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Big projects (software, engineering, architecture etc.) are plagued by cost and time overruns, or so it is widely thought.

Nicholas Taleb argues in Antifragile that this is a modern phenomenon:

But the puzzle was that such underestimation did not seem to exist in the past century or so, though we were dealing with the very same humans, endowed with the same biases. Many large-scale projects a century and a half ago were completed on time; many of the tall buildings and monuments we see today are not just more elegant than modernistic structures but were completed within, and often ahead of, schedule. These include not just the Empire State Building (still standing in New York), but the London Crystal Palace, erected for the Great Exhibition of 1851, the hallmark of the Victorian reign, based on the inventive ideas of a gardener.

Is this just because we remember the successful ones are is his generalization right? Did we used to do a better job of delivering big projects on time and on budget?

  • Anecdata, but the Eads Bridge in St. Louis was finished more than 3 years late, and more than 6 Million over budget (120m in contemporary dollars). It left it's owners nearly bankrupt. – LessPop_MoreFizz Mar 5 '13 at 23:34
  • In New York, the Brooklyn Bridge cost an estimated 15 million dollars to build - the initial appropriation for construction costs was one tenth of that. It took more than 15 years to build, opening nearly 9 years behind schedule. – LessPop_MoreFizz Mar 5 '13 at 23:38
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    The Empire State Building was completed three months ahead of schedule at the cost of the lives of five construction workers. That's not considered an okay tradeoff in modern times. – Tacroy Mar 6 '13 at 0:40
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    My god, this guy is a treasure trove of dodgy claims. A new Malcolm Gladwell. – Konrad Rudolph Mar 6 '13 at 13:38
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    The Lockheed Skunk Works were known for making new planes under budget. Projects I know of go way over budget because of overoptimistic initial estimates, followed by numerous change requests. – Mike Dunlavey Mar 6 '13 at 15:44
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In fact almost all projects will fail to meet some of the criteria they originally started with. Sometimes they don't make it on time or others fall short on budget. That is the idea most engineers have, and many times they do plan knowing that at some point they won't be able to deliver what was originally intended. Now the reason that they do fail is due to unrealistic expectations from the executive management, or in general people who make the calls without actually having any expertise on the subject, unrealistic planing (sometimes due to pressure), human errors (accidents etc), and a a rather huge reason according to myself is the lack of proper communication (the requirements are not stated clearly so we end up with many time consuming errors). In fact only a third of all projects were successfully completed on time and on budget over the past year according to CHAOS. Please read this for a better analysis.

Also have a look at some notable project failures here.

Continuing on you question on if things are getting worst or not we can safely assume that in fact project success rates are rising rather than falling, according to surveys at least (Have a look here). Personally i do believe this is the case if we exclude IT project. All the factors stated before do apply here as well, and there are just so many project with unrealistic expectations that are deemed to fail in some way (Have a look at this article too).

Summarizing i have to say that project failure rates were dropping over the period from 1994 until 2011, with a high rise last year. Have a look at the tables below for more info.

Standish Findings By Year. Updated for 2009 report.

(Project outcome)   1994    1996    1998    2000    2002    2004    2009

Succeeded           16%     27%     26%     28%     34%     29%     32%

Challenged          53%     33%     46%     49%     51%     53%     44%

Failed              31%     40%     28%     23%     15%     18%     24% 

IT Project Success Factors

1. User Involvement    (15.9%)

2. Executive Management Support    (13.9%)

3. Clear Statement of Requirements    (13.0%)

4. Proper Planning    (9.6%)

5. Realistic Expectations    (8.2%)

6. Smaller Project Milestones    (7.7%)

7. Competent Staff    (7.2%)

8. Ownership    (5.3%)

9. Clear Vision & Objectives    (2.9%)

10. Hard-Working, Focused Staff    (2.4%)

Project Challenged Factors

1. Lack of User Input    (12.8%)

2. Incomplete Requirements & Specifications    (12.3%)

3. Changing Requirements & Specifications    (11.8%)

4. Lack of Executive Support    (7.5%)

5. Technology Incompetence    (7.0%)

6. Lack of Resources    (6.4%)

7. Unrealistic Expectations    (5.9%)

8. Unclear Objectives    (5.3%)

9. Unrealistic Time Frames    (4.3%)

10. New Technology    (3.7%)

Project Impaired Factors

1. Incomplete Requirements    (13.1%)

2. Lack of User Involvement    (12.4%)

3. Lack of Resources    (10.6%)

4. Unrealistic Expectations    (9.9%)

5. Lack of Executive Support    (9.3%)

6. Changing Requirements & Specifications    (8.7%)

7. Lack of Planning    (8.1%)

8. Didn't Need It Any Longer    (7.5%)

9. Lack of IT Management    (6.2%)

10. Technology Illiteracy    (4.3%)

Source

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    I don't think Taleb was greatly concerned between shifts in the last 10-20 years. – user5341 Mar 6 '13 at 11:10
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    Taleb was posing the idea that we were better a century ago (or perhaps pre-computers) than we are now, so trends in the last 20 years or so don't really address his claim. Your answer contains good information, but to a different question (feel free to ask and answer the other question, I would upvote your answer if you did!) – matt_black Mar 6 '13 at 17:21
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    Indeed you are right, after all this is the sceptics Q&A not engineering or finance. I will try to be more relevant in the future, thanks for pointing my mistake. – ealiaj Mar 6 '13 at 17:51

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