Only third of IT projects delivered on time, budget: survey

Extrapolating the latest results across the whole economy implies a “truly staggering waste of resources”

The headline-grabbing Novopay teachers’ payroll system is just the tip of the iceberg of troubled IT projects if a KPMG survey is to be believed.

A study of about 200 New Zealand organisations by the accounting firm has found only a third of projects with an average cost of more than $15 million were on time, on budget and delivered the desired results.

That’s a worse record than from a similar survey in 2010, says study author Perry Woolley, when about half of projects were successful. Extrapolating the latest results across the whole economy implies a “truly staggering waste of resources”.

“It should be a wake-up call to the New Zealand business sector.”

However, Woolley says, there appears to be a lack of concern at the high project failure rate. “It bothers me that more people are not disquieted by results like this,” says Woolley, whose background is in project management.

“Businesses tend to accept this state of affairs with a bit of a shrug.”

That’s the attitude he once encountered when discussing a failed project with executives of the organisation concerned.

“The CFO said words to the effect that it was an IT project, and you kind of expect them to go wrong.”

Yet the dozen IT organisations in the survey sample reported better than average results. However, Woolley says, respondents assessed their own performance so the results are not objective.

“The reality is we might get different results if we were looking clinically from the outside. But we think it is still valuable information, particularly in how it predicts trends over time.”

The latest survey found four times as many projects — 21 per organisation — were under way than in 2010. Presuming the same number of people were involved, the greater volume of work could account for the higher failure rate, Woolley says.

It may be small consolation but practitioners say failure is a better project management teacher than success. Woolley says from what has already come out publicly about Novopay, the project looks to have been dogged by political, stakeholder management, budgetary and personality issues, none of which textbooks are very useful at providing answers for.

Ray Delany, president of the Institute of IT Professionals and head of Auckland company Designertech, says there are no mysteries to project management.

“Almost all the projects I’ve seen or been involved in that have gone off the rails have primarily done so because they’ve failed to follow the established body of knowledge.

“I don’t think it’s too complicated. For the most part it’s just people following the basic rules.” The key is knowing how to react when complicated work goes wrong, as it inevitably does.

“The project management discipline is all about that — it’s not about bureaucratic box-ticking.” When things come unstuck, understanding why will help next time around.

“Generally, people learn more from projects that don’t go well than from those that do. “It’s a bit like venture capitalists. They like to back people who have already had a start-up not work — that’s generally seen as a positive thing.”

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