Optimism Bias in Project Management

3404 Words7 Pages
bulb-icon

Recommended: Eight key factors to ensuring project success

Introduction Projects are widely used by many organizations and government institutions in the course of conducting their business. One of the reasons for this is because they have been proven to be effective in initiating change and translating strategic programs into daily activities. However, it has been established that most projects fail to deliver on time, budget, and customer specifications. In most cases, this failure is caused by over-optimism by the project management team. This over-optimism commonly referred to as optimism bias can simply be defined as overestimating the projects benefits and conversely underestimating its cost and duration time. Research have portrayed that this is often caused by failure to properly identify, understand, and manage effectively the risk associated with the project therefore putting its success at jeopardy(Mott McDonald, 2002). Fortunately, this biasness can be detected and minimized during the project gateway process. Project Gateway Process This process is aimed at ensuring the project being pursued has a potential of delivering by adhering to the allocated time, sticking to the budget and very important, meeting customers specifications (Mott McDonald, 2002). It involves assessing the projects at critical stages (also referred to as gates) in its lifecycle and thus assuring it can advance to the next stage successfully. This function is performed by an independent experienced team, after which they assure the Senior Responsible Owners that the project can progress successfully (National Academies US & National Research US, 2004). There are six critical stages (gateways) in the lifecycle of a project that the independent gateway review team will evaluate and thus provide th... ... middle of paper ... ...0: Strategic assessment. Retrieved from http://www.ogc.gov.uk/documents/cp0004.pdf. Office of Government Commerce. (2007b). OGC Gateway Process Review 1: Business Justification. Retrieved from http://www.ogc.gov.uk/documents/cp0005.pdf. Office of Government Commerce. (2007c). OGC Gateway Process Review 2: Delivery Strategy. Retrieved from http://www.ogc.gov.uk/documents/cp0006.pdf. Office of Government Commerce. (2007d). OGC Gateway Process Review 3: Investment Decision. Retrieved from http://www.ogc.gov.uk/documents/cp0007.pdf. Office of Government Commerce. (2007e). OGC Gateway Process Review 4: Readiness for Service. Retrieved from http://www.ogc.gov.uk/documents/cp0008.pdf. Office of Government Commerce. (2007f). OGC Gateway Process Review 5: Operation review and benefits realization. Retrieved from http://www.ogc.gov.uk/documents/cp0009.pdf.

Show More
Related

  • The Stage-Gate Process And Critical Path Method

    719 Words  | 2 Pages

    This process captures those activities which can be completed simultaneously and those that must be completed prior to beginning another phase, the “critical” activities (Grochels, 2012). Therefore this method gives the product manager knowledge of how long the project will take, which activities must be completed on time, how much it will cost to speed up the process and what the least costly way to finish the project faster would be (Baker, 2002). These benefits greatly increase the probability of a project being completed on time and on schedule, however they system does have

    Read More

  • Cycle: The Software Development Life Cycle

    1055 Words  | 3 Pages

    Business requirements are gathered in this stage. This stage is the main focus of the project managers and stake holders. It is performed by the senior members of the team with inputs from the customer, the sales department, market surveys and domain experts in the industry. This information is then used to plan the main project approach and to conduct product feasibility study in the economical, operational and technical areas. You identify needs of the software. This is the vital stage, because bad investigation may lead to the project

    Read More

  • London Olympics 2012 Project Management

    2044 Words  | 5 Pages

    Söderlund, J. 2004. Building theories of project management: past research, questions for the future.International Journal of Project Management, 22 (3), pp. 183-191.

    Read More

  • Six Sigma Case Study

    1171 Words  | 3 Pages

    It is a step of defining the goals of the projects and the results are aimed at reaching certain levels of productivity of customer satisfaction. The second stage is measure, and it is the stage of collecting data and facts and evaluating current operational performance. The third stage is analyze with the purpose of developing methods and theories that will best suit the solving of the problem; it is also a stage of detecting cause-and-effect ties of the processes. The fourth stage is improve, it is aimed at generating ideas for reaching the desired process improvement. Finally, there is the control stage that is about monitoring the operations to find out whether the process of improvement is smooth and the problems were solved (Meredith & Shafer,

    Read More

  • Essay On Consultanting

    2213 Words  | 5 Pages

    As a consultant, there are processes that vary in the number of steps, however for the purposes of this paper the following steps will be addressed; initial contact, decision to work together, preliminary analysis, formal proposal, project charter, in-depth analysis, implementation, delivery, and follow up (Frankl, 2014, p. 3).

