Over 50% of IT projects fail as a direct result of poor project
management practices ...
Project management is defined as the application of
knowledge, skills, tools and techniques to project activities to
meet project requirements. --
It sounds simple enough, but the
CHAOS Manifesto, an annual report from The
Standish Group that examines trends in software project success,
repeatedly reports worrying statistics for the IT project industry.
The 2011 edition of the CHAOS report found that 37% of all projects
succeeded in that they were delivered on time, within budget, with
all required features and functions. 42% of projects were
challenged in that they were delivered late, went over budget,
and/or were delivered with less than the requested features and
functions. The remaining 21% were considered a complete failure due
to cancellation prior to delivery or were never used post
The 2011 figures represent a slight improvement since the
release of the first CHAOS report in 1994, when project success was
reported to be just 16%; but the current statistics can still be
described as fairly dismal. In real terms, the cost of project
failure to the economy is staggering.
The IT Complexity Crisis: Danger and Opportunity
estimates that the financial burden of IT project failure in
the U.S. alone amounts to over $1 trillion. On a global scale, that
figure rises to an estimated yet equally astonishing $6.2
The Standish Group are not the only organization to report similar
findings. In August 2007,
Dynamic Markets surveyed 800 IT managers from eight
countries. They found that:
- 62% of projects overrun on time.
- 49% of projects overrun on budget.
- 47% of projects suffer from higher than expected
- 28% of organization have experienced projects that do not
- 25% of organizations have seen business users reluctant
to adopt new systems.
- 16% of organizations reported a negative effect of
projects on existing systems.
- 13% of organizations say projects have not delivered
Statistics vary between studies depending on the individual
aspects examined, but it is clear that the IT project industry is
in continued crisis and repeatedly suffers negative results as a
result of projects that off budget or schedule, don't deliver
requirements or don't deliver at all.
Spectacular Software Project Failure
There have been many instances of IT project failures
resulting in significant losses for the organizations involved.
Computer World examined major failures before coming up with a list
Top 10 Corporate Information Technology
Failures. Notable failures
- Greyhound Lines Inc. who spent nearly $6 million building a new
booking application only to see ridership fall by 12 % in a single
month after the new system failed to handle sale prices. The cost?
The company suffered a loss of over $60million
over a six month period.
- Norfolk Southern Corp. lost over $113 million worth of
business, incurring $80 million extra costs in the process, as a
result of a failure of test customs logistic software properly
during a merger with fellow rail company Conrail.
- W.W. Grainger Inc. spent an estimated $9 million on new
SAP-based software and services. The ERP system routinely crashed
and over counted inventory in the warehouses resulting in $19
million in lost sales and $23 million in anticipated profits.
The Reasons Why Software Projects Fail?
Global computing firm IBM investigated reasons for IT project
failure and identified
five key areas that influences whether a project is successful
or deemed a failure:
- Project Management (54%)
- Business (21%)
- People (14%)
- Method (8%)
- Technical (3%)
While the success of IT projects can very rarely be
attributed to a single individual, there is something to be said
when one of the biggest computing firms in the world attributes
over 50% of IT project failures as a direct result of poor project
management practices. There are several tried and tested
disciplines in the field of project management so it's difficult to
understand why there should still be so many project challenges
directly attributed to the process of managing a
What Makes a Great IT Project Manager Great?
IT projects are proven to be fraught with the risk of
failure. In an attempt to avoid potential pitfalls associated with
this project type, it is necessary to understand what makes an IT
project manager great. While possessing these qualities do not
necessarily guarantee that a project will be delivered as expected,
a project manager without the right skill set will be at a
Effective Project Planning and Direction
Comprehensive project planning and clear direction are key
factors for successful IT projects. This requires that the project
manager uses an approved methodology incorporating processes, rules
and project planning tools such as a project plan and ACRI log.
They should be supported by a recognized software tool. An
effective project manager will devote significant time to assign
suitable resources, defining goals and responsibilities clearly.
They will demonstrate a willingness to adapt and adjust assigned
roles as the project progresses. Business Technology Leadership
firm, CIO, backs up the importance of proper planning and
direction, reporting that
poor system specification in the design and
planning phase leads to 66% of IT project
Excellent Communication Skills
An excellent project manager will stay in contact with
both stakeholders and external vendors to avoid crippling their IT
projects as a result of communication breakdowns. They will
understand that the little details matter -- details such as
agendas, minutes and actions. They will also be well versed in
every stakeholder need and possess a solid grasp of the project in
order to present and clearly articulate pertinent information.
Project Times ranks
the ability of a project manager to communicate
effectively as one of the top three leadership
The successful IT project manager will be proactive in the
change management of project objectives and goals. They will know
the risks involved in such changes and effectively coordinate
between the IT departments and the accounting office, while at the
same time continuing to analyze and report on identified
performance benchmarks. Any change management process should be
straightforward and provide an effective method of estimation and
approval. The impact of changing requirements can be a huge factor
in IT project failure. An effective manager will understand the
difference between the end of change management and the onset of
Alignment with Stakeholders
The failure of a project manager to
align with stakeholders through trust and
understanding will almost certainly result in project failure.
Successful managers will understand this risk and make every effort
to achieve greater alignment through regular client touch points
such as including a project kickoff meeting, followed by regular
updates and sign-offs on work completed.
Executive Management Involvement
A great project manager will also clearly understand that
the involvement of the executive stakeholder is crucial and will
take the necessary steps to secure their participation in key
project meetings. It is not enough that the executive stakeholder
attends the kickoff meeting. It is vital for them to be involved in
status meetings to monitor progress and take part in critical
decision-making along the way.
The qualities of an effective project manager do not end
with the ability to plan and run projects. They will also possess
the appropriate soft skills to ensure that the team members are
sufficiently skilled and motivated to complete individual
responsibilities. Business Insider states that
most projects fail because the employees working on them just
don't care. This may not be the only problem
though; the simple truth is many IT projects place pressure on job
security due to the perception that headcount is kept to a minimum.
A successful project manager gets 'buy-in' from all crucial team
players to keep the project running smoothly.
Project Management Methodology
The most successful IT projects are often delivered as a
result of the effective project management methodology or a
framework that incorporates proven tools. An experienced project
manager will understand that a systematic approach will increase
accuracy and attain time savings through the automation of routine
Project Management Trends for 2012
ESI International, a leading think tank in PMO
perspectives, releases an annual report examining trends in project
management. Tellingly, the
top ten project management trends for 2012
include anticipation that good project managers will buck the
current trends in unemployment. Despite the fact that record levels
of unemployment are being faced in the majority of countries as the
global financial crisis deepens, ESI acknowledges that 'good
project managers are hard to find.' ESI estimates that the hunger
for the perfect project manager will surge in 2012.
The Most Effective Project Manager will Achieve Success
Dennis Anderson PhD, writing for Microsoft Tech Corner,
acknowledges that IT projects can often represent the next
generation of an organization's products and services. The
statistics prove that many, if not the majority, of IT projects
will come in past the deadline, be over budget or fail to deliver
the expected requirements. All of these factors have a detrimental
effect on ROI. Anderson points out that one of the main things that
can lessen the loss is acquiring
the right project manager. Organizations need
someone who can not only deliver the project with demonstrable ROI,
but also someone who understands the importance of reality and the
Ultimately, the buck stops with the project manager. It is
in the best interests of any organization that they find the right
person for the job -- one who can overcome all the odds to deliver
even the most challenging of IT projects.