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2010 Mark Kozak-HollandTitanic Lessons for Projects www.lessons-from-history.com
Titanic Lessons for Projects
Presentation to PMI MilanOctober 1st, 2010Mark Kozak-Holland
Avoiding Project Disasters
Lessons From the Past that Assist the Projects of Today to Shape the World of Tomorrow
www.lessons-from-history.com
http://www.lessons-from-history.com/http://www.lessons-from-history.com/http://www.lessons-from-history.com/http://www.lessons-from-history.com/http://www.lessons-from-history.com/
2010 Mark Kozak-Holland
Objectives: Analyze Titanics construction project and voyage
It uses lessons learned to understand key project issues.
It looks at key decisions that led to project compromises.
It questions why captain was unable to prevent disaster.
It makes a step by step comparison to todays Projects.
Please prepare questions for the end of the presentation.
Page 2 Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 3
The success rate of Projects is stubbornly low as first shown by the Chaos reports from Standish Group
Hypothesis:
Projects set seeds for future operational failures.
Problems attributed to poor decisions making in the project.
Check www.lessons-from-history/Project Success or Failure/
Source: Chaos, a
recipe for success,
Standish Group,
280,000 projects
evaluated
1994 1996 1998 2000 2002 2004 2006 2008
Succeeded 16 27 26 28 34 29 35 32
Failed 31 40 28 23 15 18 19 24
Challenged 53 33 46 49 51 53 46 44
0
10
20
30
40
50
60
Titanic Lessons for Projects www.lessons-from-history.com
Through 2010, government agencies will
cancel 30% of the IT projects that they
initiate, including at least 10% of projects
budgeted at more than $200,000 (0.7
probability).
Source: Garner Group
2010 Mark Kozak-HollandPage 4
Some notable project failures during the project implementation or into operation
Oct. 2009, eHealth Ontario, 30 full-time employees and 300 consultants many in senior positions.
Aug. 2009, Digital trunked radio system failures Public-Safety Radio, Technology in Government
May 2009, Google suffers major failure, various Apps kicking back in after widespread outage
Sep. 2008 London Stock Exchange failed for 7 hours hurting clients who trade $17.5 bn a day.
February 2008 - American LaFrance (ALF), leading brand of custom-made fire fighting, rescue vehicles, and ambulances, declared bankruptcy, blaming IBM and failed ERP implementation.
Nov. 2007, passengers lineup terminal length (1 km), after glitch in Air Canada resv. system.
January 2007, Sweden's largest Bank, Nordea, the biggest heist of customer accounts on record more than $1m was stolen.
2006 LCH.Clearnet shut down its Generic Clearing System (GCS) project at a cost of EUR67.9 m.
2006 Maine Medicaid Claims System project 1 year on is a disaster of major proportions. Since the new system went live, it has cost the state of Maine close to $30 million.
Hersheys ERP implementation failure ($112m), distribution problems, 27% marketshare loss.
The FoxMeyer Drug ERP system implementation failure led to collapse of entire $5 bn company.
June 2004, RBC fell behind processing salary deposits thousands of Canadian workers as millions of transactions were affected by a computer glitch that caused payroll delays.
June 2004, an air traffic control computer failure saw massive air disruption across the UK. All flights from UK airports were grounded after a problem at the National Air Traffic Service.
Check www.lessons-from-history/Project Success or Failure/
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 5
Notable project failures during projects. Why do problems still occur and Projects fail catastrophically?
August 2008 Unencrypted memory stick lost with names/dates of birth of 84,000 inmates, England 's entire prison population. Home addresses of 33,000 who had six convictions.
Feb. 2007 20bn UK NHS computer system 'doomed to faila senior insider has warned.
2007 laptop with records of 600,000 recruits was stolen from Royal Navy recruiter's car
2006 Department of Homeland Security scuttles its $229m Emerge2 program (new financial IT system).
2005 US Justice Department stated $170m FBI Virtual Case File project a failure, after 5 yrs & $104m. In a 18-month period, FBI gave contractor 400 requirements changes.
