Auditing Information Systems, Second Edition

15.2. PROJECT FAILURE

The primary risk of any IS development project is that of project failure. Failure can be total or, more commonly, partial. Partial failure includes completing the project late, over budget, with fewer features, or some combination of these.

In a 2000 survey of 1,375 North American IT professionals, the Gartner Group found that about 40 percent of IT projects do not produce their intended results. The study found that a canceled IT project lasted only 14 of the 27 weeks for which it was scheduled, caused organizations to spend an average of $1 million annually for unsatisfactory results, and caused IT professionals to spend 10 percent of their time on tasks that produced no business benefit. Project staff could predict project cancellation by six weeks, with team members knowing their efforts would be ultimately fruitless.^[]

Similarly, the Standish Group, an IT market research firm, found that only 16.2 percent of all computer software projects are completed on time and within budget; 52.7 percent are finished late, over budget, and with fewer features than promised; and 31.1 percent are canceled.^[] Here are some real-world examples of total and partial project failures:

• In 1993, after investing $49 million, the California Department of Motor Vehicles canceled an upgrade to its licensing systems after it learned that the project would actually cost $175 million.^[]

• In 1997, the Washington State Department of Licensing canceled a car and boat licensing system ...