{"id":5041,"date":"2023-09-21T08:00:00","date_gmt":"2023-09-21T06:00:00","guid":{"rendered":"http:\/\/www.se-trends.de\/?p=5041"},"modified":"2023-11-22T13:55:36","modified_gmt":"2023-11-22T12:55:36","slug":"implementing-large-scale-projects-with-a-platform-strategy","status":"publish","type":"post","link":"https:\/\/www.se-trends.de\/en\/grossprojekte-mit-plattformstrategie-umsetzen\/","title":{"rendered":"Implementing major projects correctly: Why a platform strategy delivers better results (Part 1)"},"content":{"rendered":"

What do the iPod\/iPhone app store and the National Program for Information Technology (NPfIT) have in common? The first was an infrastructure project by Apple, the second by the UK National Health Service (NHS). Both projects were about building a digital ecosystem. Although both major projects had a similar amount of resources (money, staff), only one was a success. While Apple now has an app store with more than 2 million apps and generates billions in revenue, NPfIT has delivered less than ten apps, with a massive budget overrun (from \u00a32.3 to \u00a312.4 billion).<\/p>\n\n\n\n

This article is not about comparing public and private projects. It is about how large projects are organized, as one-off projects or with a platform strategy. The result Repeatable projects are able to achieve more positive results faster, cheaper and with a lower risk of failure than one-off projects. This article is based on research by Atif Ansar and Bent Flyvbjerg of Oxford University.<\/p>\n\n\n\n

This article is part 1 of this article describing the research findings. Part 2 next week will deal with specific recommendations to help organizations better implement large-scale projects.<\/p>\n\n\n\n\n\n\n\n

The paper<\/h2>\n\n\n\n

The authors published their paper in 2022 under the title How to Solve Big Problems: Bespoke Versus Platform Strategies<\/a>. By \"bespoke\", the authors mean one-off large-scale projects. Platforms, on the other hand, start small but have the ambition to become big. The introduction already anticipates the result: a platform strategy drastically increases the chances of success. More on this in a moment.<\/p>\n\n\n\n

What is a \"major project\" anyway? (Update!)<\/h2>\n\n\n\n

One of the questions I received about this article was the definition of a \"major project\". In fact, this term doesn't really reflect the intention of the article very well. The article uses the rather unfamiliar term \"Bespoke\". On two pages, the authors explain in detail what they mean by this. They summarize it as follows:<\/p>\n\n\n\n

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We interchangeably use 'bespoke', 'big one-off', and 'quantum leap' to describe strategy designed to achieve big goals in one bold step.<\/p>\nHow to Solve Big Problems: Bespoke Versus Platform Strategies<\/a><\/cite><\/blockquote>\n\n\n\n

So it's not really about the size of the project, but about the size of the challenge. <\/p>\n\n\n\n

Case Study: Space travel<\/h2>\n\n\n\n

In their investigations, the authors focus on the Space travel<\/a>as this presents us with many major challenges. We can also compare the projects that have been carried out more easily, as the framework conditions are similar. Finally, we also find a comparatively large amount of accessible data in the space sector, as these were often financed with public funds. This even applies to projects carried out by private companies, which are often at least partially publicly funded.<\/p>\n\n\n\n

Specifically, this study compares the performance of NASA and SpaceX space missions. It analyzes costs, cost overruns, time-to-market, schedule overruns and scalability. The research covers 203 space missions, 181 of which were launched by the NASA<\/a> (1963-2019) and 22 from SpaceX<\/a> (2002-2021) were conducted. The analysis reveals significant differences, particularly in costs, with SpaceX having about ten times lower costs and cost overruns 80 times lower than NASA. Sensitivity analyses suggest that these differences are not due to different cost measurements. Despite methodological challenges, the results represent real differences between the organizations.<\/p>\n\n\n\n

We all know the result SpaceX was ridiculed in 2002. The company now carries out two thirds of commercial rocket launches. The authors are keen to point out that this is not about belittling the public sector and strengthening the private sector. Rather, it is about showing that platform-based projects, regardless of whether they are carried out by public or private companies, systematically perform better than one-off large-scale projects.<\/p>\n\n\n\n

Reduce costs<\/h2>\n\n\n\n

The authors address the issue of costs in detail. This concerns both the costs for the customer and the project costs.<\/p>\n\n\n\n

For customers, the most important metric is the dollar amount required to launch one kilogram of payload into low earth orbit (LEO). For SpaceX Falcon Heavy<\/a> this is $1,400 per kg, about 2% compared to the Space Shuttle<\/a>. <\/p>\n\n\n\n

NASA itself carried out an investigation into the development costs of the Falcon 9 in 2010. This cost $390 million. NASA estimates that a conventional development of the same rocket would have cost between $1.7 and $4.0 billion.<\/p>\n\n\n\n

Control costs<\/h2>\n\n\n\n

SpaceX's platform strategy also outperforms NASA's in terms of cost adherence, measured as cost overruns against the final approved baseline budget. This is a point that I see more and more often, especially in recent years: organizations have a huge problem with controlling costs. Calculating costs and avoiding \"nasty surprises\" are becoming increasingly important.<\/p>\n\n\n\n

The following table from the paper shows the drastic differences. It is particularly remarkable how small the deviations from the planned costs are for SpaceX (standard<\/p>\n\n\n\n

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