2005 UK Inland Revenue gave $3.45 bn of tax overpayments because of software errors.
April 2005 Australian inter-departmental warfare resulted in failure of $64m federal project.
2005 British food retailer J Sainsbury wrote off $526m in automated supply-chain system.
IRS project on taxpayer compliance took decade to complete and cost $50 bn.
Oregon DMV conversion to new software took 8 years and public outcry killed the project.
State of Florida welfare system plagued with numerous errors & $260m in overpayments!
May 2005 major hybrid car manufacturer installed software fix on 20,000 vehicles. The automobile industry spends $2 to $3 bn per year fixing software problems.
July 2004 new welfare management system in Canada costing $200m unable to handle simple benefits rate increase. Contract never tested this in 6 weeks of acceptance tests.
Check www.lessons-from-history/Project Success or Failure/
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 7
Bad IT service performance, IT project success rates, & IT investments are not a CIO problem affect all c-levels
Most project management mistakes are either lack of adequate planning or
communications breakdown (among project team or with project sponsors).
Source: Chaos, a recipe for success, Standish Group, 2008
serious deficiencies in senior executive skills with IT projects. Lack of PM
skills cut benefits of IT projects by 25%.
Executives are involved in selecting and approving projects, but rarely
delivering them. 49% experienced one project failure in past 12 months.
Source: KPMG's Global IT Project Management Survey, July 2005.
C-levels need to understand:
Relationship projects / operations
What can go wrong in complex on-line operation?
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 8
To understand relationship between operations & Projects imagine yourself in 1912 in a Titanic lifeboat being rescued.
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 9
In 1908 White Star facing businesses pressures and responded with strategy that leveraged emerging technology
Competition and new entrants.
Aging technology infrastructure,
inferior service, loss of market
share & customers.
Invest in technology - 3 new
super liners to sweep Atlantic.
Push emerging technology to
limits.
Address all 3 passage classes,
priority on first-class.
Quality of crossing, customer
experience.
OlympicMauretania
15% faster23% greater capacity
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-HollandPage 10
The strategy required new technology investments but the business case was really solid
Profitability analysis breakeven 2 yrs.
6 year construction project.
75% of revenue first-class.
1st class suite - $4,350,
2nd class suite - $1,750,
3rd class ticket - $30-46
Titanics class segregation = todays
customer segments.
Passenger space allocated: 60% for 905 first-class.
7% for 1134 third-class.
Titanic Lessons for Projects www.lessons-from-history.com
2010 Mark Kozak-Holland
Project Integration and Scope Management
Project Charter developed by Project
Sponsor Ismay, and Pirie
Transform White Stars business
model & replace aging fleet
Luxury drives customers back, not speed
Project objectives (purpose)
Deliver 3 super liners over 7 year period
Staggered delivery revenue for revenue flow
Principal considerations safety, comfort and
luxury, with a reasonably fast speed.
Projects criteria for success
Each ship is in operation within 4 years
Meets terms and standards of contract
Change Control performed
Through contract
Titanic Lessons for Projects www.lessons-from-history.comPage 11
2010 Mark Kozak-Holland
Project Time Management - Schedule (High level)
Titanic Lessons for Projects www.lessons-from-history.com
H 1 H 2 H 3 H 4 H 5 H 6 H 7 H 8 H 9 H 10 H 11 H 12 H 13
Design
Construction
Sea
Trail
s
Olympic
Titanic
H 14
1907 1908 1911 19131909 1910 1912
Sea
Tr
ail
s
Construction
Construction
Gigantic
1914
H 15
Launch
Launch
Gantry
Idea
Page 12
2010 Mark Kozak-Holland
Other PMBoK Areas
Cost Mgt
Estimated Budget
Final cost fixed price contract of 3 million
for the pair
Control costs with regular audits
Quality Mgt
Premium world ship builder
Best reputatio
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