53% of Projects Cost 189% More than Estimated

Some time ago I liaised with Steve Lynn – a doctoral candidate at Kennedy Western University, USA and a Project Management Practitioner. He had conducted a survey to gather quantitative information on the importance of specific project management initiatives to their organisations.

Steve found that around 31% of application development projects are cancelled, 53% cost 189% more than their original estimates, and only one third of projects are completed on time and on budget. This backs up some already well known facts that indicate the high failure rate of projects. Can you imagine the outrage if cars, electricity or other things failed at this astonishing rate?

Steve’s study of project management methodologies and strategic execution probed the following questions:

1. Has the implementation of project management initiatives been valuable to the organisation?
2. To what levels are specific project management best practices implemented in respondents’ organisations?
3. Does the implementation and integration of project management methodologies improve the ability to execute existing corporate strategic initiatives?
4. Can an integrated framework of project management methodologies contribute toward corporate strategic flexibility and adaptability to changes/opportunities which develop in the external environment?

For purposes of the survey, project management best practices were grouped into the four categories;

1. Governance
2. IT Integration
3. Programmes and Projects
4. Performance and People

Respondents were asked a series of questions which were designed to establish characteristics of the individuals who responded to the survey. Key information included:

(a) Sex – 55% male, 45% female

(b) Age – 89% of respondents were 40 years of age or older

(c) Job Title – 86% had a project management-based job title

(d) Education – 90% had a bachelors degree or higher

(e) Experience – 92% had at least six years project management experience

(f) 55% held a project management certification (many other certifications listed)

(g) Industry – 41 different industries were represented

Food for thought!