The News is in About IT Projects, And it is Not Good
According to a 2000 study by Gartner Inc. and TechRepublic Inc., close to 40 percent of IT projects fail or are abandoned before completion, and many of them lose millions of dollars before the plug is finally pulled. For example, in March, Nike CEO Philip Knight blamed a one-third drop in quarterly earnings on a $400 million supply-chain system that never worked properly. A few months earlier, Sobeys Inc., Canada's second-largest supermarket chain, stopped an $89 million SAP implementation after the system shut down for five days. Finally, Tri Valley Growers, a California cooperative, filed for bankruptcy last year largely due to a failed IT project.
Few Managers Recognize the Signs of Failure Until it is Too Late
Most project managers are afraid of being labeled as quitters or failures, while only 20 percent have a process for identifying and cancelling failed projects, according to a four-year survey of 672 senior IT and business managers conducted by the Center for Project Management.
A Well-Defined Way to Shut Down Projects is a Valuable and Useful Management Tool
Establishing a well-defined process sends a clear message to project managers and sponsors that problem projects should be jettisoned rather than toughed out before irreparable damage is done. The methodology shown on the following pages can be used by CIOs, steering committees, project sponsors and managers to determine the health of a project and, if necessary, the point at which to shut it down.
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This article was originally published on 09-01-2001