Blog / The Standish Group Reports 83.9% of IT Projects Fail – How to Save Yours

The Standish Group Reports 83.9% of IT Projects Fail – How to Save Yours

According to a previously published report by The Standish Group, only 16.2% of IT projects were deemed successful by being completed on time and budget, with all the promised functionality. A majority of projects were over cost, over time, or lacking promised functionality, and 31.1% of IT investments classified as failed, which means they were abandoned or cancelled. The numbers sound dismal and discouraging for any business looking to optimize their operations with new ERP or infrastructure.

However, in a time where capacity shortages and supply chain issues bring new finance, production, and competitive market challenges to nearly every business, the risk of not upgrading and modernizing your technology may be higher. Want better news? There are common factors and characteristics of successful projects that can steer your IT venture in the direction for victory.

Whether you have your sights set on a move to cloud ERP, like Microsoft Dynamics 365 Business Central for growth and scalability, or your want better reporting and analytics for quick decision making, it is helpful to understand the top factors found in each of the three project classifications.

Top Five Factors in Successful IT Projects

These factors should be put on a checklist for anyone considering an IT project, whether large or small. While risk rises with size and complexity, even simple projects can fail if the participants do not have clarity on these five principles.

  1. User involvement
  2. Executive management support
  3. Clear Statement of Requirements
  4. Proper planning
  5. Realistic expectations

Top Five Indicators in Challenged IT Projects

This list adds a few variables that didn’t show up in the first list, namely changing requirements and specifications, and technical incompetence – two more things to watch out for. If you see a a growing number of change orders coming out of your project, you can be assured the risk for failure has risen substantially. Technical competence means you need to confirm the necessary skills and not just give elements of the projects to internal people because they are enthusiastic.

  1. Lack of user input
  2. Incomplete Requirements & Specifications
  3. Changing Requirements & Specifications
  4. Lack of executive support
  5. Technical incompetence

Top Factors in Failed IT Projects

This is your major red flag list. If you see any of these creeping into your project, it’s best to take a step back, pause the activities, and reset. If you’re working with a trusted IT and business technology partner, they should also be able to spot some of these coming and help you readjust to pivot timelines, resources, or approach to course correct.

  1. Incomplete Requirements
  2. Lack of user involvement
  3. Lack of resources
  4. Unrealistic expectations
  5. Lack of executive support
  6. Changing Requirements & Specifications
  7. Lack of planning
  8. Didn’t need it any longer
  9. Lack of IT management
  10. Technical illiteracy

At Open Door, we’ve worked with hundreds of clients on their successful ERP and IT projects. We could write a book with lots of interesting stories and anecdotes coming out of this failure list to serve as warning guide for any businesses coming into an IT project. For example, we worked with an organization where requirements were carefully reviewed in group sessions and documented (this is good!). But, when the ERP implementation project began, ownership decided to include a second company with a totally different sales and manufacturing process without readjusting their expectations on delivery. After carefully integrating the two requirements together, the project went live successfully, but of course it was challenged by both time and cost against original scope.

In another project, one staff member boldly stated the new system was “going in over his dead body.” Executive sponsorship meant we just went up the ladder and the project proceeded without any more hostility.

In particular, be careful and conscious to start with complete requirements gathering and don’t be so impatient that you don’t take the time to confirm the details. Surprises don’t help anyone. If too many new requirements come up during the interviews or implementation phase, park them in the parking lot and come back to them in one or more future phases. You are better off getting the core system running well and then implementing incremental change.

Choose Wisely: 7 Ways to Ensure Your ERP System Lasts the Life of Your Business

Your financial systems and infrastructure should facilitate growth and last the life of your business. Here are 7 ways to ensure you select reliable technology that is stable and scalable.

To get started on the right foot, get our free checklist for requirements gathering by accessing this article: ERP Selection Criteria Checklist for Your Business.

If you would like to find out more about how to run a successful IT or ERP project, or see how we use scalable project management methodology from our PMP-certified project process to handle small or large implementations, please contact us.

*Did you catch our blog about the potential ROI on having free ERP system upgrades? The advantages include significant gains and less disruption to your business. Read all about it here.