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Executive Summary
This paper has two objectives. One to uncover the potential reasons of software project
failures and discuss the critical factors that influence successful projects. The other to
evaluate the validity of the statement given in assessment, that is taken from Attarzadeh
(2008). The first part of the paper analyses the trends of IT project success rates over the
past two decades and then describes the critical factors that cause software project failures
in detail. The paper then tries to recognize what constitutes a successful IT Project from the
IT industry's perspective and explore the possible ways by which success rate can be
improved by citing few of the best practices from sources within the industry. This paper
then discusses the research findings along with inferences drawn and finally give our
recommendations that can help managers to better navigate the common pitfalls in IT
project management and enable them to achieve higher success rates.
In terms of the scope of the paper, it is limited to the reasons for failure or success of IT
and software projects and does not go into projects related to the other management aspects
of an organization, such as sales or marketing or the affect IT projects have on them.
For the purpose of the research, the author of this paper mainly used articles from journals
pertaining to Information Technology that are listed in section 2. We also used conference
papers and world accepted reports such as IEEE, Standish Group reports, along with
articles and popular books on this subject written by renowned experts from the industry
and notable authors to support our research.
The main findings of the research are that around 60 percent of IT Project fails. This
percentage is excluding those that are challenged or have cost and schedule overruns. The
paper broadly classifies the reasons found into three categories, which are people,
organizational culture and processes and lack of proper resources and technological
platforms. The paper explores the critical failure factors falling under each category in
detail. After analysing the causes of IT project failure, we feel that the use of agile methods
such as Crystal, Extreme programming and Rational Unified Process along with some best
practices in terms of organizational management and having a Project Manager with
appropriate skill set and experience and good top management support can help IT projects
to be more successful. However we feel that further research needs to be done in order to
find out what constitutes IT project success especially in some specific cases.
1. Introduction
In this global age, an age where speed, accessibility and visibility are the talking point,
companies rely heavily on Information Technology for their business performance. This
fact has been validated beyond doubt as companies are incessantly trying to use IT where
ever applicable in order to optimize their resources, be it manpower, finances, material or
information flow and most importantly "time" to gain competitive advantage and increase
profitability. Software companies on the other end are trying to get as many projects as they
can to garner greater respectability, expand their business and obviously their bottom-line.
However, it's not a rosy picture for software firms who develop these softwares.
In November 2012, the U.S Air force had to give up the "Expeditionary Combat Support
System" an ERP project, after it racked up $1 Billion, with only one forth its original scope
completed. It would need additional time, and would not be completed until 2020. The
department felt it would not be suitable as it was not improving anything in terms of
military application and was eventually scraped. Kanaracus. (2012). There are many such
cases of projects being scraped in various industries.
Software projects have a high failure rate compared to other projects which is matter of
great concern not only for the IT industry but to all those companies who use them, as it
can incur huge losses in terms of money, time and resources as seen in the above examples.
In this paper we explore why this happens, what are the critical factors that cause IT
projects to fail. We also look at ways by which we can improve the success rate and explain
some key methodologies used by successful projects. We then discuss the findings, weather
it substantiates the statement provided in the assessment, from Attarzadeh (2008). Finally
the paper gives its recommendations to have better success rate in the future.
healthcare,
hospitality,
transportation,
defence
and
government
organizations to name a few. They have become an integral part of any office, for the main
purpose of speeding up process by automation and information sharing. It has become the
single most important technology in the world and is an excellent example of "law of
unintended consequences" as described by Kelkar (2013).
A software project like any other project is a mission to create a platform that will make the
end user's life easy. It is limited by time, budget and people and constitutes of certain
performance specification and features to meet the user expectation. It involves what is
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Figure 3: IT Project Success Rate, Source - Chaos Research 2012 Standish (2013)
The latest report "Chaos Manifesto 2013" by the same group suggest that it has further
improved to about 39% as shown in Figure 3, indicating that the industry is responding
well to the situation Standish (2013). However, the fact that still around 60% are either
unsuccessful or had cost and schedule overruns or dint deliver the required features means
there is much more to be done. Figure 4 illustrates the percentages of time, cost overruns
and features for the period - 2004 to 2012. As shown there has been an increase in time and
cost overruns since 2010 ( 71 to 74%). Although, percentage of projects failing to meet the
"features" that is nothing but the specified functional requirements has gone down a bit to
69%, but is still higher than during the period from 2004 to 2008. These stats are very high
and is a reason for concern in many organizations in the world as lot of the company's
resources like people, time, money, hardware and software can be saved as stated by Purna
Sudhakar (2012).
