3.2 Why IT-based projects fail

Research and experience alike continually cite a failure to measure risk. For instance, the OTR Group found that only 30% of companies surveyed in 1992 applied any risk analysis in the IT-investment and project-management processes. Depressingly, in two later surveys, Willcocks found that little formal risk analysis was identified amongst respondent companies, except that in financial calculation, e.g. discount rates ^[1]. In addition, in 1998 Willcocks and Lester found that in some organizations up to 40% of the IT projects realized no net benefits, however measured.

On a daily basis, the trade press reflects examples of failed projects. The following examples of outright project failure provide a basis for the consideration of risk and its contribution to on-going project assessment.

• The London Stock Exchange's TAURUS (Transfer and Automated Registration of Uncertified Stock) project was conceived in the early 1980s as the next automation step toward a paperless dealing and contractual system for shares. The main impetus for TAURUS came in 1987 with a crisis in settlements stemming from back office, mainly paper-based, support systems failing to keep track of the massive number of share dealings and related transactions. Many of the international banks were keen to automate as much as possible and as quickly as possible. Other parties, such as registrars who would be put out of business if share certificates were abandoned, fought against any further expansion of technology. Consequently, the Stock Exchange had to balance its international reputation while maintaining the support...