1 in 3 IT projects fail to deliver on promise

The failure of information technology (IT) projects does not perturb companies, it appears. Rather, they consider it a norm with one in three companies' IT projects failing to perform up to expectations. Despite these worrying levels of failure to deliver, 43 per cent of the organisations surveyed said their business managers and boards accept the problems as the norm, revealed new Tata Consultancy Services (TCS) research. What's more, 69 per cent of the respondents said their managers and boards continued to provide the necessary financial support for these projects.

Common problems cited include time overrun (62 per cent), budget (49 per cent) and higher than expected maintenance costs (47 per cent). Moreover, one in four companies said they find business users are reluctant to adopt new systems. The findings are disturbing since of the estimated $1 trillion that the industry spends on IT every year, around 70 per cent is spent on keeping the systems running while 20 per cent is spent on new systems.

Following the research findings, TCS is urging businesses to re-think their IT services and outsourcing strategies. Organisations need to work with partners that can explain the value of their work at a Board level and provide key performance indicators (KPIs) to show the benefit of the investments made.

N Chandrasekaran, executive director and chief operating officer, TCS, said, "Studies of the subject have shown great variance of results, no clear measurement methodologies, and a lack of process. As a result, customers have built up expectations and a history of negative perception regarding the level of IT failure.