Software Failure History: Not So Good!

The IT/Software industry has continued to struggle to bring in software development and/or implementation projects on schedule, on budget, in-scope and on-target. The Standish Group’s Chaos Reports show this rather clearly as does the work of Capers Jones and others.

The 2015 CHAOS Report, (updated/published yearly since 1994), is a snapshot of the state of the software development industry. This year the report studied 50,000 projects around the world, from tiny enhancements to massive systems re-engineering implementations.

The results indicate there is still much work to be done to achieve successful outcomes from software development projects. The table below recaps project outcomes over past 5 years with Successful projects defined as on time, on budget with a satisfactory result. Challenged projects are projects developed, installed, and used but considerably over estimated cost and/or schedule, and/or delivered with less than expected functionality. Failed projects deliver systems that failed in all/several of the above areas and were not implemented or taken down within several months.

2011 2012 2013 2014 2015
Successful 29% 27% 31% 28% 29%
Challenged 49% 56% 50% 55% 52%
Failed 22% 17% 19% 17% 19%

Also, a trend from previous reports that continued in the latest survey is how smaller projects have a much higher likelihood of success than larger ones.

Equally telling were the results for cost and time overruns, and failure of the applications to provide expected features.

Cost Overruns

For combined challenged or impaired projects, ~1/3 experienced cost overruns of 150 to 200%. The average across all companies is 189% of the original cost estimate; that’s an average cost overrun of 178% for large companies, 182% for medium companies, 214% for small companies.

Cost Overruns % of Responses
Under 20% 15.5%
21-50% 31.5%
51-100% 29.6%
101-200% 10.2%
201-400% 8.8%
Over 400% 4.4%

Time Overruns

For the same combined challenged or impaired projects, over 1/3 also experienced time overruns of 200 to 300%. The average overrun is 222% of original time estimate. For large companies, average is 230%; for medium companies, average is 202%; for small companies, average is 239%.

Cost Overruns % of Responses
Under 20% 13.9%
21-50% 18.3%
51-100% 20.0%
101-200% 35.5%
201-400% 11.2%
Over 400% 1.1%

Content Deficiencies

For challenged projects, over 1/4 were completed with only 25% to 49% of originally-specified features/functions. On average, only 61% of originally-specified features and functions were delivered. Large companies have only 42% of features/functions in the end product; medium companies, 65%; small companies, 74%.

% of Features / Functions % of Responses
Less than 25% 4.6%
25-49% 27.2%
50-74% 21.8%
75-99% 39.1%
100% 7.3%