Unfortunately, it is. Here are the details. Perhaps the most definitive work on enterprise IT project failures was done by the Standish Group in 2015 when they surveyed 50,000 companies. Overall, they found that 71% of all IT projects failed to deliver expected results on time and on budget—and these were major, not minor misses. This 70% failure rate has been confirmed and/or endorsed over the last decade by several industry experts such as Gartner, IDC, HBR, 4PM, Capterra, the IEEE and others.
Now, in the interest of fairness, 70% isn’t quite as bad as it appears. Not all failures are created equal. 50%, half, of IT projects just experience some “significant” level of failure—meaning they’re way (30 – 300%) over budget, way behind schedule or way under-deliver. In other words, the system (or a big piece thereof) never does what it was supposed to do or what you wished it did—it never lived up to its promise. Only 20%, 1 out of 5, are complete and utter disasters. Total failures. Smoking craters that leave management no recourse but to write everything off.
There’s more. If a project costs over $1 Million (our definition of a big or large IT project), the odds of failure jump by 50% over the expected failure rate for a project costing less than $350,000. That means the odds of a total failure for larger projects are 30%—roughly 1 out of 3. The odds of a significant failure rise to about 65%—almost 2 out of 3. The odds of success fall to roughly 5%—only 1 success out of 20 attempts. McKinsey & Company working in conjunction with Oxford University found that 17% of enterprise IT projects, 1 out of 6, go so badly, they threaten the very existence of the organization. And Gartner has said that when it comes to Big Data and AI projects the failure rate is an even more abysmal 85%—5 out of 6 never make it out of the lab. Again, these statistics have been widely vetted and endorsed by industry experts—which is why we’re very comfortable quoting the 1 out of 20 success rate.