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This is a detailed report from a company specializing in computer programming. It reminds us that projects begun are not projects finished: on time, within budget, or at all. It was published in 1995. It is still not believed.
Here is an extract:
"On the success side, the average is only 16.2% for software projects that are completed on-time and on-budget. In the larger companies, the news is even worse: only 9% of their projects come in on-time and on-budget. And, even when these projects are completed, many are no more than a mere shadow of their original specification requirements. Projects completed by the largest American companies have only approximately 42% of the originally-proposed features and functions."
Anyone who thinks that y2k can be solved on time needs to read this report.
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In 1986, Alfred Spector, president of Transarc Corporation, co-authored a paper comparing bridge building to software development. The premise: Bridges are normally built on-time, on-budget, and do not fall down. On the other hand, software never comes in on-time or on-budget. In addition, it always breaks down. . . .
In the United States, we spend more than $250 billion each year on IT application development of approximately 175,000 projects. The average cost of a development project for a large company is $2,322,000; for a medium company, it is $1,331,000; and for a small company, it is $434,000. A great many of these projects will fail. Software development projects are in chaos, and we can no longer imitate the three monkeys -- hear no failures, see no failures, speak no failures.
The Standish Group research shows a staggering 31.1% of projects will be canceled before they ever get completed. Further results indicate 52.7% of projects will cost 189% of their original estimates. The cost of these failures and overruns are just the tip of the proverbial iceberg. The lost opportunity costs are not measurable, but could easily be in the trillions of dollars. . . .
On the success side, the average is only 16.2% for software projects that are completed on-time and on-budget. In the larger companies, the news is even worse: only 9% of their projects come in on-time and on-budget. And, even when these projects are completed, many are no more than a mere shadow of their original specification requirements. Projects completed by the largest American companies have only approximately 42% of the originally-proposed features and functions. Smaller companies do much better. A total of 78.4% of their software projects will get deployed with at least 74.2% of their original features and functions. . . .
The Standish Group further segmented these results by large, medium and small companies. A large company is any company with greater than $500 million dollars in revenue per year, a medium company is defined as having $200 million to $500 million in yearly revenue, and a small company is from $100 million to $200 million.
The figures for failure were equally disheartening in companies of all sizes. Only 9% of projects in large companies were successful. At 16.2% and 28% respectively, medium and small companies were somewhat more successful. A whopping 61.5% of all large company projects were challenged (Resolution Type 2) compared to 46.7% for medium companies and 50.4% for small companies. The most projects, 37.1%, were impaired and subsequently canceled (Resolution Type 3) in medium companies, compared to 29.5% in large companies and 21.6% in small companies.
Restarts
One of the major causes of both cost and time overruns is restarts. For every 100 projects that start, there are 94 restarts. This does not mean that 94 of 100 will have one restart, some projects can have several restarts. . . .
Equally telling were the results for cost overruns, time overruns, and failure of the applications to provide expected features. For combined Type 2 and Type 3 projects, almost a third experienced cost overruns of 150 to 200%. The average across all companies is 189% of the original cost estimate. The average cost overrun is 178% for large companies, 182% for medium companies, and 214% for small companies. . . .
For the same combined challenged and impaired projects, over one-third also experienced time overruns of 200 to 300%. The average overrun is 222% of the original time estimate. For large companies, the average is 230%; for medium companies, the average is 202%; and for small companies, the average is 239%.
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