• Have your projects taking longer than scheduled?
• Have your projects been completed much quicker than scheduled with out a lot of pressure on the project team?
• Have your projects had to redefine their scope or specifications because they could not meet the original scope or specifications?
• Are your customers usually delighted with your project results?
• How often does the above happen?

Projects fail at an alarming rate.  Quantitative evaluations show that as many as 30% of projects are cancelled before completion, wasting all the time , money and effort spent on them.  Surviving projects usually fail to deliver the full initial project scope or deliver late or overrun the project budget. 

These project failure rates vary from industry to industry. What is the impact of this failure rate?  
 

In the United States, companies spend more than $250 billion each year on IT application development of approximately 175,000 projects. The average cost of a development project for a large company is $2,322,000; for a medium company, it is $1,331,000; and for a small company, it is $434,000. A great many of these projects will fail. Software development projects are in chaos, and we can no longer imitate the three monkeys -- hear no failures, see no failures, speak no failures.

The Standish Group research shows a staggering

 31.1% of projects will be cancelled before they ever get completed. Further results indicate 52.7% of projects will cost 189% of their original estimates. The cost of these failures and overruns are just the tip of the proverbial iceberg. The lost opportunity costs are not measurable, but could easily be in the trillions of dollars. One just has to look to the City of Denver to realize the extent of this problem. The failure to produce reliable software to handle baggage at the new Denver airport is costing the city $1.1 million per day.

On the success side, the average is only 16.2% for software projects that are completed on-time and on-budget. In the larger companies, the news is even worse: only 9% of their projects come in on-time and on-budget. And, even when these projects are completed, many are no more than a mere shadow of their original specification requirements. Projects completed by the largest American companies have only approximately 42% of the originally-proposed features and functions. Smaller companies do much better. A total of 78.4% of their software projects will get deployed with at least 74.2% of their original features and functions.

Based on this research,  think about the billions spent on cancelled software projects.

This data may seem disheartening, and in fact, 48% of the IT executives in this research sample feel that there are more failures currently than just five years ago.

Despite the gloom-and-doom reports, many companies prosper in the business of running projects. What do these companies do that the losers are not doing? Much of the project literature would lead you to believe that they are the precious few who follow the PMBOK and that all you have to do to join them is do more of what you are doing and do it faster.

Successful project management companies have put in place systems that allow them to win in their environment. That environment generally includes competitors using a similar system. A competitive system does not require you to be great or even good. It does not require that your theories be right. You just have to be better than your competitors.

However, the first one to put in place a dramatically improved system has the opportunity to steal the market if competitors cannot easily -- or at least rapidly -- match the improvement.