Those Olympic estimates will not go away

The row about the cost of the 2012 Olympic Games goes on. Today a report by the Public Accounts Committee (click here for the full 40 page report) criticises the government for the escalating costs of the games.

Costs have risen from a bid price of just over £4 billion to a revised estimate (March 2008) of £9.325 billion! Now my guess is that the arguments around the true cost of the games will continue for many years up to and beyond the games themselves.

I am not going to try and argue which side is correct or who made big errors, if any have been made, I want to use this as an example of what can happen if your estimates are wrong - time, money or resources.

We work with many professional staff who in their words estimate poorly or use guestimates. So what can be done to ensure you have more accurate estimates?

*break it down - on our courses we stress the need to break down the overall project into manageable chunks. We encourage people to use work breakdown or product breakdown techniques. If you are going to put estimates against an activity the activity needs to be small enough to put an estimate against e.g. if you are carrying out all of the administration for a conference it is easier to estimate how long it will take to hire 4 projectors compared to organising the whole conference.

*who has the skills to provide you with the knowledge of what is involved in the project and how long each task will take. Use financial experts to help you identify the financial estimates.

*you are not alone - sometimes you are working on a project which someone within your organisation has worked on before. Ask them how long the project took. Ask them for the work breakdown; look at the cost estimates and actuals.

*documentation - the above point highlights the need for project documentation. Keep up to date records

*post project review and project meetings including lessons learned reports - these should include the level of accuracy of your estimates (of all your estimates - money, time, resources), what you have learned while working on the project. Share this information with others.

Make sure you spend more time estimating. Avoid the poor publicity or the consequences of spending too much money, delivering late with the wrong results.

Project over-runs….again

My earlier blog about Terminal 5 showed a real lack of planning, training and co-ordination. But, at least the terminal was completed on time!

What about other transport projects? My thanks to Donnie MacNicol who pointed to a recent report published in the Financial Times. This report suggested that Europe’s 30 most important transport projects will cost far more than first thought. The report queries how some financially strapped governments will find the necessary funds.

An independent study by PwC, blames the €40bn ($63bn) cost overrun on poor project management, planning difficulties, changes in project specifications, lawsuits and lack of funding.

Bear in mind this is public money - the UK’s cost forecast according to the article is
€26.7bn.

Now we all finish up paying for these over- runs in one way or the other - money or delays in the transport system. What is being done to ensure that large scale projects are delivered on time and to budget and of course to customer quality standards? Not a lot it would seem.

There are many examples of past projects failing to deliver on time and to budget and it looks as though we have not learned from these; lessons learned seems to be lost and forgotten.

Read the article here - it makes chilling reading with high costs and poor delivery.

Terminal 5 shambles brings holiday chaos

Not a great headline from The Times newspaper here in the UK this morning. Who would be a BA or a BAA executive?

For those that do not know after 19 years of planning and building (much of this was in getting planning permission to build the terminal) the 5th Terminal at Heathrow opened yesterday and by the end of the day:

10,00 passengers were affected by a series of cancellations
33 flights were cancelled
4 hours delay for luggage on incoming flights
188 departures planned for terminal 5 yesterday
31,000 passengers due to be handled yesterday

The debate will go on for a while to establish EXACTLY what went wrong however some issues have already surfaced:

* signage in the new terminal is not very clear
* staff handling baggage etc were delayed by security checks
* security workers could not park
* baggage handlers were unable to log on to computers

So, what are the lessons for all of us involved in the running of projects (as big as Terminal 5)?

a)trial, trial and trial again. This week there was TV programme showing how they built and tested the new airport. Obviously not enough

b) how about one persons suggestion in the papers "have a a gradual move across to terminal 5 rather than a big bang… "

c)training: when things go wrong, you need well trained staff to cope! The papers are full of quotes from unhappy passengers however one quote from a staff member (if its true) does little to inspire confidence “this is what happens with a new terminal”. Train, train and train again. If you do this the chances of the problems and issues happening are reduced and if something does go wrong well trained staff do try and inspire confidence in its customers...somehow

d)put in robust quality checking processes. These quality checks would have identified potential problems and potential risks

e)PR - what a disaster for BAA, BA and for the UK. Many of the post from on-line newspapers were incredibly scathing about this countries poor project management record.

As I type this note, there are calls for heads to roll (sackings)- I wonder....

No doubt there will be further information coming from the sad experience of those who tried to travel in yesterday.