How are mega-projects managed

About the failure of megaprojects

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90 percent of all megaprojects exceed their budget and schedule. According to a recent study, this has a significant impact on the global economy. But the study authors also found explanations for the problems that arise in such large-scale projects.

An analysis of almost 1,000 megaprojects showed that their actual costs were on average 55 percent above the original budget. According to the study "Keep your Megaproject on Track" carried out by the consulting firm Roland Berger, given the increasing number of megaprojects, this is likely to have a significant impact on the global economy.

According to the consultants, these serious effects result from the fact that an estimated 30 to 75 trillion euros are to be invested in mega-projects over the next 15 years. However, improvements in management could save between € 3 and € 7.5 trillion.

Standard project management procedures do not apply

But in order to actually generate these savings, the consultants set out to find the causes of the problems. In addition to the complexity of the projects, one thing lies in their incomparability: For a mega project, there is usually no comparable project in the past.

In addition, the usual standard project management procedures - from the stage-gate concept to front-end loading - have all proven to be inadequate for mega-projects. This is because they generally focus on static decision-making and progress control. However, prerequisites for project success or causes for the failure of mega-projects would be left out.

After all, four factors are usually decisive:

  1. The complexity of the mega-projects.

  2. The groundbreaking character of the projects, which means that hardly any standard procedures are used and the respective individual challenges only come to light as the project progresses.

  3. The unpredictability of circumstances and complications. These can neither be avoided nor precisely calculated in advance.

  4. A change in the dynamics of the actors in the course of the project.

Appropriate decisions with precise reactions are required

"These four factors create problems that the management of megaprojects has to solve," says Heiko Ammermann, partner at Roland Berger and co-author of the study. "In addition, errors in the decision-making processes at the lower levels of a project are often not communicated through the chain of command." This leads to an additional misalignment of the project's puzzle pieces. And: the later this is recognized, the more additional work is necessary. This in turn results in exceeding the schedule and budget.

Therefore, it is important to have tools that enable you to make quick and appropriate decisions with precise reactions throughout the project. For this, the collection, analysis and synthesis of all relevant information must take place continuously.