Double Whammy - How ICT Projects are Fooled by Randomness and Screwed by Political Intent

The cost-benefit analysis formulates the holy trinity of objectives of project management - cost, schedule, and benefits. As our previous research has shown, ICT projects deviate from their initial cost estimate by more than 10% in 8 out of 10 cases. Academic research has argued that Optimism Bias and Black Swan Blindness cause forecasts to fall short of actual costs. Firstly, optimism bias has been linked to effects of deception and delusion, which is caused by taking the inside-view and ignoring distributional information when making decisions. Secondly, we argued before that Black Swan Blindness makes decision-makers ignore outlying events even if decisions and judgements are based on the outside view. Using a sample of 1,471 ICT projects with a total value of USD 241 billion - we answer the question: Can we show the different effects of Normal Performance, Delusion, and Deception? We calculated the cumulative distribution function (CDF) of (actual-forecast)/forecast. Our results show that the CDF changes at two tipping points - the first one transforms an exponential function into a Gaussian bell curve. The second tipping point transforms the bell curve into a power law distribution with the power of 2. We argue that these results show that project performance up to the first tipping point is politically motivated and project performance above the second tipping point indicates that project managers and decision-makers are fooled by random outliers, because they are blind to thick tails. We then show that Black Swan ICT projects are a significant source of uncertainty to an organisation and that management needs to be aware of

Overspend? Late? Failure? What the Data Say About IT Project Risk in the Public Sector

Implementing large-scale information and communication technology (IT) projects carries large risks and easily might disrupt operations, waste taxpayers' money, and create negative publicity. Because of the high risks it is important that government leaders manage the attendant risks. We analysed a sample of 1,355 public sector IT projects. The sample included large-scale projects, on average the actual expenditure was $130 million and the average duration was 35 months. Our findings showed that the typical project had no cost overruns and took on average 24% longer than initially expected. However, comparing the risk distribution with the normative model of a thin-tailed distribution, projects' actual costs should fall within -30% and +25% of the budget in nearly 99 out of 100 projects. The data showed, however, that a staggering 18% of all projects are outliers with cost overruns >25%. Tests showed that the risk of outliers is even higher for standard software (24%) as well as in certain project types, e.g., data management (41%), office management (23%), eGovernment (21%) and management information systems (20%). Analysis showed also that projects duration adds risk: every additional year of project duration increases the average cost risk by 4.2 percentage points. Lastly, we suggest four solutions that public sector organization can take: (1) benchmark your organization to know where you are, (2) de-bias your IT project decision-making, (3) reduce the complexities of your IT projects, and (4) develop Masterbuilders to learn from the best in the field.Comment: Published in Commonwealth Secretariat (Eds.): Commonwealth Governance Handbook 2012/13: Democracy, development and public administration, London: Commonwealth Secretariat, December 2012. ISBN 978-1-908609-04-

Knowledge transfer processes in PFI: identification of barriers and enablers

Increasingly, the UK’s Private Finance Initiative has created a demand for construction companies to transfer knowledge from one organization or project to another. Knowledge transfer processes in such contexts face many challenges, due to the many resulting discontinuities in the involvement of organisations, personnel and information flow. This paper empirically identifies the barriers and enablers that hinder or enhance the transfer of knowledge in PFI contexts, drawing upon a questionnaire survey of construction firms. The main findings show that knowledge transfer processes in PFIs are hindered by time constraints, lack of trust, and policies, procedures, rules and regulations attached to the projects. Nevertheless, the processes of knowledge transfer are enhanced by emphasising the value and importance of a supportive leadership, participation/commitment from the relevant parties, and good communication between the relevant parties. The findings have considerable relevance to understanding the mechanism of knowledge transfer between organizations, projects and individuals within the PFI contexts in overcoming the barriers and enhancing the enablers. Furthermore, practitioners and managers can use the findings to efficiently design knowledge transfer frameworks that can be used to overcome the barriers encountered while enhancing the enablers to improve knowledge transfer processes

