Are your cost saving projects saving money?

Well, according to the National Audit Office (NAO) many do not:

  1. The initial costs of sharing ‘back office’ functions (started in 2004) had start up costs of £1.4billion against an estimated £900million. The project was set up to save £159million
  2. Shockingly, 2 departments; Department of Work & Pensions and Department for the Environment, Food and Rural Affairs did not keep track of whether or not the changes were saving money
  3. One positive piece of news is that the Ministry of Justice saved £33 per year and had broken even ahead of schedule – at which point officials stopped monitoring performance

Saving or costing you money

Margaret Hodge, who chairs the Commons Public Accounts Committee, said the overall figures provided “a shockingly familiar story of spiralling costs and poor value for money”.

The NAO found ministers had failed to offer “clear management” for the setting-up of pooled resource centres aimed stopping costs being duplicated.

So, to return to the question; are your cost saving projects saving money – if yes, can you actually show how?

You can

Photo by Stuart miles:
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3 Responses to Are your cost saving projects saving money?

  1. Shim Marom says:

    Ron, this just strengthen my arguemtn, documented in a number of recent posts on my blog, that the biggest obstacle to successful projects is the unethical and immoral behaviour of project ‘officials’. I find it difficult to believe that the project themselves had to wait for the NAO to tell them what they already knew, that they are over-spending. The only logical reason I can find for such reckless behaviour is unethical decision making process.

    • Ron Rosenhead says:

      Shim, thank you for your comments.

      The issue for me Shim is the political dimension. “We need to create an IT system that will link all health service provision” – Was the project realistic? Doubt it but your point comes out here; the behaviour of officials. Did they advise politicians that this was not possible and if they did, despite the advice, did politicians go ahead anyway because of political dogma? I guess we will never know but as the headline screams in the link above; it’s our money poured down the drain!

      Thanks Shim, my guess is that we could stretch this dialogue all the way through this year!

  2. Pingback: Carnival of Project Management #39

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