Why so Many IT Projects are Challenged, Under Deliver Promised Value, or Outright Fail

Why so Many IT Projects are Challenged, Under Deliver Promised Value, or Outright Fail

For at least the last three decades, members of the C-Suite have been complaining about the frequency with which IT projects are challenged, under deliver promised value, or outright fail, and with good reason. The most recent Standish Chaos report shows that only 32% of projects are successful, 44% of projects are challenged, and 24% fail. The Standish Group defines project success as a project that delivers planned functionality on time, on budget, and includes all planned features. For Waterfall projects, the percentage of challenged projects is actually higher than it was 15 years ago. These low success rates are surprising given the focus over the last 15 years on project management and the push for project management certification.

Agile has helped significantly with project success rates as seen in the table below.  According to the 2011 CHAOS report, Agile projects are successful three times more frequently than waterfall projects.The report goes so far as to say, “The Agile process is the universal remedy for software development project failure. Software applications developed through the Agile process have three times the success rate of the traditional Waterfall method, and a much lower percentage of time and cost overruns.”

Agile Waterfall

Even though the Standish research shows that the chances of success are much greater with Agile than when using Waterfall, there is still a high chance (58%) that a project will be challenged, failed, or cancelled. Many projects that would have been considered successful using the Standish definitions may have another problem in that they deliver little or no business value. Let’s look at some recent industry quotes on this topic.

  • 78% of Information Systems projects failed to realize even 50% of the originally identified benefits.” Source: Management Today
  • “Only 40% of CFOs find that their IT investments are producing the returns they expected.” Source: Gartner, How to Optimize IT Investment Decisions
  • “30-40% of systems to support business change deliver no benefit whatsoever.” Source: OGC, Successful Delivery Toolkit

Let’s examine why projects are challenged and deliver little business value. According to the Standish Group, the top 3 reasons for challenged projects are:

  1. Lack of user input
  2. Incomplete requirements and specifications
  3. Changing requirements and specifications

According to the ROI Institute, the top 5 reasons why projects fail to deliver promised ROI are:

  1. Lack of business alignment
  2. Poorly defined requirements
  3. Stakeholders are not engaged
  4. Lack of focus on business results
  5. Failure to mange organizational change

All of the factors above are the result of poor business analysis.  This is evidenced by a report titled the Business Analysis Benchmark Report prepared by IAG Consulting.

  • Companies with poor business analysis capability will have three times as many project failures as successes.
  • 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis. In fact, 50% of this group’s projects were “runaways” which had any 2 of the following:
    • Taking over 180% of target time to deliver.
    • Consuming in excess of 160% of estimated budget.
  • Delivering less than 70% of the target required functionality.Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects.
  • Over 41% of the IT development budget for software, staff, and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.
  • The vast majority of projects surveyed did not utilize sufficient business analysis skills to consistently bring projects in on time and budget. The level of competency required is higher than that employed on projects for 70% of the companies surveyed.

The maturity level for business analysis is low in most organizations as the profession of business analysis is relatively new. The International Institute of Business Analysis was started in 2004, and currently has approximately 25,000 members.  However, there are currently less than 2,500 professionals certified in Business Analysis.

There are many requirement tools on the market, but only one true business analysis tool (Enfocus Requirement SuiteTM from Enfocus Solutions Inc.) that supports all of the knowledge areas and tasks defined in the Business Analysis Body of Knowledge.

Improving the maturity level of business analysis professionals can yield significant benefits for an organization. To do this requires developing individual business analysis competencies and organizational capabilities for several areas, which are shown by capability maturity level.

  • Level 1 – Awareness that Business Analysis is Needed
  • Level 2 – Business Requirements Definition and Management
    • Business Analysis Planning and Management
    • Stakeholder Engagement and Communications
    • Solution Analysis
    • Solution Scope Definition
    • Stakeholder Analysis
    • Elicitation
    • Requirements Development
    • Requirements Management
    • Solution Assessment and Verification
    • Solution Evaluation and Acquisition
  • Level 3 Business Value Delivery
    • Business Case Development and Use
    • Business Rules Management
    • Business Process Improvement
    • Business Performance Measurement
    • Organizational Change Management
    • IT Service Strategy and Design
    • Transition Management
    • Benefits Realization Management
  • Level 4 – Enterprise Portfolio Management
    • Process Portfolio Management
    • Project Portfolio Management
    • Stakeholder Portfolio Management
    • IT Service Portfolio Management
  • Level 5 – Business Model Innovation
    • Enterprise Business Architecture
    • Enterprise Portfolio Management
    • Business Model Analysis
    • Innovation Management

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1 Comment

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