What can management theories offer evidence-based practice? A comparative analysis of measurement tools for organisational context

Background: Given the current emphasis on networks as vehicles for innovation and change in health service delivery, the ability to conceptualise and measure organisational enablers for the social construction of knowledge merits attention. This study aimed to develop a composite tool to measure the organisational context for evidence-based practice (EBP) in healthcare. Methods: A structured search of the major healthcare and management databases for measurement tools from four domains: research utilisation (RU), research activity (RA), knowledge management (KM), and organisational learning (OL). Included studies were reports of the development or use of measurement tools that included organisational factors. Tools were appraised for face and content validity, plus development and testing methods. Measurement tool items were extracted, merged across the four domains, and categorised within a constructed framework describing the absorptive and receptive capacities of organisations. Results: Thirty measurement tools were identified and appraised. Eighteen tools from the four domains were selected for item extraction and analysis. The constructed framework consists of seven categories relating to three core organisational attributes of vision, leadership, and a learning culture, and four stages of knowledge need, acquisition of new knowledge, knowledge sharing, and knowledge use. Measurement tools from RA or RU domains had more items relating to the categories of leadership, and acquisition of new knowledge; while tools from KM or learning organisation domains had more items relating to vision, learning culture, knowledge need, and knowledge sharing. There was equal emphasis on knowledge use in the different domains. Conclusion: If the translation of evidence into knowledge is viewed as socially mediated, tools to measure the organisational context of EBP in healthcare could be enhanced by consideration of related concepts from the organisational and management sciences. Comparison of measurement tools across domains suggests that there is scope within EBP for supplementing the current emphasis on human and technical resources to support information uptake and use by individuals. Consideration of measurement tools from the fields of KM and OL shows more content related to social mechanisms to facilitate knowledge recognition, translation, and transfer between individuals and groups

Editorial: Federal developments

On 10 May 2011, Federal Treasurer Wayne Swan MP delivered the Federal Budget for the 2011–2012 financial year. The Budget contains a number of new initiatives, financial redistributions and reductions that relate to Australia's current regulatory framework governing the environment, climate change and renewable energy. These are set out below..

Food security, risk management and climate change

This report identifies major constraints to the adaptive capacity of food organisations operating in Australia. This report is about food security, climate change and risk management. Australia has enjoyed an unprecedented level of food security for more than half a century, but there are new uncertainties emerging and it would be unrealistic – if not complacent – to assume the same level of food security will persist simply because of recent history. The project collected data from more than 36 case study organisations (both foreign and local) operating in the Australian food-supply chain, and found that for many businesses,  risk management practices require substantial improvement to cope with and exploit the uncertainties that lie ahead. Three risks were identified as major constraints to adaptive capacity of food organisations operating in Australia:  risk management practices; an uncertain regulatory environment – itself a result of gaps in risk management; climate change uncertainty and projections about climate change impacts, also related to risk management

Regulating Disruption: Blockchain, GDPR, and Questions of Data Sovereignty

The article discusses the nature of law in cyberspace. Topics discussed include distinction between regulation as infringement of private autonomy and regulation as a collaborative enterprise; blockchain regulatory conundrum; and neoliberal market-complementing regulation. Also being discussed is the regulation for economic efficiency and consumer choice

The relationship between knowledge management and innovation level in Mexican SMEs: Empirical evidence

The transformation of the current society from an industry-based economy to a knowledge management and innovation-based economy is changing the design and implementation of business strategies and the nature of the competition among the organizations which are mainly small and medium-size enterprises (SMEs). They struggle to survive in a market which is more demanding and competitive, so they seeknowledge management as one of the most effective strategies that may help to enable the innovation activities into the businesses. For these reasons, this research paper has as a main goal to analyze the relationship between knowledge management and innovation in Mexican SMEs. The empirical analysis used 125 manufacturing SMEs (each SME having from 20 to 250 employees) as a sample to be carried out. The obtained results indicate that knowledge management has a positive impact in products, process, and management systems innovation