A third of IT projects carried out in the private sector runs over budget, according to a survey.
One in three projects implemented each year ends up with an overspend of between 10 and 20 percent on the original budget. And one in four projects costs 50 percent more than it was expected to, according to a survey of 100 chief information officers.
The survey also found the typical large company is running 29 projects at any one time.
According to the research, sponsored by software management company CA, the main reasons for overspending include poor forecasting, increases in project scope, and issues of interdependencies and conflicts between multiple projects.
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It said this isn't helped by the lack of visibility and control chief information officers have over their project portfolios — 39 percent of IT directors do not have clear visibility of projects and so do not know when they are close to running over budget.
CA said the survey shows chief information officers are still principally being judged on whether they deliver within budget rather than whether they deliver strategic value to the business.
Staffing is also an issue, with highly skilled workers being assigned tasks off-the-cuff rather than being strategically placed where they would be most effective, according to the survey.
Talkback
Without clear visbility into the complex projects that IT are faced with today, it is little wonder that many tech projects exceed their budget. Having the right portfolio management tools and processes in place is vital, both in determining how well a project is running, but also in assessing whether the project should be undertaken in the first place. And while Project Portfolio Management (PPM) tools are a critical part of IT's ability to manage itself, the fact that the applications being developed are poorly understood in many cases, or rely on the availability of highly-prized subject matter experts, means that many project estimates are doomed from the start anyway.
Application Portfolio Management (APM) technology and processes bring greatly increased levels of understanding, in terms of application complexity, composition and business value, so that IT projects can be started with a greater certainty that they will deliver value to the business, and then go on to be delivered in accelerated time-scales, through the increased insight they provide to the development staff who must identify, locate and change all the relevant programs that fall within the project request.