Increase in IT project failures because of Recession.

Written by Prasad Addagatla

Meridith Levinson in his article “”focuses on the current buzz word “recession” and its impact on the outcome of the projects. The reports of “The Standish Group” are stated in the article which clearly shows how bad the situation of the IT industry is now.

The chairman of the Standish Group Mr.Jim Johnson states that the IT projects success rates increased from 1994 to 2000 and then dropped down for the next two years and got up until 2006. According to a Boston based firm, who conducted a survey on 400 IT firms confirms that there is increase in project failure rates in the last couple of years and only 32 percent of the projects are successful, 44 percent are challenged and the remaining are failures. These failures are due to only one factor, the fear factor of the present economy called “recession” which began in December 2007.

The projects are “cancelled” a lot in these days when compared to earlier due to the current state of the economy. There are several reasons for this which may be related to limited or insufficient funds and in last two years due to the recession many of the projects are forced to be cancelled. The firing of the employees in the IT firms is causing project managers to take a lot of burden on them by which they don’t have enough time to spend on the project which in turn may result in project failure. The longer one take to complete the project the most probable is the case of project failure. The “business value” of a project cannot be expected if the project is a failure.

Levinson, M. (2009, June 18). Recession Causes Rising IT Project Failure Rates. Retrieved from http://www.cio.com/article/495306/Recession_Causes_Rising_IT_Project_Failure_Rates_