Your ProcureTech Implementation Timeline Is a Wish, Not a Forecast

Oxford professor Brent Fluberg, and I hope I'm saying that right, studied more than 16,000 projects across 136 countries.

Only 8.5% came in on time and on budget.

If you add delivered the promised benefits to that criteria, it drops to 0.5%.

Mind you, this was across the board in projects, not just IT projects or procure tech projects, but that number is fairly striking, half a percent.

Fluberg calls this the planning fallacy.

It's a term that was originally coined by Nobel Laureate Daniel Kahneman, and it's the systematic tendency to underestimate cost and timelines while overestimating the benefits.

And it doesn't happen because people are incompetent.

It happens because of how we're looking at the problem.

Here's what happens when you plan a ProcureTech project the typical way.

You sit down with your team, you list the tasks, you estimate the durations.

You factor in what you know about your specific situation, such as your data quality, your team's bandwidth, your stakeholder landscape.

You add a buffer.

Maybe it's 15% if you're a fan of the Project Management Institute.

And then you arrive at a number that feels reasonable.

Kahneman and Fluberg call this the inside view.

It treats your project as a unique project and it ignores almost completely what's called the base rate or how other similar projects have actually performed in the real world.

So it's like estimating how long your kitchen renovation is going to take by carefully planning every step against your kitchen and ignoring how long most kitchen renovations of the same size take in general.

The inside view feels rigorous, and that's exactly why it's a dangerous trap.

The fix is what Fluberg calls reference class forecasting or the outside view.

So instead of starting from your project and building those estimates out, you start from the historical record for projects of the same type and you work inwards.

This requires three steps.

Number one, you identify what your reference class is.

So past projects that are comparable to yours in scope and complexity.

And would probably mean your industry.

Number two, you gather actual outcome data, not what those projects were planned to cost or how long they should take, not what it says on the case studies on the vendor websites, not what is shared on the conference stages.

Oxford professor Brent Fluberg, and I hope I'm saying that right, studied more than 16,000 projects across 136 countries.

Only 8.5% came in on time and on budget.

If you add delivered the promised benefits to that criteria, it drops to 0.5%.

Mind you, this was across the board in projects, not just IT projects or procure tech projects, but that number is fairly striking, half a percent.

Fluberg calls this the planning fallacy.

It's a term that was originally coined by Nobel Laureate Daniel Kahneman, and it's the systematic tendency to underestimate cost and timelines while overestimating the benefits.

And it doesn't happen because people are incompetent.

It happens because of how we're looking at the problem.

Here's what happens when you plan a ProcureTech project the typical way.

You sit down with your team, you list the tasks, you estimate the durations.

You factor in what you know about your specific situation, such as your data quality, your team's bandwidth, your stakeholder landscape.

You add a buffer.

Maybe it's 15% if you're a fan of the Project Management Institute.

And then you arrive at a number that feels reasonable.

Kahneman and Fluberg call this the inside view.

It treats your project as a unique project and it ignores almost completely what's called the base rate or how other similar projects have actually performed in the real world.

So it's like estimating how long your kitchen renovation is going to take by carefully planning every step against your kitchen and ignoring how long most kitchen renovations of the same size take in general.

The inside view feels rigorous, and that's exactly why it's a dangerous trap.

The fix is what Fluberg calls reference class forecasting or the outside view.

So instead of starting from your project and building those estimates out, you start from the historical record for projects of the same type and you work inwards.

This requires three steps.

Number one, you identify what your reference class is.

So past projects that are comparable to yours in scope and complexity.

And would probably mean your industry.

Number two, you gather actual outcome data, not what those projects were planned to cost or how long they should take, not what it says on the case studies on the vendor websites, not what is shared on the conference stages.