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Study Reveals Troubled IT Projects Costing Billions Worldwide

August 5, 2008 By News Report

According to research conducted jointly by ESI International and the project benchmarking company Independent Project Analysis (IPA), troubled projects are costing taxpayers millions. The study reveals:

34 percent of all projects succeed. An average of 15 percent of all projects fail.
Projects that are considered "challenged" -- usually due to cost or schedule overruns -- account for 51 percent of all projects.
The lost dollar value for U.S. projects in 2002 alone is estimated at US$38 billion, with another US$17 billion in cost overruns, for a total project waste of US$55 billion against US$255 billion in project spending (The Standish Group 2003).
59 percent of organizations in the Asia-Pacific region had at least one project failure with an average cost of US$8.9 million.
Africa, Europe and the Americas followed suit with an average of 56 percent of the organizations reporting at least one project failure with an average cost of US$11.6 million (KPMG International 2003).

The study reveals that troubled projects are a worldwide affliction. From the U.S., UK, to the Asia-Pacific Rim, cost overruns coupled with failed timelines lead to sidetracked projects and, ultimately, wasted resources in the form of time, dollars and people.

In 2003 the United Kingdom's Office of Government Commerce (OGC) reported the cost of over-budget government IT projects had exceeded £1.5 billion or about US$3 billion over the last 6 years.

In mid 2007, the Economist Intelligence Unit reported the results of their survey of 145 senior global executives from different industries on their current and planned IT projects. Twenty percent of the executives stated over half of their IT projects started in the past two years were late or over budget. In addition, only 13 percent of the executives felt their IT projects had delivered the promised features and functions. Poor project management was attributed as the primary cause for IT project problems.

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Vivek Kundra, CTO of Washington, D.C., Focuses on Project Management

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