Figure 4 : IT Project Overruns and Features, Source - Chaos Research 2012 Standish (2013)
to better guide the team. In addition to this, he must also have the ability to lead, negotiate,
communicate, assess his teams capabilities and be able to reorganize and solve problems
quickly and effectively. Jiang (2007) in their paper discusses how these aspects effect the
performance of software projects. In his research he establishes how Information Systems
(IS) personal skills and project performance is to some extent mediated by organizational
technology learning. Hence skill set of the people involved in development is a critical
factor for software project success.
3.3.2 Effect of Organizational Culture and Process
(i) Lack of Project Selection and Insufficient Planning
Planning is the foremost step in an IT project. It refers to the process of deciding in
advance what to do, where to do and with what resources. It is at this stage that cost
estimates, team size and composition, the customer requirement, project assumptions and
other resource planning activities pertaining to the IT environment and systems are
established. It is also in this stage where "Software Requirement Specification" or SRS is
defined. This is a basic component of any software development project and when not well
defined can cause misunderstandings. Imprecise or an unconvincing business case might
lead to lack of proper approvals which in turn leads poor estimation and causes project
failure.
(ii) Lack of Top Management Support and Commitment
The entrepreneur in the company is the one who makes the strategic decision and thus it
goes without saying he plays the most important role in terms of the 'decision context'. All
studies done so far point towards this attribute as a critical success factor. The management
need to be aware upfront or be visibly and vocally behind a project. In some cases a strong
backup from top management can turn things around for projects that are going badly or is
going through a bad implementation phase. Commitment is another aspect that is
important.
manager might not understand the initial project scope and might not have the complete
knowledge of processes involved and sometimes may withheld approvals. He may not
want to pursue the project in the current manner for a variety of reasons as elucidated by
Imtiaz (2013). Also the project team might not be able to easily communicate and convince
the new manager. This leads to project failure.
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appropriate skill set, appropriate technological platforms needed and the availability of
financial resources. Many times projects goes wrong because wrong and inappropriate
technology choices. A project may receive the right resources but if managed poorly leads
to wastage and requirement of additional resources. Imtiaz (2013) points out that
availability of these resources- financial, people and technology are dependent on the Top
Management support discussed earlier.
Figure 4: Defining IT Project Success, Source - 2013 IT Project Success Rate Survey Scott W. (2013)
The above figure illustrates what IT professionals consider a successful project based on
survey carried out in 2013 by Scott W. (2013) . Majority felt completing project on time
was the most important determinant for defining project success, were as 36 % believed it
was to be within budget constraints and 14% felt it was to meet the desired specifications.
Agarwal (2006) in their research found that most of the stakeholders of IT project
management team consider 'scope' of the software project as the most important criteria for
defining success. Scope includes the functionality and quality of project outcome.
Schawalbe (2011) in her book gives a more inclusive definition of IT project success,
saying if it met scope, time, cost goals, satisfied customer or the sponsor.
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4. Discussion
In today's world, no field is without software programmes and systems. To work effectively
one must be able to articulate one's needs to the Software developer in order to get a system
that best works in the business environment. In order to do this the IT user must be able to
"speak the IT language". As we have seen that all is not well with Software Project
Management with success rate currently being a mere 40 %. Hence I do agree with factors
discussed which are quite valid especially with regard to the software industry.
But there is another side to it. The definition of IT project success with regard to the time budget requirement is usually decided by the vendor or supplier. There needs to be a
stakeholders perspective while defining success as well. Also the fact that most of the time,
the budget and timelines are set at the start when uncertainty is at its maximum it is
practically impossible to define the project success criteria at that stage. In addition as we
have seen in section 3.1 how software development is unique in its own way and have
constant technological changes that are inevitable, along with the fact that all techniques
need not work with specific types of project I feel that there are more things that need to be
considered in terms of the definition of IT project success. Hence the statement found in
Attarzadeh (2008) is valid.
