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Tom Welch PMP
Mesa, Az, USA
Jim:
I have seen those stats too, and believe a proactive project manager should emulate success, not failure. Forget these often published stats. That?s history! BTW, I don?t consider a project cancellation a failure, since most projects are terminated due to changing business needs and/or budget constraints...at least in most IS environments
Jim Stewart
Burlington, Ma, USA
>I have seen those stats too, and believe a >proactive project manager should emulate >success,not failure.
Right, but that's not the point. The point is that when a company asks why they should consider using project management methodology, this is one way of making a convincing argument. >Forget these often published stats. That?s >history! BTW, I don?t consider a project >cancellation >a failure, since most >projects are terminated due to changing >business needs and/or budget >>>>>>constraints...at least in most IS >environments Actually, according to Gartner, that's only part of the story. I'll quote more from the report: > Only 25 percent of telecom IT projects succeed, a rate that is worse than IT projects across all industries, where 28 percent succeed, according to Jim Johnson, chairman of the Standish Group. The other 75 percent in telecom are either late, over budget, cancelled or outright failures. The Gartner Group is equally pessimistic. According to a 1999 study, ?through 2002, 75 percent of e-business projects will fail to meet the business objectives, due to fundamental flaws in project planning.? The impact of this weakness is staggering. Johnson notes that project failures account for nearly $100 billion in wasted capital every year. With 11 percent of all IT projects in the United States coming from the telecommunications sector, this means a waste of as much as $8 billion. Worse yet, these cold statistics tell us little or nothing of the collateral effects of diminished end user productivity from missing, underused or unused system functionality, the opportunity cost of having skilled human resources attached to failed ventures and lost time in the marketplace. To put it in perspective, if this yearly resource drain were instead stated as one company?s revenue, it would rank in the upper half of the Fortune 500?approximately number 235, roughly the same size as cable giant Comcast. Where Did We Go Wrong? Cancelled, unused or underused functionality makes up as much as 29 percent of all projects, Johnson says. ?A lot of times the company just gives up, or the business has changed so much, there?s no point in going forward,? he says. The remainder of the less-than-successes?46 percent of all projects?belong to the category he calls ?challenged,? meaning late to market or suffering a cost overrun. These projects may get the goods to the market, but not in a way that was anticipated. Ironically, it isn?t the technology that IT projects trip over, according to Michael O?Malley, principal in the information risk management practice at consulting firm KPMG. According to its survey of 256 companies, only 14 percent of all failures can be chalked up to a company?s inability to cope with technology. The other 86 percent owe to some common management woes: improperly defined objectives (17 percent), unfamiliar scope (17 percent), lack of effective communication (20 percent) and poor project management skills (32 percent). 
Capers Jones is a source of project success/failure statistics. His company, Software Productivity Research focuses on software estimation measurement and assessment. They help companies improve their chances for success, in essence. The SPR website has some of Capers articles on the subject -- www.spr.com.
Personally, the reason I decided to write about project failure is partly because if you don't understand history you are doomed to repeat it. But then some people agree with Henry Ford who said history is bunk. When it comes to projects we don't need to decide which quote to agree with because history keeps repeating itself -- projects are late, the wrong products get built and stuff costs far too much money, still, now today. Capers has been a pessimist for years but he also offers some excellent solutions, none of which are easy, but many that do actually work if they are applied. Enjoy!
Tom Welch PMP
Mesa, Az, USA
Jim and Frank: If you want to spend your precious time focused on the failures of others, that?s your prerogative. Again, emulate success, not failure! These often quoted stats are designed to do one thing, generate income for consulting firms promoting methodologies that may or not be appropriate for an organization?s culture, PM level of maturity and understanding, values, and budget. So Jim, you now see that the question of whether to implement a project management methodology is as much an ?organizational development? issue as a project management question. BTW, don?t believe everything you read, most of these consulting firms that publish these stats have hidden agendas and products/services to promote. If project failure rates were as dismal as often stated, American business would have come to a grinding halt years ago.
Hi Tom,
While American business has not come to a grinding halt, it is in very poor shape right now partly because of vast sums of wasted money. When the general business climate was good and there was lots of growth we could swallow more waste than we can now. To me this is good cause to look at the waste and see what can be done about it. I agree with the Gartner stat of 25% success rate. But that doesn't say that a failed project never produces any good. Many times, in fact most times lots of good is done and value created but the project team is still seen as a failure. I think teams in that situation need help -- and that's one of the things I try to do in my work. Yours Humbly, Frank
Tom Welch PMP
Mesa, Az, USA
Frank, I agree with everything you just said. To bring this discussion down to a personal level, I believe most folks spend entirely too much time trying mitigate their shortcomings (we all have them) rather than focus on leveraging their strengths, the same holds true for organizations, build on strength and move on. If I was in Jim?s shoes, I would present my case in terms of project failures (not stats), as well as information gathered from benchmarking similar size companies in my industry. This way you?ll get immediate buy in from executives if you do your research.
Michael Miller
Chula Vista, Ca, USA
I agree that the statistics mean nothing if not used correctly.
What you need to know isn't how many projects fail but the reasons why they fail. If you can understand why projects fail, then you can take steps to avoid those conditions.
michael williams
Catterick, United Kingdom
Hi All
A very interesting topic. What I'm looking for is some UK stats on why projects fail or indeed succeed. Are there any reports or documents that PM's or professionals use to help in this subject?? Thanks Mike |
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