Failed IT projects cost businesses millions, says survey

The KPMG research, which was carried out among 134 major listed companies in the UK, US, Africa, Australia and Europe, found that 56% of the organisations surveyed had to write off at least one failed IT project in the past 12 months. The average loss incurred by the businesses surveyed was £8 million per failed project, whilst the largest single project failure reported cost £133 million.

According to KPMG, only 9% of organisations feel that delivering projects within budget is their most important measurement for success. Also, only 21% said that being on-time was their top driver.

The survey also found that inadequate planning, poor scope management and poor communication between the IT function and the business were the most commonly cited reasons for failure.

Moreover, 67% of the those interviewed rated their programme management function as "in need of improvement or immature", whilst only 44% measured project performance against established measures.

Finally, the survey found that only 23% of the organisations' relevant employees were certified by the Project Management Institute, whilst 81% used a "home grown" methodology to manage their projects.

Bryan Cruickshank, UK Head of Information Risk Management at KPMG said:

"Large organisations often run multiple business transformation and IT projects at any one time, where a central programme management office is pivotal to ensuring the effective co-ordination, quality assurance, risk management and reporting of all the programmes underway.

"The risk is that without a sound programme management function, project costs overrun, timescales slip and the planned benefits lose their focus and are not realised."