There have been two high-profile technology project failures in recent years: the Obamacare website train wreck and the NHS Patient Records System.
Those involved in delivering major projects and programs understand that value is lost whenever a project is delivered late, over budget, or fails to meet expectations. While major catastrophes like these may not hit an organisation every year, most projects do not achieve their goals.
Despite this, many organisations consistently experience similar failures, showing little change in performance year after year. Projects are executed poorly, lessons are learned, action plans are made, yet project failures persist, and value continues to be left on the table.
A recent survey from PMI¹ found that high-performing organisations risk US$20 million for every US$1 billion spent on projects, whereas low-performing organisations risk US$280 million for the same US$1 billion spent. A high performing organisation was defined as one that delivers more than 80% of its projects on-time, on budget, and meeting requirements, while a low performing organisation achieves the same 3 criteria less than 60% of the time. Based on this information alone, the scope for improving the bottom line through stronger project management is enormous. This opportunity is often overlooked, partly due to its perceived complexity.
Many areas contribute to technology projects not delivering on their goals. These include:
One area often overlooked but frequently a cause of project failures is external dependencies not foreseen when the project began. Examples include an acquisition or divestiture of a business unit, an internal reorganisation, or changes in government regulations. These are the "unknown unknowns"², difficult to anticipate, though their likelihood increases with project duration.
Based on our research and experience, we defined a comprehensive model for Project Performance that considers the most common causes of project failure.
Understanding why projects fail should, in theory, make it relatively easy to prevent outcomes such as the Obamacare website, the NHS Patient Records system and other similar project failures. However there are several reasons why lessons learned from the past may not be transferred into future projects such as a lack of organisational learning, biased forecasting, or, as described earlier, a lack of appreciation of external dependencies.
Yet, some organisations are able to capture the value of delivering successful technology projects. These projects may still experience the same challenges in terms of technology, skills or governance, but they are able to overcome these and deliver on their defined success criteria.
As there is no single cause of project failure, there is no silver bullet for project success. A comprehensive approach is needed that continually challenges the project against known failure causes and success drivers, and takes the right actions based on this assessment. This allows major problems to be identified and resolved early, before it is too late.
For example, during the Project Definition phase, key questions should be addressed:
When it comes to Project Management, having a high-quality, experiences project manager and following a recognised methodology provides the foundations to handle change, manage risk proactively, and maintain effective communication. Strong project management also reduces the likelihood of skills gaps or fragmented decision-making.
Applying this comprehensive Project Assurance approach across all 10 areas of the reference model ensures that no factor is missed in pursuit of delivering the expected project outcomes.
For example, this reference model was used as part of a Project Performance Assessment on 3 different application implementation projects as shown below:
Project A ran nearly 90% over the scheduled timeline. It also exceeded the planned budget by a similar amount. Since the system was revenue-generating, the impact of lost business benefits was much greater. The key issue was the selection of immature technology, compounded by overall poor project management and a lack of integration and software quality. After a project recovery effort, a working system was eventually implemented.
Project B was delivered 30% later than planned. It eventually delivered all requirements to the satisfaction of customers and stakeholders, but the original budget and business case were not met. The main cause of delay was weak project management, which also impacted the quality of results and the ability to obtain enough skilled resources.
Project C was delivered on-time, under-budget. Despite some minor technology glitches at go-live, it achieved its goals. The project was affected by some external dependencies in the form of late requirements, but strong project management mitigated these risks without significant impact.
The benefit of assessing project performance this way is that problem areas can be identified as early as possible using tangible measurements, allowing corrective actions to get the project back on track.
Customers often rely on contracts to manage risk—through mechanisms such as penalties, liquidated damages or step-in rights. But these are reactive, and rarely recover the full value lost in a failed project. This is particularly true where the client’s own responsibilities have not been fully met.
Improving project performance through a structured assurance approach is a more proactive and effective strategy. It helps identify risks early, respond decisively, and protect the outcomes the project was designed to deliver.
As the PMI survey shows, the financial gains from improved project delivery are substantial—and, in our experience, achievable even in complex environments.
management performance.
¹PMI’s Pulse of the ProfessionTM: The High Cost of Low Performance, May 2013 ²Donald Rumsfeld, US Secretary of Defence, used the term “unknown unknowns” in 2002 in relation to the search for WMD’s in Iraq.
