Running head: IT PROJECT DELIVERY IT Project Delivery IT Project Delivery Table of Contents Executive Summary Introduction The CHAOS Report Made By Standish Group In 1995 The CHAOS Report And IT Project Delivery Factors Today Processes And Practices IT Development Organizations Should Be Putting Into Place To Promote Successful IT Project Delivery References IT Project Delivery Executive Summary The present study strives to introduce some objectivity on assessment of objective causes of IT project failure through numerous situations considered. The unfortunate reality of the present IT industry is that the vast majority of IT development projects are either abandoned or fail to deliver a useful working system. As this occurs, it becomes very important to understand the real causes why some IT projects succeed, and others fail. One of such reports, the CHAOS report, the first survey conducted by Standish Group in 1995 became the landmark study of overall IT project failure and is cited almost everywhere where a reference is made of IT project failure rates. However, with the lapse of time it becomes extremely important to find out where there are some changes occurred in the IT industry. The present paper examines the reality of the present IT industry, reviews the current research literature and provides opinion on the state of IT project delivery today.
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The present study summarizes the differences and similarities in IT project delivery factors today compared to the data obtained by Standish Group in the CHAOS report in 1995, and examines the changes, which took place. Finally, the paper determines what processes and practices IT development organizations should be putting into place to promote successful IT project delivery. IT Project Delivery Introduction The vast majority of consultants, stakeholders, and project managers have their own opinion concerning the ultimate reasons for IT project failures. Their conclusions are mostly stipulated by their area of expertise. Numerous surveys also make an effort to introduce some objectivity on assessment of objective causes of IT project failure through numerous situations considered. The unfortunate reality of the present IT industry is that the vast majority of IT development projects are either abandoned or fail to deliver a useful working system. As this occurs, it becomes very important to understand the real causes why some IT projects succeed, and others fail. One of such reports, the CHAOS report, the first survey conducted by Standish Group in 1995 became the landmark study of overall IT project failure and is cited almost everywhere where a reference is made of IT project failure rates.
However, with the lapse of time it becomes extremely important to find out where there are some changes occurred in the IT industry. The present paper examines the reality of the present IT industry, reviews the current research literature and provides opinion on the state of IT project delivery today. The present study summarizes the differences and similarities in IT project delivery factors today compared to the data obtained by Standish Group in the CHAOS report in 1995, and examines the changes, which took place. Finally, the paper determines what processes and practices IT development organizations should be putting into place to promote successful IT project delivery. The CHAOS report made by Standish Group in 1995 Nowadays the U.S. spends over $275 billion each year on about 200,000 application software development projects (The Standish Group International, 1999).
However, despite such significant quantity of IT projects, many of them are likely to fail not due to insufficient funding or lack of technology, but because of the lack of skilled project management. Although it is quite difficult to determine the exact opportunities for IT project failure, it is still possible to outline the most important factors affecting the likelihood of IT project delivery. One of such studies aimed to examine the causes of IT project failures was the CHAOS report conducted by Standish Group in 1995. The main aim of this report was to identify the scope of IT software project failures, the major factors causing software projects to fail, and the key ingredients that can reduce project failures (The CHAOS report, 1995).
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According to this report, there was shown that a staggering 31.1 per cent of IT projects are cancelled before they ever get completed. Over 52.7 per cent of all IT projects cost 189 per cent of their original estimates (The CHAOS report, 1995).
Based on their research, The Standish Group made an assumption that in 1995 the U.S.
companies and government agencies spent approximately $81 billion for cancelled software projects. The same companies paid an additional $59 billion for IT projects that will be completed but will exceed their preliminary estimates (The CHAOS report, 1995).
Only 16.2 per cent of software projects were completed on-budget and on-time. However, the larger companies reported worse results, as only 9 per cent of IT projects were completed on-time and on-budget (The CHAOS report, 1995).
