More than half of the large companies involved in a recent survey have admitted to suffering a failed IT project in the past year, costing each of them as much as £8m.
Research conducted by KPMG among 134 listed companies in the UK, the US, Africa, Australia and Europe indicated that poor project management is largely to blame.
Respondents cited inadequate planning, poor scope management and insufficient communication between IT departments and the business as the most common reasons for failure.
In contrast, 98 per cent of organisations with strong and mature programme management functions reported an unblemished record for IT projects.
Bryan Cruickshank, UK head of information risk management at KPMG, criticised companies for failing to recognise strong project management as a key factor in IT project success.
"It's a pretty concerning picture," he said. "Not enough attention is given to what project management means.
"Training can lack a lot of practical insight. The skill of project management is knowing when and where to apply the techniques.
"Blind application of methodologies doesn't tend to work very well and it's certainly not something you can do straight out of university."
Two thirds of respondents admitted that their programme management was in need of improvement.
More than 80 per cent said that they used a home-grown methodology to manage their projects, and only 44 per cent measured project performance against established metrics.
And, although meeting business needs was cited as the most important factor in gauging a project's success, all too often this is at the expense of making sure that the project is completed on time and to budget, the report found.
Only nine per cent of organisations believed that delivering projects within budget was the most important measure of success, and only one in five said that delivering the project on time was their main driver.
"In this economic climate, companies cannot afford to be losing money hand over fist on failed projects," said Cruickshank.
"Without a robust business case, effective application of project standards and processes, and an appropriate level of attention to managing project risks, companies are heading for more failures."
But David Taylor, president of IT directors' forum Certus, warned that the KPMG figures were only the tip of the iceberg.
"Our figures suggest that nine out of 10 IT projects fail, and that doesn't include all the projects that are swept under the carpet," he said.
"Unless the business feels that IT projects belong to them they'll never get it right. Most IT departments are still held in very low esteem. They need to build personal relationships and be caught doing things right."
Meanwhile the National Computing Centre (NCC) is responding to appalling IT project failure rates with a series of best practice guidelines for IT programme management due out in March next year.
The NCC is working with the Dynamic System Development Method Consortium (DSDMC) to develop the guidelines.
"There are methodologies around, but they're obviously not working," said NCC marketing director Michael Dean.
"Current methodologies tend to be very restrictive, whereas the DSDMC says that you should aim to deliver 80 per cent of the project on time and fix the remaining 20 per cent when it's up and running."
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