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IT project failure is rampant – KPMG

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Most public firms have written off failed IT projects in the past year, typically due to poor project management, according to a new report from KPMG.

The KMPG study, which covers 134 listed companies in the UK, US, Africa, Australia and Europe, reports that 56 per cent of firms have had to write off at least one IT project in the last year as a failure. The average loss incurred as a result of these failures was about €12.5m, with single biggest write-off costing almost €210m.

The KPMG survey also said that only nine per cent of organisations feel that delivering projects within budget is their most important measurement for success. Twenty-one per cent said that being on time was their prime driver.

Among the reasons cited for failure were inadequate planning, poor scope management and poor communication between the IT function and the business, KPMG said, with 67 per cent of the companies who participated in the survey claiming that their programme management function was in need of improvement.

Indeed, the survey carried many more statistics which suggested that the reason many such projects fail is poor communication between company managers and those who build and manage new IT infrastructure. For example, the Project Management Institute certified only 23 per cent of organisations' relevant employees. Additionally, while 4 per cent of personnel had between 5 and 10 years' experience, only 20 percent have 10 years' experience or more. Eighty-one per cent used what KPMG deemed "a home grown methodology" to manage their projects.

"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 co-ordination, quality assurance, risk management and reporting of all the programmes underway," explained Bryan Cruickshank, UK Head of Information Risk Management at KPMG. "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."

Additional figures from the KPMG study showed that, on average, each programme management office oversaw 83 projects valued at a total of €105m.

© ENN

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