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    Project Planning and Control: Assignment No. 1

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    Yasir Nasim
    This document contains a research article on addressing optimism bias in project planning and management. It identifies that overly optimistic projections often lead to cost overruns and delays. The proposed solution is to use "reference class forecasting", which involves taking an outside view of similar past projects rather than an inside view. This helps remove biases by learning from other projects' experiences. The conclusion is that reference class forecasting and understanding the context and uncertainties of decision making can help minimize inaccurate forecasts and failures of infrastructure projects.

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    Project Planning and Control: Assignment No. 1

    Uploaded by

    Yasir Nasim
    36 views4 pages
    This document contains a research article on addressing optimism bias in project planning and management. It identifies that overly optimistic projections often lead to cost overruns and delays. The proposed solution is to use "reference class forecasting", which involves taking an outside view of similar past projects rather than an inside view. This helps remove biases by learning from other projects' experiences. The conclusion is that reference class forecasting and understanding the context and uncertainties of decision making can help minimize inaccurate forecasts and failures of infrastructure projects.

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    This document contains a research article on addressing optimism bias in project planning and management. It identifies that overly optimistic projections often lead to cost overruns and delays. The proposed solution is to use "reference class forecasting", which involves taking an outside view of similar past projects rather than an inside view. This helps remove biases by learning from other projects' experiences. The conclusion is that reference class forecasting and understanding the context and uncertainties of decision making can help minimize inaccurate forecasts and failures of infrastructure projects.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views4 pages

    Project Planning and Control: Assignment No. 1

    Uploaded by

    Yasir Nasim
    This document contains a research article on addressing optimism bias in project planning and management. It identifies that overly optimistic projections often lead to cost overruns and delays. The proposed solution is to use "reference class forecasting", which involves taking an outside view of similar past projects rather than an inside view. This helps remove biases by learning from other projects' experiences. The conclusion is that reference class forecasting and understanding the context and uncertainties of decision making can help minimize inaccurate forecasts and failures of infrastructure projects.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    PROJECT PLANNING

    AND CONTROL
    ASSIGNMENT NO. 1

    “Research Article”

    INSTRUCTOR: Mr. YASIR NASIM

    NAME: AROUSHA JAVED


    CMS NO. 13671
    PROGRAM: MS (PM)
    Abstract
    For most of the organizations, projects are the means to do business with effective service
    delivery. But due to overly optimistic biasness, projects lead to time and cost overrun. The
    construction cost, construction completion timeline and operations of the project are the
    main key issues in forecasting projects which affect project delivery. To solve the problem,
    many authors introduced a new forecasting method called ‘reference class forecasting’. It is
    also suggested that project planners are to take on an outside view of the project rather
    viewing the project from an inside view.

    Identificationof Problem
    For most of theorganizations, projects are the means to do business with effective service
    delivery (Weyer, 2011).He also elaborated that for successful project, it has to it must be
    delivered on time, on budget, and according to customer specifications. But due to overly
    optimistic biasness, projects lead to time and cost overrun.Today’s literature suggests to get
    rid of optimism because it is recommended to lead to optimistic bias which leads to faulty
    project planning and bases for high failure rate of projects. Idealistic optimism occurs when
    people perceive greater level of control over the results of projects they want to get(Weyer,
    2011).Jennings, (2012) didresearch on Olympic Games and explained that large scale
    construction and infrastructure projects are under-estimated because project makers have
    optimistic biasness.Siemiatycki, (2010) suggested that optimism bias has been a
    considerable challenge in the planning and delivery of public services, mainly infrastructure
    mega projects. He explained that the construction cost, construction completion timeline
    and operations of the project are the main key issues in forecasting projects which affect
    project delivery. Nunns suggested that number of bad projects get built on the back of over-
    optimistic business cases. The average project has cost overrun of 34% and actual benefits
    has 28% lower than expected.Recent public transport infrastructure projects have
    outperformed their business cases. Allahaim, (2011) revealed the two main causes of cost
    overruns that are optimism bias and strategic misrepresentations. He further suggested that
    optimism biascondenses the systematic tendency of decision makers to be over-optimistic
    aboutoutcomes of scheduledand planned actions.