In fact, The Standish Group assumed that approximately 48 per cent of the IT executives were sure that there were more IT project failures at the moment when the study was done, than five years ago. This study was conducted among 365 IT managers from various companies, ranging in size and economic factors. The project evaluation criteria taken into consideration included cost overruns, time overruns, and content deficiencies.
The key findings of the CHAOS report were that incomplete requirements and lack of user involvement were the top factors for the causes by IT projects were impaired or ultimately cancelled. Incomplete requirements made up 13.1 per cent of the selected responses, lack of user involvement – 12.4 per cent, lack of resources – 10.6 per cent, unrealistic expectations – 9.9 per cent, lack of executive support – 9.3 per cent, changing requirements and specifications – 8.7 per cent, lack of planning – 8.1 per cent. 7.5 per cent of IT projects were cancelled, as they were needed no longer, 6.2 per cent of IT projects were cancelled due to lack of IT management, and 4.3 per cent were cancelled due to technology illiteracy (The CHAOS report, 1995).
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The CHAOS report and IT project delivery factors today The CHAOS report was, obviously, one of the most comprehensive and in-depth studies. This study was hardly enough to outline a sound solution to IT project failures, but, nevertheless, it was quite useful to define the major factors of IT project failures. It can also be used as a useful tool to forecast the potential success of the IT project or to evaluate the potential IT project failure (Veitch, Study shows persistent project problems, 2007).
The trends for IT project delivery and failure have much in common with the major causes of IT project failures described in the CHAOS report. According to the recent research, approximately fifty per cent of the UKs largest companies report IT project failures over the past three years (High failure rate hits IT projects, 2007; Over half of IT projects fall short of expectation, 2007) Another report shows that over 70 per cent of IT project fail (Lewis, 2007).
Moreover, poor system specifications in the design and preparation stages of IT projects are responsible for the failure of two-thirds of initiatives. (Kelly L. , 2007) The researchers from Avanade interviewed IT and operations managers from 102 companies, each supporting more than 10,000 users. As it is claimed by the consultant Avanade, over 40 per cent of businesses had project failures between 2004 and 2006.
However, in contrast to the CHAOS report that claimed that the major causes of IT project failures were incomplete requirements, the largest cause of all problems was poor system specification that accounted for 66 per cent of all IT project failures. The lack of understanding between business departments and IT was contributing to 51 per cent of IT failures; while 49 per cent of failures in UK companies occurred due to technology selection (Kelly, 2007).
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28 per cent of IT companies claimed that they measured the success of the project after its implementation. Avanade director of enterprise service solutions Brent Kronenberg considered that this lack of analysis deprives the businesses of cost-saving feedback (Kelly, 2007).
Although the companies acknowledge the importance of the value of IT, they still fail to obtain the benefits that their investment in IT projects promised. Yet, it is likely to suppose that cost-implementation assessments might enable the companies to obtain the most efficient level of performance, being conductive to the real return of the investments made in IT systems.
There is another report aimed to define the causes of the IT project failures today. According to the Coley Consulting group, IT projects are likely to fail when they do not meet the following criteria: on-time delivery, performance of system works as required and on-budget delivery of the IT project. The key findings of the Coley Consulting group are similar to the CHAOS report. According to them, the key factors for IT projects delivery failure are lack of user involvement, long or unrealistic time scales, poor or no requirements, no change control system (Consulting, 2007).
However, the Coley Consulting places an emphasis on scope creep and poor or lack of testing. The Coley Consulting claims that IT projects should be treated as business projects in order to be successful. According to them, lack of user involvement remains the key factor for IT project failures. With no user involvement nobody in the business feels committed to a system, and can even be hostile to it.
(Consulting, 2007) In such a way, there is a need to consistently support the IT project and to make it clear to the employees it is a priority. Long or unrealistic time scales for the IT project is also conductive to the project failure. Therefore, the consultants encourage the companies to make the project time scales as short as possible, possibly splitting the larger systems into separate projects. They also recommend to review all project plans in order to assure they are realistic, and to challenge the participants to express any reservations they may have with it. (Consulting, 2007) It should be also taken into consideration that many current IT project still have vague, high level and unhelpful complex requirements (Group, 2007).
