IT projects failing to deliver

Professional services firm KPMG's global IT project management survey reveals that nearly half of respondents experienced at least one project failure in the past year.

That's an improvement from last year when 57 percent reported one or more failed projects in the preceding year.

However the current survey has 86 percent of respondents reporting losses of up to 25 percent of targeted benefits from their project portfolio.

More than 600 organizations in 22 countries participated in the survey.

"The survey shows that many IT projects fail to deliver expected value back to the business," says Graeme Sinclair, national partner in charge at KPMG audit and risk advisory service.

Of survey respondents, 81 percent reported an increase in the number of new projects and 79 percent said that project budgets have risen. The new projects were driven by new products and services or business process improvements (74 percent), technology updates (48 percent) and compliance and regulatory changes (24 percent).

But, in spite of the increased project activity the survey reveals that while IT projects are delivering some value back to organizations benefits fail to be delivered back, and no one is being held accountable for those losses.

"Businesses are under pressure to keep costs down and deliver today. Management tends to concentrate on today's results and lets tomorrow's results slide," says Sinclair.

"Another problem that the survey reveals there is often a governance effort in the beginning of projects but when the project is up and running it is left without governance. Projects are not being followed through."

Sinclair is surprised that 59 percent of organizations have no management process to measure benefits. Only 13 percent globally, and one single organization in New Zealand, reported tracking benefits until they are realized and formally reported.

"The survey shows that organizations that get the greatest value back from IT projects have an integrated governance framework all the way through the project. The roles and responsibilities within the projects are clear, and there is a formal benefits [measuring] process."

Sinclair says that IT governance does not necessarily mean a big financial investment.

"It's more about using a different technique," he says. "It's about working smarter, not harder."

But 88 percent of survey respondents say that there has been an increase in the complexity of projects.

"This is a clear change from the last couple of years," says Sinclair. "IT projects are often a suite of projects where functions have to work together, or where one component can't move on until another is completed."