    Read More

  • Project Success In Project Management

    1237 Words  | 3 Pages

    Achieving the anticipated outcome of cost, time, and quality are traditionally what determines the success or failure of a project (Chipulu et al., 2014). Project success is dependent on the support of senior management, but their involvement in projects and understanding of project management methodologies is perceived to be inadequate by project managers (Ancosky, 2013) or lack of proper governance makes them ineffective (Young & Poon, 2013).

    Read More

  • Exploring Project Management Structures: Insights and Implications

    876 Words  | 2 Pages

    A. Introduction The scope of this report is to provide project managers with valuable insights on the author’s own philosophical view on project management, focusing on the organization’s internal & external environment and circumstances affecting the project’s success e.g. The project management structure, forming virtual teams, and the organization’s stakeholders, etc. Laufer et al. (2015) had also emphasized the importance of long-term planning in dealing with these unforeseen events, which raises the point that project managers must be well-equipped with the proper knowledge and tools to appropriately handle such situations. The success of a project is undeniably crucial to an organization because businesses are able to meet the customers’ demands, leading to upholding of reputation and business partnership.

    Read More

  • Scheduling In Project Management Essay

    1253 Words  | 3 Pages

    Critical Path Method provides a complete overview of the entire project and helps get everyone aligned on the project.

    Read More

  • Case Study Of Reson

    1078 Words  | 3 Pages

    Project management is said to be completed within time when it completed within the “triple constraints”: cost, time and quality. And in a lot of causes, one them is sacrificed so as to meet the other two. Project managers prioritize which ones are the most important.

    Read More

  • Project Development Lifecycle

    2009 Words  | 5 Pages

    Project Planning and development Lifecycle is one of the most critical and sensitive aspects of organization that can have direct impact on productivity, efficiency and reputation of the organizations. Therefore, in order to complete the project development in an effective and optimized manner, it is important that special focus is made on issues and factors that lead to failed or over-expensed projects. Therefore, one of the most common concerns of project managers is regarding the factors leading to project failures, costs higher that allocated, and wastage of resources. Considering the importance of Project Planning and development lifecycle, respective paper will describe that Often projects fail due to incapability of not planning and estimating the project requirements, specifications and costs in an effective and efficient manner that could lead to successful scheduling of the project.

    Read More

  • The Negative Effect Of Optimism Bias

    325 Words  | 1 Pages

    Optimism bias is defined as the belief that the future will be better than the present and past; the individual is optimistic about the future. The individual also overestimates the chances that good things will happen in the future and underestimates the chances of something bad to happen. The optimism bias can have a positive effect as it keeps the individual from falling into depression. Being realistic is often difficult because in reality we are going to have many bad things happen to us but we don’t want to admit this as it is a depression matter. An individual is going to lose their job, lose someone they love, get into a car accident, or make a terrible mistake but thinking about these things isn’t particularly healthy for the mind.

    Read More

  • Thesis Statement For Risk Management

    2180 Words  | 5 Pages

    Risk management has been one of the major concerns of executives and professionals involved with projects today, especially after the financial crisis that shook the world in 2008.The results of ex-post assessments of project or even verification of lost business opportunities for companies are clear signals that this evidence has become more intense (Junior, 2013).

    Read More

  • The Importance of Being Optimistic

    418 Words  | 1 Pages

    than just "doing," then you can have the joy of not only being in the

    Read More

  • Role Of Project Management In Today's Business World

    708 Words  | 2 Pages

    Today, Project Management specialist in every organization and it is a growing field used increasingly by businesses of all sizes. Simply Project management is all about organizing, planning, managing and executing projects with specific goals and objectives. It’s a broad term and the main purpose is minimizing failures of projects. Many business related projects involve large scale of planning that affect every department of a business. And it’s dealing with human resources, budgetary and supply constraints. The most important facts that effecting to project management is Scope, Time and budget. In Scope, deciding what is going to plan and how to organize to accomplish organization goals

    Read More

  • What Is The Importance Of Project Management

    781 Words  | 2 Pages

    When planning a new project, how the project will be managed is one of the most important factors. The importance of a managers will determine the success of the project. The success of the project will be determined by how well it is managed. Project management is referred to as the discipline that entails the processes of carefully planning, organizing, controlling, and motivating the organization resources so as to foster and facilitate the achievement of specific established and desired goals and meet the specific criteria of success required in the organization (Larson, 2014). Over the course of this paper I will be discussing and analyzing the importance of project management.

    Read More

More about Optimism Bias in Project Management

Open Document