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Let us just imagine and use some well-known metrics. Administrative and operational costs are normally between 15 and 20% of the full project costs.
The rest of the costs are directly associated with the development of the features and functions. Therefore, as we discussed in the previous section,
the volume of waste can be up to 40% of the end to end project cost. Think about the last significant or sizeable project you worked on and consider
40% of its total project budget. On a ONE million dollar project, that is a whopping 400,000 dollars wasted. It does not always add up exactly and
simply like this.
It depends on what type of project. It depends on what size of project. It depends on the type of deliverables that you are preparing. I.T.
infrastructure projects have a lower burn rate than web or software application development. Projects with more consulting services and contractor
costs, with disparate project teams involving lots of travel or expensively located offices will have a higher burn rate. However if you consider
that a project of just six months, with a burn rate of £19,000 per day will ultimately develop nearly £1 million worth of features that will never be
used. If your organisation delivers twelve projects per year, that is a waste of £12 million per year or £3 million per quarter.
£12 million would settle the bill for the divorce of Monty Python actor, comedian, writer and film producer John Cleese or pay for the very lengthy legal
and judicial inquiry into the death of Lady Diana.
It is what the Kingsnorth power station in Kent, England spent on security to make it the most heavily guarded plant in the U.K. An investment of
£12 million would give one pound to everyone with a BlackBerry or a World of Warcraft membership or buy all the potato chips that are eaten on
Super Bowl Sunday. If nothing else, it would fill an office canteen with games and food to last the staff a very long time.
Even the quarterly waste of £3 million can buy an awful lot of coffee and doughnuts. We have not the foggiest idea whether stacked end on end they
would reach the moon and even less inclination to work it out. But, just pause slightly for a moment while you read this. It cost £3 million to
build commission and install the Rothera Research Station for the British Antarctic survey on the remote Adelaide Island in the windswept and
freezing Antarctic. That is what £3 million of worthless features can buy you. Rothera is an important yet remote facility built in one of the most
inhospitable areas of the world to house up to 100 scientists and support personnel with a 900m long aircraft runway for the investigation of
Marine & Terrestrial Biology, Geology, Glaciology, Meteorology and Atmospheric science. It is a lot. Bear in mind also, you could buy and build one
of those every three months and never need to ask for more funds. The wasted features on your 12 projects will have paid for it outright.
Given enough time and enough timber, whole Antarctic colonies of scientists are only a short step away. Maybe, maybe not, we digress.
£3 million is obviously a monstrous amount to waste but it is a huge amount to amass in the first place. This is real money, real investment and
this money had to be made or accumulated from some activity within the organisation. Let us look at how you could accumulate £3 million.
If you were to run a project that gave a 20% return on investment, this would be an achievement and a marked success especially in low interest rate
environments. However some simple mathematics demands that this project would seek to secure an investment of £15 million. So you would need
some kind benefactor to provide £15 million investment then you have to deliver a project with a 20% return on investment to accumulate £3 million.
It is a sizeable sum and a shocking amount of cash to loose or waste. If you invest £15 million to loose £3 million this is an accident. If you invest £15 million to waste £3 million, this is outrageous.
If you search your favourite search engine for the term Project Waste you get many pages offering solutions to pollution and little information
on the real waste delivered by commercial projects. Let us face it, it should be just the various commercial environmental companies who deliver
waste. However, governments and corporations have been delivering waste for years. They have been delivering waste with failed projects.
This is changing, slowly. |
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 SPADE: Successful Pragmatic Agile Delivery Everytime™ |
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