E-Business: Failed Enterprises Cost Pounds 8m

The Birmingham Post (England), December 3, 2002 | Go to article overview

E-Business: Failed Enterprises Cost Pounds 8m


Byline: Steve Pain

Businesses are stumping up a massive pounds 8 million every time one of their IT projects fail, it was claimed today.

According to new research from KPMG International, some 56 per cent of organisations admit they have had failed IT projects in the past 12 months.

The average loss incurred by the businesses surveyed was pounds 8 million per project - but the largest single project failure cost a huge pounds 133 million.

KPMG's survey also revealed that only nine per cent of organisations feel that delivering projects within budget is their most important measurement for success.

Equally, only 21 per cent said that being on-time was their top driver. Commonly cited reasons for failure were inadequate planning, poor scope management and poor communication between the IT function and the business.

KPMG conducted the research with major listed companies in order to gauge and benchmark the effectiveness and maturity of programme management functions.

Sixty seven per cent of those interviewed rated their programme management function as in need of improvement or immature.

According to KPMG, only 44 per cent measured project performance against established metrics. On average, each programme management office oversaw 83 projects valued at a total of pounds 67 million.

Mohammed Rahman, information risk management partner at KPMG in Birmingham said: 'Large organisations often run multiple business transformation and IT projects at any one time, where a central programme management office is pivotal to ensuring the effective coordination, quality assurance, risk management and reporting of all the programmes underway.'

He added: 'The risk is that without a sound programme management function, project costs overrun, timescales slip and the planned benefits lose their focus and are not realised.' KPMG says that its research reinforces the correlation between organisations with strong and mature programme management functions and the incidence of successful projects. …

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