Successful, failed and other projects
January 19, 2016
It is common knowledge that a large proportion of business projects and programs fail. Gartner estimates that 55 – 75% of ERP projects fail. A recent study by the Standish Group (Oct 2015) analyzed 50 000 projects in the software industry. Only 29% of them were successful.
What does a project failure or not being successful actually mean? Is it always a complete failure when millions are spent while the project is cancelled, never completed or does not deliver any value? Not exactly. There is no precise boundary between successful and failed projects. In Standish Group’s report, 19% of the projects were considered to be failures while 52% of the projects were between a success and a failure. These were called challenged projects. A project that is not successful may not meet all of the criteria of a successful project such as being on-time, on-budget and delivering a satisfactory result. They can for example be delayed, but still bring value for the organization in the end.
Although not being successful does not necessarily mean a complete failure, it can still have major implications. In their 2014 report, Standish Group identified that among the failed or challenged projects:
All of these issues reduce the return on project investment.
There is a multitude of factors underlying project failure. The Project Management Institute (1996) considered 70 possible reasons for project failure in its study. The most common reasons were inadequate planning, project definition and scope. The Standish Group (2015) identified executive sponsorship, emotional maturity (how people work together) and user involvement as the top success factors. A total of 11% of the waterfall projects were found to succeed, while the figure for agile projects was 39%. They also found that as the size of the project grew, the likelihood of failure increased very rapidly.
Key parties making project investment decisions and managing the implementation (business owners, portfolio management, project managers, steering group members and others) need to understand these factors and be able to manage them.
During the upcoming months, Midagon will publish a series of blogs where key factors helping projects to succeed are discussed.