, four factors were identified as critical, which include communication through out the project, clear objectives and scope, breaking the project into small units which makes it easier to handle, and using project plans as working documents. Cooke-Davies points out nine factors critical to success of projects. In the IS/IT sector project success depends upon time, cost, user satisfaction and the impact on computer operations (Powers & Dickson, cited by Wateridge, 1998). Some others include technical performance while some feel meeting quality levels and post-audit analysis are the criteria of success. The project managers tend to concentrate on the process, time and budget frames and not on the product as they are appraised by the superiors on their ability to deliver the projects within the time frame and budget. The project manager considers these as the signs of a successful project. The chart below (Exhibit 1) demonstrates that the project manager in failed IS/IT projects emphasize on timescales and budget while on successful projects they concentrate on commercial success and quality constraints. Users are happy when their requirements are met. Exhibit 1: (Source: Wateridge, 1998). On entrepreneurship, Drucker (1985) discusses activities where management concepts and techniques are applied to create a new market and a new customer. Entrepreneurial growth can be starting a brand new business, creating a new strategic unit, or launching a new product. The CSFs would differ depending upon the different situations. Factors that lead to project failures According to Rubin and Seeling, wrong choice of project manager, unplanned project termination and unsupportive top management were the reasons of failure (cited by Belassi & Tukel). Strategic perspective is not positively related to project success (Mueller & Turner). Vision in the project manager is detrimental to the project. Hughes found that lack of proper communication, rewarding the wrong actions and improper focus of the management system lead to project failures. Baker, Murphy and Fisher (cited by Belassi & Tukel) suggest that perceived performance of any project should be the measure of success instead of time, cost and performance. Just as there are differences on the factors critical to success of a project, researchers also differ on the measure of project success. This is because the project stakeholders perceive the project success of failure differently (Bellasi & Tukel). Secondly, the list of success and failures vary in numerous studies. Besides, for each stakeholder, the objectives and the priorities are set differently at different stages of the project life cycle. Lack of top management support combined with the project manager’s lack of competence might cause project failure (Fortune & White, 2006). Classification of critical success factors Schultz, Slevin and Pinto classified CSF as strategic or tactical (Belassi & Tukel). Project mission, top management support and project scheduling fall under the strategic factors while tactical factors include client consultation and personnel selection and training. They agree that factors are relevant to the stages of the project life cycle but Fortune and White (2006) feel that the factor approach ignores the potential for a factor to have varying levels of importance at different stages of the implementation process. Various researchers have developed the list of critical success factors (Exhibit 2) which widely differ from each other but according to Clarke (1999) groups of success factors and their interactions are of prime importance in determining a projects success or failure. No key factor is independently responsible for the success of any project. They are inter-dependent and require a holistic approach. Thus what is common to the different classifications is the interdependency. Exhibit 2: Belassi and Tukel Fortune and White (2006) say that various authors find different success criteria. The three factors common to most include the importance of support from senior management, having clear and realistic objectives; and producing an efficient plan. There is no concurrence among authors about the critical factors of success. Apart from this, even the priorities or ranking of the factors differ across authors. In the entire literature on CSF nobody has demonstrated the interrelationship between factors. Importance has been given to individual factors whereas their interrelationship is as important for success of any project. Even Shenhar et al. (2002) agree that the literature on CSF has a universal approach where all projects are considered identical and have the same facets. The projects have all been perceived in a subjective manner and the studies do not consider the managerial variables. Factors impact the project at varying degrees during the various stages of the project but the factor approach views the implementation as a static process instead of a dynamic phenomenon. Fortune and White suggest the Formal Systems Model which overcomes the lack of interrelationship between factors and it also helps to distinguish between successful and unsuccessful projects. It therefore provides a way of tackling the human and organizational aspects of systems development projects. Project Life Cycle The CSF varies during the life cycle of a project and this has been amply demonstrated by Pinto and Prescott (1998). This study identified the CSFs that were general to all projects and not industry specific. They determined the relative importance of CSFs across life cycle phases. Project mission and client consultation are