IT projects are not always successful—such is the price of innovation. Yet, depending on the source, up to 85% of these projects fail, which seems astronomical. In contrast to other industries, developing information technology solutions has not decreased its failure rate over the past 20 years. The question is, what are the causes, and what can companies do to improve? Why is the failure rate so high, and what are possible strategies to reduce it? And what are the specific challenges of archiving legacy data?
IT projects often fail: not at AvenDATA
Failure is difficult to measure in IT. Many factors determine the success of a project, but there is no industry-wide terminology. According to German analysts, about half of all IT projects fail. Industry experts, noting the high number of unreported cases, put the failure rate for German companies at around 75%. This seems excessive, but Germany still performs better than many other countries.
According to the PMI Global Project Management Survey 2017, software projects in particular are notorious for falling short. A total of 14% are cancelled without any results, 31% do not meet their objectives, 43% exceed their budget and 49% exceed the agreed timeframe. Only 15% of projects are delivered as planned.
Since 1995, the CHAOS Report of the Standish Group has collected new numbers from the IT industry every two years. In 2015, only 15% of the cases examined were found to have successfully completed the project. Although this study refers to software development projects specifically, it provides an indication for the IT industry in general. Encouragingly, the report found that 66% of IT projects in Germany were generally successful. However, 19% were over budget, behind schedule or had limited functionality. 15% were considered a complete failure and were either cancelled without results or never used again.
Last year, AvenDATA was an outlier among German IT service providers regarding its success rate. The company was successful both in terms of budget and timeframe. This result is particularly interesting because legacy systems are responsible for a wide range of potential risks in corporate IT.
According to CEO Emanuel Böminghaus, target-oriented project management is the key to the company’s success: “All projects are budgeted with a fixed price in advance. Therefore, we are very interested in completing the projects on time and free of any errors”.
Why IT projects fail
A study by BITKOM e.V. found that 75% of all IT projects fail due to errors in the set-up phase. According to the study, the most common reasons for the failure of IT projects are unclear or inadequate requirements, incorrect time and budget planning, and inadequate communication between project participants. This is consistent with surveys conducted by the German Association of IT Users (VOICE e.V.).
This mismatch inevitably leads to an increasing number of organizations with legacy systems. It is therefore not surprising that 59 per cent of respondents believes that failures are likely to occur within the next three years. Respondents believe that legacy system failures will have a significant impact on the IT supply chain and business operations. This suggests that there is a growing need to refresh systems. Cloud technology is currently the best way to do this.