Project managers fight for seat at the table of Centrelink’s $1B overhaul

By Harley Dennett

Monday May 11, 2015

Project managers have called on government to include their profession in project governance from conception of benefits through to realisation, just as the Commonwealth embarks on an $1 billion Centrelink ICT upgrade and $250 million at Australian Bureau of Statistics.

This follows a series of damning assessments showing overspend and under-delivery in public ICT and infrastructure projects.

Yvonne Butler, the newly appointed CEO of the Australian Institute of Project Management, says public project governance stands between a failed project and a successful one. Decision makers are letting a false impression of their own expertise stand in the way of overdue reforms.

She has called on Australian governments to follow the recent UK push to educate senior civil servants in how to deliver large complex projects on time and on budget, and give project managers a seat at the table of the Major Project Authority providing independent assurance of public projects.

“We need to be following suit with countries like the UK,” Butler told government representatives last week.

“We need government to accept its responsibility to the citizens of Australia to more effectively and efficiently deliver outcomes; better use of public moneys to deliver the outcomes that we seek through the discipline of project management.”

It’s not just a Commonwealth issue either. In NSW, 88 recent public infrastructure projects blew out by a collective $900 million, an audit published last week revealed. Contingency funds were being routinely exhausted, auditor-general Grant Hehir said, and independent assurance on the viability of large projects throughout their life-cycle was inadequate.

Gateway reviews — checkouts throughout the project life-cycle designed to flag upcoming problems and provide course corrections — are now standard in federal and state jurisdictions for high benefit, high risk projects. But several audits and reviews in since their introduction have found project oversight bodies are not ensuring compliance, and many projects are falling through the cracks.

A report commissioned by Infrastructure Australia in 2013 found a marginal 10% increase in project success after gateway reviews were implemented federally in 2006. It found an average compliance score of just 24% against Department of Finance requirements, and some 48% failed to meet their baseline time, cost and quality objectives. Around 54% of those failures were attributed to governance.

Australian National Audit Office found a third of projects were still underperforming:

“At least three of the nine projects that have completed the full suite of Gateway reviews up to 30 June 2011 were not completed on-time and on-budget and/or did not deliver the outcomes expected when funding was approved.”

Hehir last week confirmed this was occurring in NSW as well:

“The Treasury Gateway Unit expects agencies to initiate requests for gateway reviews for all seven stages of the project life cycle but sees no role for itself in ensuring this happens. Its view is that sponsor agencies are accountable for complying with government policy. However, our audit identified some confusion among agencies about whether there were seven or two mandatory gateway reviews for projects costing $100 million or more.”

Roxanne Kelley, senior official at the Department of Defence, told the Projects Governance and Controls Symposium on Wednesday the scale of the problem was on the mind of the team implementing the “First Principles Review” One Defence reforms.

“By gate two there should be tender quality prices, not as we’ve had instances of where at gate two, our costings had increased by 500%. So that is not managing a project well. [We’ve] had a few good example where they went ‘oh my god’ — as [First Principles Review team chair] David Peever would say ‘at Rio [Tinto], that’s a sackable offence’.”

Butler told the Mandarin that despite the size of Centrelink’s $1 billion ICT overhaul, there is still a “very high” chance that projects like it can succeed:

“The key is to have the right approach to project management being deployed at the very beginning of the feasibility and scoping stages to ensure the outcomes can be delivered.

“Projects such as the Centrelink project are both complicated and complex and require control mechanisms and governance that are proven and may typically have some element of uniqueness given the stakeholders and transparency requirements.”

Butler adds that she hopes the Gateway reviewers are all experienced and certified project managers.

Accountability, responsibility and benefits-focussed decision-making frameworks are or should be core elements of effective project, program and portfolio governance. Yet it would seem that one or more of these core elements are missing from the delivery of major projects in Australia.

While these issues have been identified for some time, across numerous reports, there does not appear to be any significant moves to change the way that the public sector and government are going to approach project governance arrangements in the short term.

Pretenders in charge

Butler cited the example of meeting with a senior minister who dismissed the warning of inadequate project management governance for public projects: “He cut me short. ‘No no, I know all about project management.’ This was a surprise, a senior minister. ‘Yes, yes, I know all about it; when I did my masters I learned about Gantt charts, so I know all there is to know about project management.’ No surprise that meeting didn’t get very far. It’s a commonly held view that it’s all about a particular tool.”

The UK government took steps earlier this year to rectify the spate of project failings by getting executives up the speed on what project management governance they are supposed to know if they are to overseeing such major public investment from identification of benefits to delivery of outcomes.

The Major Projects Authority has been established by prime ministerial mandate to be the central independent assurance authority responsible for the government major projects portfolio. At the top of their agenda is addressing a shortfall in properly trained project professionals to lead major projects, increasing project leadership capability and appointment of appropriate senior responsible officers and project directors who can deliver.

The initiative represents a change in thinking beyond the standard legislative, regulation and compliance approach through greater investment in the project delivery community at all levels. A subtle shift in language from “project management” to “project delivery” sets a different tone and emphasis for project, program and portfolio leadership and governance.

The focus beyond projects, and recognition that achieving desired benefits across the Portfolio level has a strong relationship with the oversight and decision making framework, says Steve Wake, chairman of Association for Project Management UK. Wake advocates for Earned Value Management methodology as a core component of better project governance:

“A project under control is a great project. It is no longer acceptable not to learn, and not to have a method to show the state of your portfolio.”

There is a reciprocity agreement on EVM in place between UK and US standards agencies, but not so for Australia.

About the author
1 Comment
Newest Most Voted
Inline Feedbacks
View all comments

[…] Project managers fight for seat at the table of Centrelink's B overhaul Project teams, instead of governance, are being wrongly blamed for billions wasted in cost blow-outs and projects that don't deliver. Project managers are lobbying to fix the problem before the Commonwealth embarks on a $ 1 billion Centrelink ICT upgrade. Read more on The Mandarin (registration) […]

The Mandarin Premium

Insights & analysis that matter to you

Subscribe for only $5 a week

Get Premium Today