Statistics over IT Failure Rate
1 van 5
http://www.it-cortex.com/Stat_Failure_Rate.htm
[ Failure Rate ] [ Failure Causes ] [ Project Specificities ] [ Success Assessment ]
[ Failure Examples ]
Failure Rate
Statistics over IT projects failure
rate.
To err is human but to really
foul things up requires a
computer.
Anonymous
Before embarking on a "strategic" project, every
organization should be aware of its "a priori"
chances of success. Statistics over IT project failure
rate provide a good measure of those chances. They
are not shown to demoralize executives and to deter
them from undertaking large projects. The purpose
is to make them ponder on how to approach this
endeavor so as to maximize their chances of
success.
While looking at those data keep asking yourself :
"what do I have more than the executives whose
projects now stand on the casualty list ?"
The following surveys provide statistical data over
the rate of failure of IT projects.
The Robbins-Gioia Survey (2001)
The Conference Board Survey (2001)
The KPMG Canada Survey (1997)
The Chaos Report (1995)
The OASIG Survey (1995)
The Robbins-Gioia Survey (2001)
Robbins-Gioia, LLC, a provider of management consulting services
located in Alexandria - Virginia, made a study over the perception by
enterprises of their implementation of an E.R.P. (Enterprise Resource
Planning) package.
Survey Scope
232 survey respondents spanning multiple industries including
government, Information Technology, communications, financial,
utilities, and healthcare.
A total of 36 % of the companies surveyed had, or were in the process
24/02/2007 15:02
Statistics over IT Failure Rate
2 van 5
http://www.it-cortex.com/Stat_Failure_Rate.htm
of, implementing an ERP system.
Key Findings
51 % viewed their ERP implementation as unsuccessful
46 % of the participants noted that while their organization had
an ERP system in place, or was implementing a system, they did
not feel their organization understood how to use the system to
improve the way they conduct business.
56 % of survey respondents noted their organization has a
program management office (PMO) in place, and of these
respondents, only 36 % felt their ERP implementation was
unsuccessful
Comments on the Robins-Gioia Survey
Project failure is not defined by objective criteria but by the perception
of the respondents. The advantage of a perception is that it naturally
integrates multiple aspects. Its obvious disadvantage is that it is
inevitably partial: if the respondent has taken an active role in the
project it will inevitably embellish the reality, whereas if the project has
been "forced down his throat" he might cast a grimmer look at the
project outcome.
Back to top
The Conference Board Survey (2001)
Survey Scope
That survey interviewed executives at 117 companies that attempted
ERP implementations
Key Findings
34 % were very “satisfied.”
58 % were “somewhat satisfied,”
8 % were unhappy with what they got.
40 % of the projects failed to achieve their business case within
one year of going live
The companies that did achieve benefits said that achievement
took six months longer than expected.
Implementation costs were found to average 25 % over budget,
Supports costs were underestimated for the year following
implementation by an average of 20 %.
Back to top
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
24/02/2007 15:02
Statistics over IT Failure Rate
3 van 5
http://www.it-cortex.com/Stat_Failure_Rate.htm
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 projects that were analyzed were deemed to have
failed by the respondents. More than three quarters blew 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
clearly indicate that unbudgeted IT project expenditures must run into
the billions of dollars.
Back to top
The Chaos Report (1995)
The Chaos Report is the first survey made by the Standish Group. This
report is the landmark study of IT project failure. It is cited by
everybody writing a paper or making a presentation were a reference is
made of IT project failure.
Scope of the Study
The respondents to the Standish Group survey were IT executive
managers. The sample includes large, medium, and small companies
across major industry segments : banking, securities, manufacturing,
retail, wholesale, heath care, insurance, services, and 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 qualitative
context for the survey results.
Key Findings
The Standish Group research shows a staggering 31.1% of projects will
be canceled before they ever get completed. Further results indicate
52.7% of projects will cost over 189% of their original estimates. The
cost of these failures and overruns are just the tip of the proverbial
iceberg. The lost opportunity costs are not measurable, but could easily
be in the trillions of dollars in the United States alone.
Based on this research, The Standish Group estimates that in 1995
American companies and government agencies will spend $81 billion
for canceled software projects. These same organizations will pay an
additional $59 billion for software projects that will be completed, but
will exceed their original time estimates. The Standish Group estimates
that almost 80,000 projects were cancelled in 1995. Risk is always a
factor when pushing the technology envelope, but many of these
projects were as mundane as a drivers license database, a new
accounting package, or an order entry system.
On the success side, the average is only 16.2% for software projects
that are completed on-time and on-budget. In the larger companies,
the news is even worse: only 9% of their projects come in on-time and
on-budget. And, even when these projects are completed, many are no
more than a mere shadow of their original specification requirements.
Projects completed by the largest American companies have only
24/02/2007 15:02
Statistics over IT Failure Rate
4 van 5
http://www.it-cortex.com/Stat_Failure_Rate.htm
approximately 42% of the originally-proposed features and functions.
Smaller companies do much better. A total of 78.4% of their software
projects will get deployed with at least 74.2% of their original features
and functions.
This data may seem disheartening, and in fact it is, 48% of the IT
executives in our research sample feel that there are more failures
currently than just five years ago.
Back to top
The OASIG Study (1995)
This study has been 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 have each over 20 years personal
experience representing a cumulative knowledge base of over 900
years. Their drew their opinion from a sample of approximately 14,000
user organizations. 31 of these interviewees (69%) include consultancy
work as a major component of their work, and 27 (60%) include
research; many do both. Their professional areas of expertise cover the
domains of management, business, and social science. A small number
of those interviewed have a background in engineering.
Data were collected by interviewing researchers and consultants using
a semi-structured interview schedule. Some preparation was required
by them. Each interview lasted, on average, around 1.5 to 2 hours,
though some lasted considerably longer.
Key Findings
The IT project success rate quoted revolves around 20-30% based on
its most optimistic interviews. Bottom line, at best, 7 out of 10 IT
projects “fail” in some respect.
Back to top
IT Cortex Conclusion
The statistics presented here all converge to establish that:
an IT project is more likely to be unsuccessful than successful
about 1 out of 5 IT projects is likely to bring full satisfaction
the larger the project the more likely the failure
This raises of course a litany of questions:
would an organization be better off without undertaking IT
projects ?
24/02/2007 15:02
Statistics over IT Failure Rate
5 van 5
http://www.it-cortex.com/Stat_Failure_Rate.htm
does the attention shown by top management for strategic
projects reflect the actual stakes ?
what will increase the chances of success ?
what edge does my project have with respect to those on the
casualty list ?
In essence managing a project consists in performing an optimization
under constraints. A project aims delivering maximum functionality
within a given budget and within a given timeframe. The IT Cortex
approach aims at maximizing the overall Pareto efficiency of that
project within its organizational environment and of the whole
organization within its market environment.
Should you wish to get more information, do not hesitate to contact us.
Alternatively, if you have access to additional statistical data over IT
project failure that you would like to share with us, we would be
delighted to hear from you.
Back to top
Ó IT Cortex
[ Failure Rate ] [ Failure Causes ] [ Project Specificities ] [ Success Assessment ]
[ Failure Examples ]
24/02/2007 15:02