August 21, 2011 from the Toronto Star – “Ambitious IT projects are ticking time bombs that can bring down corporations if they’re not carefully managed to come in on time and on budget, warns a study in the Harvard Business Review.
The Oxford University researchers examined 1,471 information technology projects, in private and public sectors, comparing budgets and estimated performance benefits with actual costs and results.
They had expected to find IT projects incur large average cost overruns, but they were surprised to see fully one in six projects — nearly 17 per cent — were so mismanaged that they had average cost overruns of 200 per cent, not factoring inflation, and delays of 70 per cent…”
180 View – IT projects usually involve unknowns and when selling or estimating time and budget, assumptions are made. So the solution is to try to reduce the unknowns by clearly defined scope and to expose the assumptions. It sounds simple, but it takes a lot of up front work to get this done properly before making a decision to proceed. As well, project failure should not be based on overruns. Project failure should be based on whether the project objectives are met.