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CRITICAL SUCCESS FACTORS FOR PROJECT PERFORMANCE:

A STUDY FROM FRONT-END ASSESSMENTS OF LARGE PUBLIC PROJECTS IN NORWAY


OLAV TORP, KJ ELL AUSTENG AND WUBISHET J EKALE MENGESHA
(NORWEGIAN UNIVERSITY OF SCIENCE AND TECHNOLOGY, NTNU)


0. ABSTRACT

As a response to frequent cost overruns in large Public Investments Projects, the Norwegian Ministry of
Finance initiated in 2000 a quality assurance scheme to ensure quality-at-entry of major Government
funded projects before funding is appropriated. One part of this quality assurance scheme is identifying
Critical Success Factors (CSF) and Potential Pitfalls (PP) early during the Front-End Assessment. This
paper reviews the conceptual framework and theory of CSFs and PP, presents what have been learned so
far from the data collected through the quality assurance scheme and looks into how the theoretical
background relates to the findings. In some cases it was found that what was declared as CSFs were
associated to PPs when they are lacking. It was also found that what was considered CSF in some projects
was, in opposite words, considered as PP in other projects. That is, evidences from the case studies largely
showed that lack of Critical Success Factors are considered Potential Pitfall and vice versa. Besides,
Project Organization, Contract Management, Project Planning and Controlling, and Stakeholder
Management, were found highly associated to these CSFs and PPs, both in literature and in the case
studies. However Top Management Support, External conditions such as market & politics were given less
importance in the case studies than in literature. When comparing building projects to road and railway
projects we see two differences. Design management and objective management appear to be a success
factor in building project, but they are not so visible in construction projects. This might be caused by more
visible and stronger user groups in building projects.

Keywords: - Critical Success Factors, Potential Pitfalls, Front-End Assessment and Quality Assurance.

1. INTRODUCTION

As a result of the quality assurance scheme 10-20 of the largest projects are annually subjected to a
thorough external review of anticipated costs, time schedule and major uncertainties that might affect the
projects outcome, before the budget is submitted to the parliament. This is mainly transport (road and
railway), building and defense projects, all exceeding 500 MNOK. The external review is performed by
consultants with framework agreement with Ministry of Finance. The external reviewer is among other
things expected to point out the most important Critical Success Factors and Potential Pitfalls of the project.

The Concept research programme (Concept, 2004) was started in 2002 with the long-term objectives to
improve initial concept selection, better usage of resources and ultimately to achieve higher value-added in
major government funded projects. It is designed to conduct trailing research on the quality assurance
scheme. The trailing research has so far among other things resulted in development of a database
(Trailbase), where data from quality assured projects are collected. For now, this database contain data
from the external review, among other things on CSFs and PPs.

Identifying CSFs and PPs early enough before project formulation is vital to minimize surprising variations
during project implementation. This paper addressed the use of such factors on Civil Engineering projects
of Norway in comparison to their recent conceptual developments. We found it interesting to study
similarities and differences between different projects and different types of projects, regarding what
Critical Success Factors and Potential Pitfalls the consultants have identified as the most important. Those
findings are compared to what the literature states to be most important.



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2. PUBLIC PROJECTS IN NORWAY AND USE OF QUALITY ASSURANCE SCHEMES

This paper considered 14 Public Civil Engineering projects of which, ten, three and one were Road,
Building and Railway projects respectively, se table 1. The expected costs of the projects were from among
500 MNOK up to 3500 MNOK. An external review is performed for these projects, and the projects are
recently given funding. The projects are now in the detail design or early in the implementation phase.
These projects were considered as cases to see into the Critical Success Factors and Potential Pitfalls
identified for their fit with recent conceptual developments.

Table 1: Number of projects of different types and their cost range.
Project type Number of projects Costs (Mill NOK)
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Road Projects 10 520 900
Railway Projects 1 3.500
Building Projects 3 530 3.000

3. CRITICAL SUCCESS FACTORS (CSFs) AND POTENTIAL PITFALLS (PPs)
CONCEPTUAL REVIEW

Identifying Critical Success Factors and Potential Pitfalls early enough during the Front-End Assessment of
projects is a vital start for ensuring successful project completions. This is with a belief that there are
certain major factors whose influences are considerable to project performances such that they during basic
planning will enhance the successful completion of projects.

Identifying CSFs and PPs will help project teams to minimize firefighting, intuitive and adhoc approach in
managing uncertainties and changes encountered during project implementation, (Pinto and Kharbanda,
1996). That is, they acknowledged that the measure of successful project implementation is not the
avoidance of problems but knowing (beforehand as much as possible) how to respond to when problem
develops.

