Unrealistic Project Goals: Detection and Modification
Publication: Journal of Construction Engineering and Management
Volume 150, Issue 3
Abstract
Determining whether to invest in a project is a complex and challenging decision. This project investment decision relies heavily on its promised strategic goals (i.e., target benefits) stated in its business case and which are expected to be realized following project completion. However, in many cases, the proposed project benefits are far greater than those that the project realistically can achieve, leading to the risk of projects being funded erroneously. The construction management literature has offered approaches such as reference class forecasting (RCF) to rectify unrealistic project estimates. This paper identifies weaknesses in the current approaches, exposes their inefficiency, and proposes a step-by-step stratified approach as an effective alternative to detect, measure, and rectify unrealistic estimates of project benefits, and utilizes the proposed approach on a light rail construction project. The contribution of this approach is that each project benefit target can be rectified differently, based on the measurable levels of deviation from more-realistic estimates. This paper advances the construction management literature by enabling managers to set realistic project goals in the project front end, increase the reliability of estimates in the project business case, and improve the quality of project investment decisions.
Practical Applications
The decision to fund a construction project is impacted by information included in business cases and proposals, such as the estimated project cost and expected goals. However, such information often is unrealistic or exaggerated (to make the project more attractive for funding), which negatively impacts investment decisions made by senior executives. As a result, projects can be funded erroneously, causing a waste of resources and potential failure to achieve its unrealistic expectations. Because the existing literature offers little guidance for how to ensure that project goals are realistic, this paper developed and illustrates a step-by-step process for measuring and rectifying the gap between proposed and realistic project goals to alert senior executives when a proposed project is unlikely to meet its proposed goals.
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Data Availability Statement
All data, models, and code generated or used during the study either appear in the published article or are publicly available.
Acknowledgments
The authors express their appreciation for the reviewers’ comments and concerns, which not only improved the quality of the paper but also led to methodological advancement of the proposed approach.
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Journal of Construction Engineering and Management
Volume 150 • Issue 3 • March 2024
Copyright
© 2023 American Society of Civil Engineers.
History
Received: Feb 14, 2023
Accepted: Oct 12, 2023
Published online: Dec 21, 2023
Published in print: Mar 1, 2024
Discussion open until: May 21, 2024
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