    Proposed Solution
    Weyer, (2011) suggested that many authors introduced a new forecasting method called
    ‘reference class forecasting’. With the help of this method project planners are to take on an
    outside view of the project rather viewing the project from an inside view. He suggested
    that optimism should be tempered with or eliminated. He also recommended that by social
    cognitive theory and conducted by a multidisciplinary team of researchers may help to solve
    the paradox. Furthermore, Jenning, (2012) suggested solutions targeted at changing over-
    optimistic cultures at the project adoption phase.Siemiatycki, (2010) revealed thatalongside
    other strategies, in an increasing number of countries, systems have been implemented to
    benchmark the performance of contractors working on public projects, and link past
    performance with the likelihood of obtaining future work. However, when combined with
    incentives built into government procurement process that reward strong past
    performance, there is evidence that benchmarking can drive up the quality of project
    outputs.

    Conclusion
    For ending up the discussion, I conclude that to tackle with the problem of infrastructure
    projects failure, reference class forecasting is adequate as the techniques suggests that
    project planners are to take on an outside view of the project rather viewing the project
    from an inside view.
    In response to these challenges, governments and non-governmental organizations in a
    number of countries have developed strategies to minimize inaccurate forecasting by using
    reference class forecasting. It is also concluded that to understand the determinants of cost
    over-runs it is important to locate budgeting in context and recognize the problems inherent
    to decision-making under conditions of uncertainty.

    Bibliography
    1. Peter Nunns
    http://transportblog.co.nz/tag/optimism-bias/
    Is road funding a case of “survival of the un-fittest”?
    By Peter Nunns, on November 17th, 2014
    Senior Economist at MRCagney, Auckland, New Zealand

    2. Fahad Allahaim &Dr. Li


    Liuhttp://www.academia.edu/2513891/UNDERSTANDING_MAJOR_CA
    USES_COST_OVERRUN_FOR_INFRASTRUCTURE_PROJECTS_A_TYPOLO
    GY_APPROACH

    By Fahad Allahaim &Dr. Li Liu


    King Saud University, Architecture and Building Sciences, Faculty Member
    College of Architecture and Planning, King Saud University, and PhD candidate,
    School of CivilEngineering, Faculty of Engineering and IT, The University of
    Sydney,fall5762@uni.sydney.edu.au* Corresponding author 
    Dr. Li Liu, School of Civil Engineering, Faculty of Engineering and IT, the University of
    Sydney,li.liu@sydney.edu.au 

    Reference
    Allahaim, F., Liu, L. ().Understanding Major Causes Cost Overrun for Infrastructure
    Projects a Typology Approach.
    3. Prof. Dr. Birgit Weyer
    http://www.mba-berlin.de/fileadmin/user_upload/MAIN
    dateien/1_IMB/Working_Papers/2011/WP_59_online.pdf

    Department of Cooperative Studies Professor in Job-Code: Prof.

    Perspectives on Optimism within the Context of Project


    Management: A Call for Multilevel Research (Paper No. 59 Date:
    01/2011)
    T: +49 (0)30 30877-2050
    F: +49 (0)30 30877-2059
    E: birgit.weyer(at)hwr-berlin.de

    4. Will Jennings
    https://olymponomics.files.wordpress.com/2012/07/jenningscme.pdf

    University of Southampton, Politics and International


    Relations, Faculty Member

    Why Costs Over-Run: risk, optimism and uncertainty in budgeting


    for the London 2012 Olympic Games

    Research Interests:
    Politics And Sociology Of Risk, International Journal Public Policy, Political
    Science, Public Administration, Risk Management, Comparative Politics

    5. Matti Siemiatycki
    Issue 10(1), March 2010, pp. 30-41, ISSN: 1567-7141

    www.ejtir.tbm.tudelft.nl
    Managing Optimism Biases in the Delivery of Large-Infrastructure
    Projects: A Corporate Performance Benchmarking Approach
    Assistant Professor, Geography & Planning, University of Toronto

    Matti Siemiatycki an assistant professor of Geography and Planning at the


    University of Toronto. His teaching and research focus on infrastructure planning.

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