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A 50% DW Project Failure Rate is Nothing New

There have been a lot of articles lately about project failures in IT. The latest is this one about 50% of DW projects being "doomed", based on a Gartner study. There's nothing specific to data warehouses about this failure rate. The stats haven't changed since I got my degree from the Software Engineering Institute, an organization specifically created to help make software development into more of an engineering discipline.

The reason the stats haven't changed is that people keep making the same mistakes, the biggest being blind trust that more technology is somehow going to solve the problem. Fred Brooks wrote "No Silver Bullet" to explain that new technology won't change the failure rate.

Let's look at some of the statistics from a collection of project failure stats (I can't find the original source for these):

CHAOS Report: According to the Standish Group's 2003 CHAOS Report, an analysis of 13,522 IT projects shows that 15% ?failed? and another 51% were considered ?challenged.? While the overall failure rate is down significantly from a 1994 level of 31%, 82% of projects now experience significant schedule slippage and only 52% of required features and functions currently make it into the released product. Source: The Standish Group.

Hackett Group: Thirty percent of all application projects lasting more than a year ?failed to meet business requirements,? a Hackett Group survey found. ?This failure rate would be untenable in virtually any other corporate function.? Source: The Hackett Group, ?2003 Profile of World-Class IT."

Kweku Ewusi-Mensah: A 1994 survey of 82 Fortune 500 companies by Kweku Ewusi-Mensah and Z.H. Przasnyski found that 44% of respondents had experienced ?total abandonment? of an IT project and another 16% had experienced ?substantial abandonment.? Source: Kweku Ewusi-Mensah, Software Development Failures.

KPMG: A 1995 KPMG study of 120 IT organizations in the U.K. found that 62% had encountered ?runaway projects? that either failed to achieve their objectives or experienced cost overruns of 30% or more. Source: A. Cole, Software World (UK).

OASIG: Another U.K. study by the OASIG special interest group in 1996 reported that 40% of IT projects fail or are abandoned, and 80% ?are delivered late and over budget.? Source: OR Newsletter, ?Why Do IT Projects So Often Fail?"

AMR Research: A 2002 study by AMR Research of 80 premier reference accounts of the top 12 CRM vendors found that 12% of their CRM projects failed to be implemented, 47% had significant end-user adoption problems, and 25% provided no definable advantage over the systems they replaced. Source: AMR Research, 6/03.

Every IT manager should be required to read Fred Brooks' writings before being allowed anywhere near an IT project. "The Mythical Man-Month" was written in 1975 and is still largely applicable today. This should be first, with "No Silver Bullet" a close second.

Posted by Mark Saturday, March 05, 2005 5:58:00 PM | permalink |