of great importance during the strategic or the conception stage of the project. Project success depends upon the satisfaction of the stakeholders and the clients being the major stakeholders, it is essential to involve them in the initial stage. The planning stage requires the setting up of the budget and forming the team. This requires the support of the top management. During the execution stage ongoing assessment and continuous monitoring is essential. Communication is a critical factor in this stage in addition to schedules, plans, personnel, technical tasks, trouble shooting, monitoring and feedback. User or client satisfaction is of paramount importance in the final or the concluding stage. It enables to assess whether the client expectations have been met in relation to the objectives set at the start. Exhibit 3 demonstrates the variations that occur in the CSFs at different stages of the project life cycle: Source: Pinto & Prescott (1988) Boynton and Zymond found that CSFs were difficult to use unless analysts posses the capability to successfully apply an identification process (cited by Dobbins & Donnelly, 1998). Nevertheless CSF is widely accepted by the senior management as it works well at the policy, operational and strategic levels of information resource planning. CSF helps to identify issues that require top management involvement, improves user communication and defines organizational information structures. CSF helps to identify the major causes of project failures and when these are ranked by relative value, these problems can be avoided in future. Conclusion Literature review of the critical success factors demonstrates that most of the literature discusses failures rather than success of the projects. Many highlight the success of project management where the project manager comes into the picture. The lists of factors given by various authors are too broad and do not take into account the factors unique to a project. There are some factors common to most authors but the ranking in terms of priority differs. Thus there is no consensus on the critical success factors across researchers. Some are of the opinion that the factors differ across industry type, size while some emphasize that the factors could also vary at different stages of the project life cycle. Some contend that the success of the project can be determined only at the end of the project but in some cases it can be assessed throughout the duration of the project. There are some who believe that the perceived success is important, the overall success is what matters even if the project fails in meeting and time and budget scales. Most projects require the support of the top management as is evident from the literature which makes it an important factor. Projects are client specific and hence client consultation and satisfaction have also been given importance in most studies. Thus, literature does not offer any concrete solution to determining success of a project except the Formal Systems Model which helps to overcome certain deficiencies in the factor approach. CSF does help to identify the causes of project failure and determines how to avoid these problems in future. References: Belassi, W., & Tukel, O. I., (1996), A new framework for determining critical success/failure factors in projects, International Journal of Project Management Vol. 14, No. 3, pp. 141- 151, 1996 Clarke, A., (1999), A practical use of key success factors to improve the e€ectiveness of project management, International Journal of Project Management Vol. 17, No. 3, pp. 139-145, 1999 Cooke-Davies, T., (2002), The ‘‘real’’ success factors on projects, International Journal of Project Management 20 (2002) 185–190 Daniel, R.D. (1961) ‘Management Information Crisis’, Harvard Business review, Vol. 39, No. 5, pp. 111-121. Dobbins, J. H., & Donnelly, R. G., (1998), summary Research Report on Critical Success Factors in Federeal Government Programme management, Acquisition Review Quarterly, 24 Feb 2007 Drucker, P. F. (1985) Innovation and Entrepreneurship, Harper Business, New York. ESCC (2006), Critical Success Factors, 22 Feb 2007 Fortune, J., & White, D., (2006), Framing of project critical success factors by a systems model, International Journal of Project Management 24 (2006) 53–65 Muller, R., & Turner, J. R., (2007), Matching the project manager’s leadership style to project type, International Journal of Project Management 25 (2007) 21–32 Nguyen, L. D., Ogunlana, S. O., & Lan, D. T. X., (2004), A study on project success factors in large construction projects in Vietnam, Engineering, Construction and Architectural Management Volume 11 · Number 6 · 2004 · pp. 404–413 Pinto, J. K., & Prescott, J. E. (1988), ‘Variations in critical success factors over the stages in the project life cycle’, Journal of Management, Vol. 14, No.1, pp. 5-18. Shenhar, A.J., Tishler, A., Dvir, D., Lipovetsky, S. and Lechler T. (2002), ‘Refining the Search for Project Success Factors: A Multivariate, Typological Approach’, R&D Management, Vol. 32, No.2, pp. 111-126. Torp, O., Austeng, K., & Mengesha, W.J., (2004), ‘Critical Success Factors for Project Performance: A study from front-end assessments of large public projects in Norway’, Conference, Nordnet. Wateridge, J., (1998), How can IS/IT projects be measured for success? International Journal of Project Management Vol. 16, No. 1, pp. 59-63, 1998 Appendix A: Critical Success factors identified across 63 publications Source: Fortune & While (2006). Appendix: B Industry-wise ranking 0f critical success factors Source: Belassi & Tukel (1996). Read More