Denver International Airport

Denver International Airport

The City and County of Denver owns and operates Denver International Airport. Under the city charter, the management, operation and control of Denver International Airport is delegated to the city's Department of Aviation. The Manager of the Department of Aviation is appointed by and reports directly to the Mayor of Denver. Denver International Airport is just one example of a project that was well-managed and yet still had extensive delays (sixteen months longer than planned) and enormous cost overruns ($1.5 billion). The problem, according to by Harold Kerzner book " Advanced Project Management," was the automatic bag-handling system, one component of the complex project that was higher risk than the rest of the endeavor but was "treated as if it was a standard, well-proven subsystem." Project management is not the sexiest business and technology subject. However, companies that learn to manage their projects to a successful conclusion have an advantage over their competition. One of the common mistakes among the companies and management teams they studied is they "failed to appreciate upfront the extent of uncertainty and complexity involved (or failed to communicate this extent to each other) and failed to adapt their management style to the situation." The most project problems are managerial and not technical. But knowing that doesn't help managers come up with the right approach if they aren't asking the right questions before they put the systems in place to measure success. And if you're thinking that it's the occasional project that fails, think again. The Standish Group estimated that of the $382 billion spent in 2003 on IT projects in the U.S., $82 billion were a total waste. Moreover, one-third of the failed projects had overruns of 200 to 300 percent. And of the more than 600 projects, 85 percent failed to meet time and budget goals, with an average overrun of 70 percent in time and 60 percent in budget.

The traditional project management guidelines are a good place to start for basic training in the art of project management. The standard approach for project management, they say, is "based on a predictable, fixed, relatively simple, and certain model." However, it is "decoupled from changes in the environment or in business needs." The complex problems that projects face today require project managers to go beyond declaring success when a project is completed on time, within budget, and within performance goals. A new adaptive project management approach that is geared to the individual needs of a project is needed. The authors call for a business-focused, success-oriented project approach that takes into consideration strategic and tactical aspects of project performance in both the short and long term of the project.

There is one central problem that triggered the fiasco. Successful projects are projects in which people make effective decisions and making effective decisions requires a number of ingredients. Chief among those ingredients are knowledge and expertise. Walter Slinger, the airport's Project Management team and even the BAE's Senior Managers did not have prior experience of a system of this scale. In addition, given that automated baggage systems were relatively new, even BAE's Senior Management team only had a limited understanding of what was involved. That lack of knowledge, combined with the fact that expert advice was routinely ignored, is the epicenter of the failure. The initial planning decisions to proceed with one airport, wide integrated system(despite the fact that it was too late to do so) and the firm contractual commitments to scope. Denver Airport Baggage Handling System Case Study - Calleam Consulting© Copyright 2008 Calleam Consulting Ltd, all rights reserved budget all represented decisions that were made by people who lacked the necessary knowledge. The misjudgments resulting from those decisions were the sparks that ignited the fire. We are often faced with situations in which we lack the prior experience to know how to proceed with certainty. The way in which we respond to those situations can spell the difference between success and failure. The first step lies in recognizing the situation and Slinger, The Project Management team and BAE's Senior Manager seem to have fallen at that first hurdle. Had they recognized their lack of knowledge and the uncertainty they were facing, they could have taken a number of steps that would have reduced the risk. Chief among those steps would have been listening to those who did have the necessary prior knowledge.