Statistics on IT projects failure rate

Before embarking on a “strategic” project, every organization should be aware of its chances of success. Statistics of IT project failure rate provide a good measure of those chances. The purpose is to make executives undertaking large projects ponder on how to approach this endeavor to maximize their chances of success.The following surveys provide statistical data about the rate of failure of IT projects.

• The KPMG Canada Survey (1997)
• The Chaos Report (1995)
• The OASIG Survey (1995)

 The KPMG Canada Survey (1997)

In April 1997, KPMG Canada sent a survey questionnaire focusing on IT project management issues to Canada’s leading 1,450 public and private sector organizations. The main purpose was to outline the reasons behind the failure of Information Technology projects.

Survey Scope

Out of 1,450 questionnaires sent, 176 were analyzed. Of these, 61% reported details on a failed IT project.

Key Findings

Over 61 % of the analyzed projects had failed according to the respondents. More than three quarters went over their schedules by 30% or more; more than half exceeded their budgets by a substantial margin. Considering that an estimated $25 billion is spent on IT application development  in Canada annually, the survey data indicated that unbudgeted IT project expenditures must run into the billions of dollars.

The Chaos Report (1995)

The Chaos Report was a landmark survey made by the Standish Group. This report is the study of IT project failure and is widely cited when IT project failures are being discussed.

Scope of the Study

The respondents to the Standish Group survey were IT executive managers. The sample included large, medium, and small companies across major industry segments: banking, securities, manufacturing, retail, wholesale, heath care, insurance, services, local, state, and federal organizations. The total sample size was 365 respondents representing 8,380 applications. In addition, The Standish Group conducted focus groups and personal interviews to provide a qualitative context for the survey results.

Key Findings

The Standish Group research showed a staggering 31.1% of projects would be cancelled before they ever get completed. Further results indicated that 52.7% of projects will cost over 189% of their original estimates. Based on this research, The Standish Group estimated that in 1995 American companies and government agencies would spend $81 billion for cancelled software projects and paid an additional $59 billion for software projects that would be completed, but exceeded their original time estimates and projects completed by the largest American companies had only approximately 42% of the originally-proposed features and functions.

The OASIG Study (1995)

This study was undertaken under the auspices of OASIG, a Special Interest Group in the UK concerned with the Organizational Aspects of Information Technology.

Scope of the Study

Information was collected in 1995 in the United Kingdom from a sample of 45 experts employed primarily by Universities or Consultancies. On average they had each over 20 years personal experience representing a cumulative knowledge base of over 900 years. The OASIG drew their opinion from a sample of approximately 14,000 user organizations. 31 of these interviewees (69%) included consultancy work as a major component of their work and 27 (60%) include research; many did both. Their professional areas of expertise covered the domains of management, business, and social science. A small number of those interviewed had a background in engineering.

Key Findings

The IT project success rate quoted revolved around 20-30% based on the most optimistic interviews. Ultimately, 7 out of 10 IT projects “failed” in some respect.

---

Possibly related posts: (automatically generated)

Tags: Chaos Report, IT projects failure, KPMG Canada Survey, OASIG Survey