One in six major IT projects go 200% over budget

We had published this article in the past on a different platform and we republish here for its importance.

One in six major IT projects go 200% over budget – Knowledge Centre – ITP.net. This is an article published by ITP Publications By Mark Sutton Published August 27, 2011. However, the article actually reflect a study that was published in the September 2011 issue of HBR.

Today, we will summarize the important points from the study and we will elaborate on some items here and in a follow up article.

This is a very interesting article reflecting a study done at Oxford University. We want to share this article with our community and discuss a few important points.

  1. “The study found that while most IT projects went less than 30% over budget, …” What does this mean? Most of these projects were over budget – unfortunately the article did not give a percent of projects running over.
  2. “… one sixth ended up costing three times as much, or over ran schedule by 70%, delays and overspends that have proven fatal to some companies.” Wow – one sixth is about 17%.
  3. “… large IT projects are 20 times more likely than normal projects to spin out of control.”
  4. “The study, … found little difference between public and private sector projects in terms of likelihood of going over budget or over schedule.”
  5. “… IT projects are often not managed the right way. The new research tells us why, so we can fix the problem and take IT project management to a new, more professional level.”

All of the above quotations are from the article.

  • Quotes 1, 2, and 3 is from the article writer
  • Quote 4 is from Principal investigator Professor Bent Flyvbjerg
  • Quote 5 is from Jürgen Laartz, director at McKinsey and Company
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About Mounir Ajam

Mounir Ajam is eager to awaken the giant of project management within individuals, organizations, and nations! Mounir is a project management author, executive, consultant, and social entrepreneur. Mounir is open for further learning and knowledge sharing.He has global experience working on projects in the United States, Europe, South East Asia, West Asia, and Africa. He has been privileged to work on multiple small projects and mega projects.

  • This comment is By Erini Lytrides Michael on LinkedIn:

    Probably right however at Cosine we tend to stick to our customers’ IT Project Budgets! Of course its hard work to define and size the project correctly from the beginning, however its worth it -as we love having happy customers!