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Similar to the CHAOS report, these poor requirements are still considered the key factor for IT project failures. Therefore, the users should be able to precisely specify the requirements, in order to make the project succeed. The next important aspect is scope creep.
Scope creep is the “insidious growth in the scale of a system during the life of a project. (Consulting, 2007) Although this is an issue related to the management, it is still need to be realistic about what and when the company needs, in order not to make the project fail. Uncontrolled changes also negatively affect the IT system under development and are likely to cause the project fail. Again, this places an emphasis on the advantage of shorter time scales and phased approach to the IT project to assure the changes have less chance to influence the development. The researchers also claim that, unlike the CHAOS report, IT project failures today are caused by poor testing. Although the IT developers spend time on system testing during the software development, the users should be encouraged to run acceptance tests to assure the IT project meets their business requirements. According to The Coley Consulting group, acceptance testing is often unable to find out faults before the IT system goes live due to poor requirements that cannot be tested, non planned or poorly planned tests that mean that the IT system is not methodically checked, insufficiently trained users, who have no knowledge about the purpose of the testing, and inadequate time to complete the tests as the IT project is late (Consulting, 2007).
Processes and practices IT development organizations should be putting into place to promote successful IT project delivery Taking into consideration the obtained data, it is possible to make the conclusion as follows. Overall, the smaller time frames for IT projects delivery with the delivery of software components often and early are likely to increase the IT project success rate. Shorter time frames for IT projects are conductive to the iterative process of prototype, design, develop, test, and deploy smaller software elements (Jaques, 2007).
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This process is juxtaposed to the older concept of developing software, and seems to be more successful, as it engages the user earlier. The growing software process is designed so to provide the realistic expectations concerning the aim of the project and the time of delivery. This process also implies each software component to have its small set or owners, thus making the control stage easier, and making the overall process less complex.
In addition, when the growing software process is implemented, each software component is more likely to have a clearer and more precise statement and the set of objectives. As the IT projects are made simpler, the cost required for their implementation also reduces. Finally, simpler IT projects cause less confusion, and have more chances for successful delivery. References Consulting, C. (2007, March 24).
Why Projects Fail.
Retrieved April 1, 2008, from http://www.coleyconsulting.co.uk/failure.htm Group, I. C. (2007).
Failure Causes. Retrieved April 1, 2008, from http://www.it-cortex.com/Stat_Failure_Cause.htm Jaques, R. (2007, March 28).
Half of virtualisation projects end in failure. Retrieved April 1, 2008, from http://www.computing.co.uk/vnunet/news/2186619/alm ost-half-virtualisation Kelly, L. (2007, June 21).
Poor planning sinks IT projects. Retrieved April 1, 2008, from http://www.computing.co.uk/computing/news/2192473/ poor-planning-sinks-projects Kelly, N. (2007, August 20).
High failure rate hits IT projects. Retrieved April 1, 2008, from http://www.computing.co.uk/computing/news/2197021/ failed-projects-hit-half-uk Lewis, B.
The 70-percent failure. Retrieved April 1, 2008, from http://www.infoworld.com/articles/op/xml/01/10/29/ 011029opsurvival.html (1995).
The CHAOS report. Standish Group. The Standish Group International, I. (1999).
CHAOS – A Recipe For Success. Retrieved April 1, 2008, from http://www4.informatik.tu-muenchen.de/lehre/vorles ungen/vse/WS2004/1999_Standish_Chaos.pdf Veitch, M. (2007, July 2).
Over half of IT projects fall short of expectation. Retrieved April 1, 2008, from IT Week: http://www.computing.co.uk/itweek/news/2193225/hal f-projects-fall-short Veitch, M. (2007, June 28).
Study shows persistent project problems.
Retrieved April 1, 2008, from IT Week: http://www.computing.co.uk/itweek/news/2193083/stu dy-shows-persistent-project.