Project success rates have increased to just over a third or 34% of all projects. This is a 100% plus improvement over the 16% rate in 1994. Project failures have declined to 15% of all projects, which is more than half the 31% in 1994. Challenged projects account for the remaining 51%.
Showing further improvements, fifty-one percent of challenged projects have a lower overrun ratio than in 2000. In fact, forty-six percent of this fifty-one percent had a cost overrun of less than 20% of the estimate. This is a 5% increase over the 2000 numbers and a three-fold increase since 1994. This was a major contributor to our estimate of a 43% average overrun cost, down from 180% in 1994. The lost dollar value for US projects in 2002 is estimated at $38 billion with another $17 billion in cost overruns for a total project waste of $55 billion against $255 billion in project spending. In 1994, The Standish Group estimated US IT projects had a waste of $140 billion ($80 billion in failed projects) against $250 billion in project spending.
However the report does not show all good news. Time overruns have significantly increased to 82% from a low of 63% in the year 2000. In addition, this year's research shows only 52% of required features and functions make it to the released product. This compares with 67% in the year 2000.
About The Standish Group
The Standish Group International, Inc. is a research advisory firm built on a solid foundation of primary research techniques. Through proactive advice, case-based reasoning tools and monthly statistical deliverables Standish delivers custom research services for the cost of a general research service. Founded in 1989, Standish is headquartered in West Yarmouth, Massachusetts. For more information, visit www.standishgroup.com.