Accordingly Pinto and Slevin (Pinto & Slevin, 1987 and 1988) and Pinto and Kharbanda (Pinto and
Kharbanda, 1995) vigorously dealt with CSFs and PPs as applicable to projects (having acknowledged the
concept of success and failure as ambiguously defined terms) reiterated that a more refined effort to reveal
these factors together with their interrelationships is important. Pinto and Slevin (Pinto & Slevin, 1988)
further developed the notion of success and presented three key factors for successful project completion.
These are Technical validity, Organizational Validity and Organizational effectiveness.

The search for CSFs has been dealt since 1967. Table 2 showed that CSFs to projects moved from a
mechanistic approach to success determination which was relying on purely technical system and the
traditional Cost Time - Quality constraints to a combination of social and technical systems.

Table 2: Development of Success Factors over time (Mengesha, 2004)
Source Critical Success Factors
(Ruben and Seeling,
1967); Empirical
Technical performance as a measure of success. Project manager's experience has
minimal impact but the size of previously managed project does affect the
manager's performance
(Sayles & Chandler,
1971)
Project manager's competence; Scheduling; Control systems and responsibilities;
Monitoring and feedback; and Continuous involvement in the project
(Martin, 1976) Clear goals; Selection of project organizational philosophy; General management
support; Organize and delegate authority; and Selection of project team.

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Expected costs of each project, results from the consultants uncertainty analysis.
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Source Critical Success Factors
(Baker, Murphy and
fisher, 1983);
Empirical
Clear goals; Goal commitment of project team; On-site project manager;
Adequate funding to completion; Adequate project team capability; Accurate
initial cost estimates; Minimum start-up difficulties; Planning and control
techniques; Task - social orientation; and Absence of bureaucracy.
(Cleland and King,
1983)
Project summary; Operational concept; Top management support; Financial
support; Logistic requirements; Facility support; Market intelligence; Project
schedule; Executive development and training; Manpower and organisation;
Acquisition; Information and communication channels; and Project review.
(Morris and Hughes,
1987); Empirical
Project objectives; Technical innovation uncertainty; Politics; Community
involvement; Schedule duration urgency; Financial contract legal problems; and
Implementation problems.
(Pinto and Slevin,
1987)
Project objectives, Top management support, project planning, communication
with client, human relations, technical tasks, client acceptance, project control,
communication and problem handling
(Tukel & Rom,
1995); Empirical
Top management support; Client consultation; Preliminary estimates; Availability
of resources and Project managers performance.
(Walid & Oya,
1996); Empirical
Factors related to the project; the project manager and the team members; the
organisation; and the external environment.
(Pinto and
Kharbanda, 1995)
Mission at the forefront; Early & Continual Client Consultation; Technology;
Scheduling system; Project team; Top Management Support and Continual What
if? Approach.

Belout (Adnane Belout, 1998) has also revealed the domination of technical system and indicated lack of
consideration with regard to behavioral system. This is associated with the dominance of Analytical
principle that Project Management has developed so far and its fragmented theoretical developments with
regard to organizational and behavioral principles (Mengesha, 2004). As a result, he suggested that CSFs
recent development need to integrate Analytical and Organizational factors to enhance the successful
completion of projects. On the other hand, Potential Pitfalls have also received attention because learning
from mistakes is vital. Accordingly Rosenau (Rosenau, 1998); Harrison (Harrison, 1997) and Frame
(Frame, 1987) identified the PPs as related to Organizational factors, Planning and Control factors and
Human factors. They further argued that inability to deal with Critical Success Factors explained
contributory to Potential Pitfalls. In addition research in Project Management so far focus largely on the
planning and controlling aspect of Potential Pitfalls.

Summing up what the literature says about CSFs and PPs, we see a shift in focus over time from purely
Technical issues towards Organizational and Management issues. The Technical issues are still important,
but there are other issues stated as well as important. This is issues like Top management support,
Organizational issues, Stakeholder management, coordination and Human relations.

4. FINDINGS: CSFs & PPs CONSIDERED IN LARGE PUBLIC PROJECTS

In some cases it was found that what was declared as Critical Success Factors were associated to Potential
Pitfalls when they are lacking. It was also found that what was considered CSF in some projects was, in
opposite words, considered as PP in other projects. That is, evidences from the case studies largely showed
that lack of CSFs are considered PPs and vice versa. Therefore, when presenting the results from the case
studies, we do not separate between Critival Success Factors and Potential Pitfalls.

