According to a 2009 IDC (International Data Corporation) report on Improving IT
ID: 342996 • Letter: A
Question
According to a 2009 IDC (International Data Corporation) report on Improving IT project outcomes, 25% of IT projects experience outright failure1. Based on the same report, up to 50% of the projects require material rework,and 20% to 25% do not provide Return On Investment (ROI). Project management is documented to be a major cause of IT project failure, whereas it has been part of IT for a long period of time2.
A 2012 Garner study3 revealed that IT project risk increases with size, namely, that smaller projects are less prone to failure than larger ones. Further to this relation, the report sheds light onto the most probable reasons for failure. Thus, it was found that a quarter of the unsuccessful IT projects with a budget larger than $350,000 suffered due to uncontrollably increasing and non-forecasted budgetary costs. A comparison between such projects, those with smaller budgets, and those with budgets over $1M showed that the larger projects have an underperformance rate of approximately 50% or more. The definition of success in a project comes from the Standish Group. Successfully completed IT projects must be completed at a cost equal to the allocated budget, within the deadline, and with complete delivery of the required functionalities. The conclusion of the Gartner report was that only 16.2% of the projects met these requirements and partially unsuccessful projects accounted for 52% of the projects under investigation, whereas 31% have been declared complete failures.
At this point, however, experts are divided over a complete and rigorous definition of success and failure4. Such a definition is typically made by each respective expert through subjective assumptions and conceptions. For most of them, success is equated to achievements, such as on-time and on-budget delivery. Failure, on the other hand, is described as a privative, respectively, the absence of success. However, achieving success is relative to each case through its dependency on parameters specific to each project. This mentality does not create perfect grounds for comparison between projects. Moreover, dichotomy is created by separating various states of success into mutually exclusive categories, either success or the lack thereof, namely, failed projects. The present paper proposes that success—or its absence—can be measured by using the following key parameters: the initial investment made by the sponsoring organization and whether the requirements defined in the beginning have been attained as forecasted. Following this proposal, failure occurs when at least a part of the investment must be forfeited (financial loss) and/or the agreed-upon deliverables have not been achieved.
Very
he reasons for the failure of some of these projects
may have included the following:
little research has attempted an in-depth investigation of failed projects to identify exactly what the factors
were behind the failure. In this article, we share the analysis of two high-profile projects’ failures. The data was
gathered from various public sources. Our analysis indicates that t
1. Unbalanced ecosystems: Projects fail because they cannot survive in their ecosystems. Projects cannot be
executed in unbalanced ecosystems. A project’s ecosystem must be kept balanced. Signs of disturbance
introduced to the ecosystem must be detected and managed accordingly5.
2. Delivering complex transformation is not about meeting the deadlines. Transformations are delivered with
“roadmaps”, not schedules, and by acknowledging and assessing the magnitude of the change to tailor a
delivery strategy.
3. Poor project management practice.
little research has attempted an in-depth investigation of failed projects to identify exactly what the factors
were behind the failure.
Explanation / Answer
The analyst report from IDC and Gartner are pretty similar in reporting that many of IT projects suffer failure. From their report it appears that more than 50% of IT projects require rework and even then about 20-25% do not provide ROI. In addition, the larger an IT project gets, the risk of failure increases.
While these well-known analysts report similar number, there is a debate on what is defined as success or failure for IT projects. The analysts measure success by on-time, on-budget delivery otherwise it is considered a failure.
The paper proposes that the success and failure could be measured by two parameters
However, in spite of these parameters there are still possibilities of failure of an IT project. Some of the factors listed below could still result in failure even if the above two parameters are met.
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