The Importance of Portfolio Analysis & Communication for Project Success: A Government Impact Story
In 2005, the City of Palo Alto completed a technically ambitious project: building a pedestrian tunnel underneath the Caltrain system in the Bay Area while the railway was in full operation. This entailed developing the tunnel while simultaneously shoring up the tracks that supported the train.
The project was considered essential because the train tracks sit between the majority of the Palo Alto community and a vital hospital system. The tunnel would allow the community to walk directly to the hospital rather than drive for several minutes unnecessarily. The project was envisioned to cost $4.1 million and be used by more than 5,000 pedestrians per day.
Instead of meeting the estimated cost, the project totaled over $5.4 million and it was initially used by only 300 people per day. If you were to make your way across the United States, you would see hundreds of similar projects.
In the case of the tunnel, it was a great mystery as to why people were not using it. City officials conducted an extensive survey before the project began which clearly showed why the project should be completed. Most of the residents (including myself) predicted that the tunnel would be well traveled.
So, what went wrong? As it turned out, there was another project that was kicked off at the same time. Bike paths around the city were being expanded including one that ran behind the hospital that connected to the tunnel. The bike path not only took the residents to the hospital, but it also had other popular stops, including a shopping center, the train station, the local high school, and an outdoor mall.
What many did not realize was that the tunnel project was competing with the expansion of the bike trails. The result was that one undermined the other. Over time, the projects reached a balance in the community and the traffic for the tunnel picked up a bit, but it leaves a nagging question about projects like this - why was this not understood before either project had been kicked off?
Each project was analyzed financially. Each project had entailed a community survey which indicated success. So what were the errors that disrupted the expected successful outcome?
The foot and biking traffic were not evaluated against each other to understand both community preference transportation and the impact the other stops on the bike trail would have on the tunnel.
Each project was sponsored by different departments within the city and the research done for both was not well communicated.
The two city departments should have conducted a joint study to understand how one project would impact the other project. By collaborating and analyzing across the city’s portfolio of projects, the likelihood of uncovering the potential conflict in reaching project success would have improved.
This impact story is not unique. Across all industries, strategic decision making is often done in a silo. There are many reasons for this shortcoming including:
Lack of technical tools to model, simulate, and analyze across projects and portfolios
Lack of communicative tools that communicates both project and portfolio analysis, and would evidently increase the final outcome due to enhanced cross-company communication and collaboration.
The point is that without the capabilities to bounce the outcome of one project off of another, it is nearly impossible to predict what is likely to happen and how to arrive at an optimal outcome. Yet, only 23% of organizations use standardized project management practices across the entire organization, whereas 33% use standardized practices, but not across all departments.
With low project standardized practices, the likelihood of having the projects or portfolio contradict each other is high. In order to not waste any resources, in this case the taxpayers money, it is important to have a thorough understanding of everything that might affect your project or portfolio, and not analyze each project individually. This because if you do analyze them individually, you risk missing out on highly influential dependencies on your project or portfolio.
Conclusively, curating project data, running simulations, projecting outcomes and extrapolating potential outcomes against other projects means that you have fewer surprises and can avoid waste in government, or any type of project or portfolio oriented organization for that matter.