Gartner Survey Shows Why Projects Fail - Lars Mieritz

In the 2012 article, “Gartner Survey Shows Why Projects Fail” Analyst, Lars Mieritz, classified IT projects by size and revealed the reasons behind project failures.

The three classifications:

1.    Small

2.    Medium

3.    Large

The six causes behind IT application project failure:

1.    Functionality issues

2.    Substantially late

3.    Quality issues

4.    High cost variance

5.    Cancelled after launch

6.    Rejected or not implemented for other reasons

Small:

A small project was defined as one with a budget of less than $350,000. These sized projects are easier to maintain, oversee and execute. In order to achieve a lower failure rate, it is essential that projects remain small and do not exceed 6 months in duration. A fascinating pattern emerged when comparing the most recent survey results with previous data gathered. It indicated that small IT projects encounter a one-third lower failure rate than large projects- there was a 20% failure rate observed for small IT projects. (Figure 1) It is interesting that “poor quality” was ranked 3^rd highest as the reason for small IT project failure with 17% of respondents, whereas it was the 2^nd lowest in medium (12%) and large (11%) IT projects. (Figure 2)

Medium:

A medium project was defined as one with a budget of $350,000 to $1 million. Runaway budget costs are behind one-quarter of project failures for projects with budgets greater than $350,000. There was a 25% failure rate noted for medium sized IT projects which was slightly lower but similar to the failure rate of large IT projects which stands at 28%. (Figure 1) In both cases, nearly one-third higher than the failure rate observed for small IT projects. “Functionality issues” and “high cost variance” were both positioned in the top 3 causes for project failure in medium and large sized IT projects. (Figure 2)

Large:

A large project was defined as one with a budget that exceeded $1 million. The failure rate of large IT projects with budgets exceeding $1 million was found to be almost 50% higher than for projects with budgets below $350,000. It is intriguing that as the projects became greater in size, the failure rate increased accordingly. (Figure 1) Across all project sizes, it was evident that “substantially late” was the main reason for project failures, which is not a surprise considering the ongoing nature of projects. (Figure 2)

FIGURE 1

FIGURE 2