Project Failure Rates Still a Problem

project failure

I have been writing articles on Project Failure rates for the last 10 years and to be honest things have not changed much since those early articles. The levels of wastage on failed projects is as high as ever and must add up to sums in the billions across all economic sectors both private and public. The evidence for comes from some recent public sector reports:-

Tax Payers Alliance 2013 – 2014

That’s according to the Taxpayers’ Alliance, which has collated losses across all government departments for 2013 – 2014. The headline figures are as follows:-

  • Ministry of Justice was the biggest offender, losing £56m while rolling out a single, unified in-house ERP system
  • Department for Work and Pensions lost £27m on web-based benefits system “My Benefits Online (MyBOL)”
  • Department for Business, Innovation and Skills. The FLITE program to consolidate 5,200 BIS and Department of Energy and Climate Change users at two sites lost the tax payer £1.235m.
  • Department of Health in its electronic patient records project with Computer Sciences Corp (CSC) resulted in a £4.707m loss.
  • Department of Transport lost £2.223m after its Highways Agency was forced to pay compensation to one IT contractor for early termination of a project.
  • DVLA, meanwhile, had to make a £700,000 special payment to IBM in December 2013 to make “significant improvements” to an existing contract.
  • MoJ was the biggest offender, losing £1.727m on a software rollout cancelled “following a reappraisal of the economic benefits of the business case.”

This list of projects with public visibility total some £100 million pounds and must surely represent a very small proportion of the unmapped and tracked wastage on failed project right across the Economy bearing in mind private and public companies do not want IT project failures made public.

If we don’t have details of the true economic cost of project failures what other proxy research studies are there which might give use further insights into the scale of the problem and what might be the possible causes and potential solutions? After looking around I discovered the following familiar updated studies :-

  • According to a recent IBM study, only 40% of projects meet schedule, budget and quality goals.
  • Geneca, a software development company, noted from its studies that ‘fuzzy business objectives, out-of-sync stakeholders and excessive rework mean that 75% of project participants lack confidence that their projects will succeed.’
  • McKinsey recently found that ‘while an increasing number of non-IT executives give IT a score of 61% for basic services like email and laptop support, only 26% rank IT high in the most vital area of proactively engaging with business leaders on new ideas or systems enhancements.’
  • The Portland Business Journal similarly shows depressing statistics: “Most analyses conclude that between 65 and 80% of IT projects fail to meet their objectives, and also run significantly late or cost far more than planned.”
  • KPMG found ‘70% of organizations have suffered at least one project failure in the prior 12 months and 50% of respondents indicated that their project failed to consistently achieve what they set out to achieve.’

Looking through these studies these failure rates are mostly caused by the following deficiencies :-

  • Low project management maturity across most public and private sector organisations.
  • Poorly trained and qualified Project /Programme managers
  • Lack of a proper Project /Programme Management recruited and induction strategy.
  • Political Correctness and Spin hindering the proper implementation of Project /Programme Risk and Issue Management.
  • Lack of stakeholder training in project programme methodologies
  • Lack of stability concerning what is Project /Programme management best practice
  • Lack of Project Management Offices with authority to police, audit and enforce project management Best Practices.

In my view none of the above causes behind high project failure rates are new when I compare theae to articles written 10 years ago. The thing is why nothing has been done to fix these deficiencies. I will discuss this point in more detail in future blog articles.

14/03/2016

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