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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 percent 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 EUR12.5 million, with single biggest write-off costing almost EUR210 million.

The KPMG survey also said that only 9 percent of organisations feel that delivering projects within budget is their most important measurement for success. Twenty-one percent 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 percent 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 percent of organisations' relevant employees. Additionally, while 4 percent of personnel had between 5 and 10 years' experience, only 20 percent have 10 years' experience or more. Eighty-one percent 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."

Fergal McGovern, founder and chief technical officer of Irish software company SteelTrace said the survey echoes other research which has revealed poor communications as a culprit in IT project failure.

"The numbers certainly back up what we have saying...there is often a disconnect between business people and technical people," he said. McGovern cites similar research from 1998 which suggested that many as 27 percent of IT projects are a wash-out, but he said the problem cannot be attached to company managers or the engineers who build the new infrastructure specifically. Both groups have failings, he said, with engineers failing to communicate and note all their activities and managers' failure to comprehend the size and scope of a project.

SteelTrace makes two software products, Catalyze Solo and Catalyze Collaborate, which are designed to help companies roll out big IT projects by allowing giving all individuals the ability to log and manage the development of a project.

Additional figures from the KPMG study showed that, on average, each programme management office oversaw 83 projects valued at a total of EUR105 million. Matthew Clark