This paper presents the results of a 2009 survey of professional IT auditors that explored their perceptions about root psychological and sociological causes of Information Systems (IS) project failure based on the punctuated equilibrium theoretical framework. As predicted by punctuated equilibrium theory, the results of the survey indicate that radical as opposed to incremental organizational changes are more effective in turning around "runaway" projects. The results indicate that IS development project performance is worse in government than in the private sector, and provide support for the continued use of punctuated equilibrium models for research in information systems development project performance.
CURRENT INFORMATION TECHNOLOGY (IT) ISSUES
The rate of information systems development project failure in the 1980s and 1990s was routinely documented to be above 50%, the larger the development; the more likely it was unsuccessful (SIMPL & NZIER, 2000). A 1994 study of IS development projects in the British public sector estimated that 20% of expenditures were wasted, and a further 30% to 40% did not produce perceivable benefits (Wilcocks, 1994). Also in 1994, the U.S. General Accounting Office reported that spending of more than US$200 billion in the previous twelve years had led to few meaningful returns. A 1995 study of over 8,000 IS projects by Johnson revealed that only 16% were completed on time and within budget (Johnson, 1995). The U.S. Internal Revenue Service, with an annual computer budget of US$8 billion, managed "a string of project failures that have cost taxpayers $50 billion a year [mainly defined as revenue forgone] - roughly as much as the yearly net profit of the entire computer industry" (James, 1997). Collins and Bicknell (1997) estimated that public sector failures in the United Kingdom cost £5 billion. The Wessex Health Authority's Regional Information Systems Plan was cancelled after more than £43 million had already been spent, with little achieved (Collins et al., 1997). The New Zealand Police abandoned an IS development in 1999, at a cost of more than NZ$100 million, after years of development provided little more than an e-mail system and a number of terminals run by a 1970s-era mainframe. A study by SIMPL & NZIER (2000) found that the success rate was only 55% for projects under US$750,000; however, for those with budgets over US$10 million, no projects were successful. A 2001 U.S. Standish Group survey of IS projects found success rates were as follows: 59% in the retail sector, 32% in the financial sector, 27% in manufacturing, and 18% in government. Overall, the average success rate was 26%. In all, 46% of the projects had problems, including being over budget, behind schedule, or delivered incomplete. Another 28% failed altogether or were cancelled, and cost overruns averaged nearly 200% (SIMPL & NZIER, 2000).
The beginning of the 21st century showed little improvement in IS development project performance. In 2002, the United Kingdom's National Health Service initiated the largest-ever public sector project at an estimated cost of £1 1 billion. This led to the introduction of new information systems in almost every hospital, but it was still considered a failure (Rainer & Turban, 2009). A benefit payment scheme involving the British Post Office, the Department of Social Security, and the computer company ICL was abandoned after three years and a cost of £300 million (The Economist, 2002). An already obsolete air-traffic support system opened at Swanson in the United Kingdom, in 2002, six years late and £180 million over budget (The Economist, 2002). The Canadian Firearms Program increased from initial estimates of C$113 million to more than C$1 billion, an overrun of almost 900% (Auditor, 2002). Georgiadou (2003) found five out of six corporate projects are considered unsuccessful, with one-third cancelled. Of the twothirds that were not cancelled, price and completion times were almost twice what had originally been planned. …