Leading Financial Services Company Uses Project Simulator to Identify Schedule and Budget Risk in Custom Software Development

Overview and Problem Summary

A leading financial services company with a portfolio of hundreds of concurrent projects and nearly $100M in annual spend was experiencing significant gaps in actual vs. forecasted spend across their projects. Lack of estimating transparency between the technology and business groups was resulting in wildly inaccurate forecasts, missed business expectations, and an inability to realize cost-benefits as planned.

As a result of the flawed estimating process, each project was costing the company 237% more than original forecasts. The accidental spend was an enormous drain on the company’s working capital and time to market on new products.

Our team was asked to improve the accuracy of the company’s project estimates by leveraging our proprietary technique. A risky, highly visible candidate program was selected for a pilot. The candidate program consisted of multiple interdependent multi-year projects.

The Solution

The Enabled Concept team utilized our Project Simulator to analyze the project schedule.  We started with their existing project schedule.  Worked with their team to identify potential risks and impacts.  Input those risks and impacts into our Monte Carlo simulation engine which simulated the running of the project thousands of times.

The output of the simulation is a risk adjusted schedule which shows the likelihood of hitting the completion date as well as the most probable completion dates.

Results

Analysis revealed the current forecasts were 43% inaccurate compared to a risk adjusted forecast, equating to a 15 month delay in meeting business expectations and potential cost of millions of dollars.

Changes to team structure and a focus on developing an appropriate risk mitigation strategy were made as a result of the analysis by the company on the project to avoid the projected delays.

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