Optimism Bias in Project Management

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Introduction Projects are widely used by many organizations and government institutions in the course of conducting their business. One of the reasons for this is because they have been proven to be effective in initiating change and translating strategic programs into daily activities. However, it has been established that most projects fail to deliver on time, budget, and customer specifications. In most cases, this failure is caused by over-optimism by the project management team. This over-optimism commonly referred to as optimism bias can simply be defined as overestimating the projects benefits and conversely underestimating its cost and duration time. Research have portrayed that this is often caused by failure to properly identify, understand, and manage effectively the risk associated with the project therefore putting its success at jeopardy(Mott McDonald, 2002). Fortunately, this biasness can be detected and minimized during the project gateway process. Project Gateway Process This process is aimed at ensuring the project being pursued has a potential of delivering by adhering to the allocated time, sticking to the budget and very important, meeting customers specifications (Mott McDonald, 2002). It involves assessing the projects at critical stages (also referred to as gates) in its lifecycle and thus assuring it can advance to the next stage successfully. This function is performed by an independent experienced team, after which they assure the Senior Responsible Owners that the project can progress successfully (National Academies US & National Research US, 2004). There are six critical stages (gateways) in the lifecycle of a project that the independent gateway review team will evaluate and thus provide th... ... middle of paper ... ...0: Strategic assessment. Retrieved from http://www.ogc.gov.uk/documents/cp0004.pdf. Office of Government Commerce. (2007b). OGC Gateway Process Review 1: Business Justification. Retrieved from http://www.ogc.gov.uk/documents/cp0005.pdf. Office of Government Commerce. (2007c). OGC Gateway Process Review 2: Delivery Strategy. Retrieved from http://www.ogc.gov.uk/documents/cp0006.pdf. Office of Government Commerce. (2007d). OGC Gateway Process Review 3: Investment Decision. Retrieved from http://www.ogc.gov.uk/documents/cp0007.pdf. Office of Government Commerce. (2007e). OGC Gateway Process Review 4: Readiness for Service. Retrieved from http://www.ogc.gov.uk/documents/cp0008.pdf. Office of Government Commerce. (2007f). OGC Gateway Process Review 5: Operation review and benefits realization. Retrieved from http://www.ogc.gov.uk/documents/cp0009.pdf.

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