5. Recommendations
All is not lost for IT projects. I feel there are certain things that need to be set right, some of
which are quite basic in nature with regard to project management, this along with best
practices followed by leading firms could enhance the project success rate. Some of the
key recommendations that I would like to propose in order to have IT project success in the
future based on the research carried out are discussed below.
(i) Team Motivation and Collaborative Atmosphere plays a critical role in project
success. Higher the motivation greater will be the overall output. I find this the single most
important factor especially considering the fact that there is a lot of pressure when it comes
to software projects. People get disgruntled fast especially when things don't go right.
Sometimes they even leave their jobs in middle of the project. How well the project lead
can motivate the team when the chips are down, when there are disagreements or when
deadlines are approaching close, more the chances of the project succeeding. I would also
like to includes aspects such as user involvement, and better understanding between all
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stakeholders, discussed in section 3.3.1 under this point. There needs to be an overall
collaborative atmosphere among team members, internal and external stakeholders,
solution architects, client team and the executive sponsor.
(ii) Manager should use Best Practices and Lessons Learned
In order minimize or avoid the nastiest scope creep, a project manger should contemplate
even minor changes to the initial project scope cautiously and rework the course of events ,
provide new estimates and communicate it with all the stakeholders before incorporating
the changes. Jones (2010) discusses about fifty best practices used by highly successful
software project companies like Microsoft, IBM, Sony and EDS. The author explores how
these practices can ensure success in the field of software engineering. One practice for
example is instilling a process of continuous improvement while modelling the software
development process which can have a good impact on the performance of future projects.
(iii) Use of Agile Methods
I believe the use of latest Agile methods can be very effective technique and can turn things
around for IT projects. It covers all aspects of the SDLC right from planning to delivery in
a very unique and effective way. Many of the methodologies discussed in section 3.4.2 are
not yet being followed on a large scale and more the companies use them better will be the
end results. However there is much more to be done with regard to use of agile methods to
mitigate risk.
6. Conclusion
Summary: This paper investigated the prime factors that affects software project success.
The study was carried out in order to understand why there is such a low success rate for
IT projects compared to other projects.
Findings : We found that currently the project success rate of IT projects is around 40
percent section 3.1 that is quite low compared to other kinds of projects and causes huge
losses to companies. Nevertheless, in our study, we also found that the industry is
responding well by incorporating new and agile methods that has helped in improving the
success rate over the last decade. In addition we found that Project Managers play an
important role. They need to inculcate a habit of using best practices and have a continuous
learning mentality that can help the entire team in meeting the project deliverables.
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Limitation : We limited the scope of this study to projects pertaining to the Information
Technology sector or the software projects and its success criteria. We did not explore the
affects, IT projects have on other management aspects of an organization, such as sales or
marketing. Also our paper does not look into specific IT projects where additional
determinants needs to be considered in defining "success". Further research needs to be
carried out for analysing and understanding these factors in a more comprehensive way.
7. Reflection
Coming from a Telecomm management background there were many things I could
connect with in terms of project management, but nonetheless the learning curve was a
steep one for me as it had a lot to do with software projects in particular. In order to find
the criteria for success and failure, I had to start from square one, which was understanding
the fundamentals of IT Project Management and how IT Project Management differ from
other kinds of projects. The next challenge was to understand the way IT projects are done
in the real world, the processes, tools and techniques. Only then could I move towards
critical analysis of the project cycle and its pitfalls. There are two books I liked in
particular and would like to mention. One was Schawalbe (2011) and the other Stepanek.
(2012) which helped me understand information technology projects in a better way. From
the research, I learnt that a Project Manager plays a crucial role in building the team and
delivering a successful system. He needs to have experience, good technical and analytical
skills along with exceptional soft skills that are needed to bring the team together and get
the best from each team member. I also learnt a few things about the latest technological
and statistical methods that are used in better analysing the pitfalls in software
development and how they improve the process in order to achieve greater success.
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8. References
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An Explanatory reveleation." International Journal of Project Management(24):
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Attarzadeh, I., Hock,Siew (2008). "Project Management Practices: The Criteria
for Success or Failure " Communications of the IBIMA: 234-241.
Cerpa, N. and J. M. Verner (2009). "Why did your project fail?" Communications
of the ACM 52(12): 130-134.
Chow, T. and D.-B. Cao (2008). "A survey study of critical success factors in
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