IT Projects: 400% Over-Budget and only 25% of Benefits Realized
An alarming study by Flyvbjerg and Budzier
published in the Harvard Business Review has made everyone stand-up and take notice. The coherent advice being that IT projects are much more riskier than we think.
The study showed that amongst the 1400+ projects surveyed, on an average 27% were over budget. 16% of the projects could easily be categorized as
Black Swans. They had a cost overrun of over 200% and were late by almost 70%. These were the projects which could cause stunning failures and bring down companies.
Boris Gloger mentioned that the
results were frightening.
These results are significant. But even more frightening are the conclusions of the authors of
Harvard Business Review article. They write: If you want to avoid the slow death caused by IT projects you must be prepared not only to spend 400% more than planned on the project, but to reap only 25% of the expected benefits. If you keep this in mind you can possibly prevent a company from being killed by an IT project.