Study: 68 percent of IT projects fail, user centered methodologies to save the day

According to new research, success in 68% of technology projects is “improbable.” Poor requirements analysis causes many of these failures, meaning projects are doomed right from the start.

These are staggering numbers, hitting the high end of the Standish Chaos Report and presenting a far worse picture than Sauer, Gemino, and Reich.

Key findings from the report, The Impact of Business Requirements on the Success of Technology Projects from IAG Consulting, include (emphasis added):

1. Companies with poor business analysis capability will have three times as many project failures as successes.
2. 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis. In fact, 50% of this group’s projects were “runaways” which had any 2 of: taking over 180% of target time to deliver; consuming in excess of 160% of estimated budget; or delivering under 70% of the target required functionality.
3. Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects.
4. Over 41% of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.
5. The vast majority of projects surveyed did not utilize sufficient business analysis skill to consistently bring projects in on time and budget. The level of competency required is higher than that employed within projects for 70% of the companies surveyed.

This chart illustrates the requirements skills gap most companies face:

The impact of this skills gap is substantial, directly increasing project time, cost, and risk of failure. The “skills gap premium” is reflected in this graph:

Today, just as in the time of the first release of Chaos Report, companies could still do better if they had the appropriate means of capturing requirements (the sooner, the better). The challenge is that user requirements do not necessarily translate into user requirements. User Centered Methodologies can help product managers to bridge the gap.