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What Causes Project Overruns?

When consulting with clients on their AMS projects, I typically advise them to budget an additional 10-25% over what the initial estimate is for system implementation. Why? Because in my experience, most AMS implementations (not all!) will wind up taking longer and costing at least a bit more than originally estimated. Why is that? Here are four of the most common reasons:

  1. Over-optimism on the part of both vendor and customer – With any new project, all parties are excited about the prospect of dramatic improvement. As a result, everyone tends to have stars in their eyes when it comes to the schedule. “Oh sure, we can get that data to you in one day.” “Sure, we’ll do all our testing within 24 hours of receiving new set-ups.” But then reality sets in, and the project takes longer than anticipated. This is just human nature.
  2. Scope change (aka scope creep) – I’ve found that when associations see all the things a new system can do, they tend to come up with even more ideas on how to use the system. This is especially true if they’ve been using particularly old technology. This is a good thing, but it often winds up increasing scope, adding both cost and time to the implementation.
  3. Poor estimating by the vendor – This is kind of a subset of point #1. Vendors often quote effort based on “best case” scenarios (e.g., the data from the client will be 99% clean, the client will thoroughly test configurations, etc.). The reality is the customer is rarely as committed to the project as they claim (for many good reasons; see next point).
  4. Lack of commitment from customer – This may also be a subset of point #1, but it is also the primary reason that implementations run over time and over budget. Staff is unable or unwilling to commit the time needed to keep the project moving. For example, the most common cause of implementation challenges is a lack of thorough testing. Often this is because staff simply doesn’t have the time to do the testing required. Let’s face it, staff have full time jobs already, and adding a project like an AMS implementation on top of their full-time job means something has to give. Often, it’s the implementation that gets the least attention.

So what is the remedy? The first step is acknowledging that AMS implementations are hard. They are typically complex, involving many staff, many decisions, and lots and lots of time commitment. Yes, on rare occasion, an implementation can be done in 90 days. But that’s rare.

The second thing associations can do is to make sure you’ve provided staff with enough time and resources to do the work they have to do during the implementation. The most important thing is to acknowledge that some other work/projects will have to be delayed or pushed to the bottom of the priority list in order to tend to the implementation. If we just add the AMS implementation to an already full plate, it is guaranteed to run over time and over budget.

But even with this, the reality is your project will likely take more time and cost more money than you originally planned. Be prepared for that.