Before any project gets off the ground, one would hope that the costs and benefits have already been carefully weighed up to make sure they balance out and that the project plan includes measures that assist in identifying when the project costs are too high and start to outweigh the benefits.

“But even for projects with billions of dollars at stake, this does not always seem to happen,” says online provider of programmes, projects, requirements, testing and product development modules Psoda CEO Bruce Aylward.

While National Aeronautics and Space Administration (Nasa) estimates that the International Space Station has cost US taxpayers $50-billion since 1994, with a host of other nations also chipping in to make up the total $100-billion cost, Nasa seems to have been unable to definitively show if the investment in the station will ever really pay off.

Critics argue that with $1-billion – a fraction of the cost of the station – Nasa could have funded the work of 1 000 scientists on earth for five years.

Aylward says the International Space Station spend teaches two important lessons about managing projects efficiently, namely the need to understand the cost-to-benefit ratio of a project and knowing when to stop or suspend a project when the cost outweighs the benefits.

“The cost-to-benefit ratio of a project should be revalidated regularly, as it is good management practice to conduct a review as part of the stage-gate review process. It should, however, also be reviewed if there is a significant scope change as this event is likely to influence the ratio and could push a project into the unviable zone,” he notes.

Stopping or suspending a project is most project managers’ worst nightmare, as the perception is that by stopping a project the project manager has somehow failed. Yet, taking that decision is one of the smartest moves a project manager can make, says Aylward.

A way to make this difficult call easier is to have a steering committee sign off on stop metrics in the business case. As the name suggests, these are a set of numbers that, if breached, mean that the project is automatically stopped.

This gives the project manager a guaranteed exit strategy that the steering committee cannot ignore, says Aylward.

“Asking something that costs $100-billion to justify its existence is a tall order and while Nasa may be able to get away with such stratospheric costs without showing definite return-on-investment, back on earth in the project management world, we don’t have that luxury and project managers, generally, all have to justify the cost of their projects,” he explains.

A full understanding and record keeping of the cost-to-benefit ratio of a project will help a project manager know when to stop or suspend a project when the cost outweighs the benefits, adds Aylward.

“Trying to abandon the mission when the rocket is already on the launch pad with its thrusters ready to ignite, is probably too late and any project manager worth their stripes should know when to pull the plug before a project has progressed too far,” he concludes.