Accordingly, Table 3 lists the findings together with their importance considered as CSFs and PPs. The
results tell in how many of the 14 projects the item is considered as CSF or PP. As a result, Project
Organization and Management; Contract Strategy and Project Planning and Control were found highly
associated to CSFs and PPs. These were followed by Stable Framework conditions and Stakeholder
management. However, Technical factors, Nature and Market conditions, Objective management, and Top
Management Support were given less importance. These evidences indicated a focus on organic approach
which was found in line with recent conceptual developments and theory covered in section 3 of this paper.
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Human aspects are not that visible in the observations, however they are an important part of item 1, 2, 3
and 5. Subsequently, the following analysis and discussions were forwarded.

Table 3: CSFs & PPs based on Empirical findings
Item CSFs & Potential Pitfalls
1 Project Organization 11
2 Contract Strategy 9
3 Project Planning & Controlling 9
4 Stable Framework Conditions 8
5 Stakeholder management 8
6 Technical Factors 4
7 Nature and Market conditions 4
8 Objective Management 3
9 Top Management Support 2
10 Interface towards surrounding projects 1
11 Management of Design 1

Project Organization factors (suitability and adequacy of its structure such that authority and responsibility
matches, how clear its relationship with its parent organization is, continuity and capacity in the
organization and efficient decision making) is pointed out as important in 11 of the 14 projects. Two of the
projects that did not have the Project organization among the most important success factors were road
projects run as Private Public Partnership. There the Project Organization (Project Owners Organization)
might be of less importance in the overall picture. Those projects have to look much longer than to the
project completion. Theory states that Project Organization is an important success factor. Stakeholder
management and Contract strategies were identified as separate factors which are conceptually considered
part of organizational issues.

Contract strategy (number of and size of the contracts, interface between the different contracts, and
management of the contracts) is picked out as an important item in 9 of the 14 projects. Among the
identified literature, it is only Morris and Hughes, (1987) that has identified contract issues as an important
success factor, but it is often considered a part of the organizational issues.

Project planning and controlling include cost and time control, change management, risk management and
quality of the planning. Literature brings this up as success factors in project performance in different ways.
Pinto and Slevin (Pinto and Slevin, 1987) identify both planning and control as important. Others identify
schedule control and preliminary estimates as important.

According to the case study, stabile Framework conditions are important for a project to succeed. A
constant change in Framework conditions will have negative impact on the project process, and the project
performance. The literature does not confirm this directly, but items like adequate funding and realistic cost
frames could be recognized in the literature. Stakeholder management is an item identified as important in
the case study. In the literature we can find items like client consultations, Community involvement and
communication and information that could imply that stakeholder handling is important.

This study revealed Technical factors and External conditions (market, political etc) as less important. This
is in line with trends in the theory. On the other hand, it might also be indicative that technology has
received unprecedented importance which can be looked into as further research. Furthermore this study
has identified Top Management Support as less important than the literature states. This could be
associated with the social relationship and their cultural values that focus on collaboration.

When comparing building projects and road/railway projects, there were two items that only occurred as
success factors in building projects; Design and Objective management. This might imply that it is easier
to identify well defined and anchored objectives in road/railway projects than in building projects. Design
management also seems to be of greater importance when performing a building project. This might imply
that it is easier to design construction projects, and to identify the objectives in road/railway projects than in
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building projects. User groups are also more visible and stronger in building projects. Regarding the other
CSF and PP, we could not see any differences between building and road/railway projects.


5. CONCLUSIONS

Archival records from the database (Trailbase) served as data sources in this study. We have studied 14
projects and compared them to findings in the literature concerning Critical Success Factors and Potential
Pitfalls. This paper concludes that findings from the case studies are inline with recent theory and
conceptual developments, except for some areas. Top management support and Objective definition and
understanding are factors the literature identifies as important, but that is not visible in the findings from
the case studies.

We have identified differences between building and road/railway projects when regarding Design
management and Objective definition/anchoring. These items seem to be of greater importance in building
projects than in road/railway projects. This might be caused by more visible and stronger user groups in
building projects than in road/railway projects.

The number of projects in Trailbase is increasing, and it would be interesting to see if we got the same
results when including a higher number of projects. The database gives data from one stage in the project
life-cycle; at the time of external review. It would be interesting to expand this study with data from other
stages of the projects, when they become accessible in Trailbase. It would be interesting to study the
projects, regarding what the Success Factors and what the Pitfalls were during detail planning and
implementation.

6. REFERENCES
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