Double Whammy – How ICT Projects are Fooled by Randomness and Screwed by Political Intent
Author: Flyvbjerg, B. & Budzier, A.
Title: Double whammy–how ICT projects are fooled by randomness and screwed by political intent
Year of Publication: 2011
Journal: Said Business School, Working Paper
Abstract: The Iron Triangle 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 decisionmakers 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?