Decrease in Project Success Rates

The Standish Group, the US based IT project management research and consulting firm, released their 2009 CHAOS Report recently. This report tracks project failure rates across a broad range of companies and industries.

An extract “This year’s results show a marked decrease in project success rates, with 32% of all projects succeeding which are delivered on time, on budget, with required features and functions” says Jim Johnson, chairman of The Standish Group, “44% were challenged which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used.”

“These numbers represent a downtick in the success rates from the previous study, as well as a significant increase in the number of failures”, says Jim Crear, Standish Group CIO, “They are low point in the last five study periods. This year’s results represent the highest failure rate in over a decade”.

Standish attributes the increase in IT project failures to the recession and subsequent budget cuts. “A lot of the project cancellations are because of the economy,” says Johnson. “People are more prepared to cancel projects than they have been in the past. When they see a project that’s not going well, they have more political clout to cancel it and move on.”

We have to be prudent over the Standish figures as the research firm can’t always distinguish whether a project was axed because of the economy or because it wasn’t running smoothly!

Talking to fellow PPM practitioners across industries there appears to be many a  project or programme cancelled because funding has dried up or been withdrawn!

One response to “Decrease in Project Success Rates

  1. One possibility comes to mind and that is that perhaps more projects are cancelled because we have become more sensitive to making sure are project dollars will result in value to the business. I would be interested in seeing stats on reason for project cancellations such as ‘the project should have never started’, ‘change in business climate’, ‘change in leadership and priorities’, or simply ‘badly managed project’. Also at what stage becomes an important factor. I always see the project I had that got cancelled during planning to be a success. With good planning we were able to identify that the cost and time of the project were not the best use of the organization dollars at that time.

    I should look at the full report itself, but the high level statistics don’t really tell me much.

    Thank you for sharing!


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