Root cause analysis of project gate review failures when evaluated against a project lifecycle process methodology. (A Transnet Capital Projects Case Study)

Abstract

Abstract Many organisations are integrating project management as a best practice for building core competencies in the manner in which they manage and operate their businesses. Projects are initiated out of a strategic necessity, in the quest to capitalise on opportunity to advance profitability or to increase market share by providing a new value proposition. These initiatives require the investment of capital and hence it is imperative to evaluate the feasibility and sustainability of the investment before committing substantial expenditure to the project initiatives. Transnet, a state owned enterprise, embraced the project management philosophy in the management of the delivery of their capital investment infrastructure programme. Transnet developed a generic standardised Project Management Process Methodology (PLP) based on industry best practice as implemented on project phases, divided and controlled by sequences of stage gate evaluations. The company is currently experiencing a major conundrum since the inception of the PLP stage gate review methodology, in which many of the capital projects that have been evaluated against this criterion have failed. The study was undertaken to gain an understanding of the root causes and factors influencing project gate review failures through an exploratory mixed qualitative and quantitative methodology. The target population was project managers and engineers who are the users of the PLP methodology in which data was collected through interviews and a survey research instrument. The main conclusions are that the PLP methodology lacks support in the form of training, provision of sample documentation, standard templates and guidelines on how to prepare project deliverables. The gate review panel members are inconsistent in rigour, objectivity and lack competence to undertake reviews. A large proportion of the project managers and engineers (approximately 36% on average) are not competent and have a low maturity level in successfully managing large infrastructure projects. The study also attributed low quality, insufficient and incomplete business cases, project execution plans, owner’s requirement specifications, risk management plans and operational readiness plans as possible causes of gate review failures. Recommendations in the form of a project management academy which focusses on training and other development initiatives for gate review panel members and project management resources are proposed together with process and procedure reengineering. In doing so, project management processes can be improved and skills competency levels be uplifted, resulting in a lower gate review failure rate. Scope for further research in examining the role of a Project Management Office (PMO), the use of organisational project management maturity model (OPM3) and extending the study to include other industries is proposed.