Although IT project governance has generally improved
over the past year, companies are having difficulty recognising
when a project has actually failed, accountancy firm KPMG says.
Egidio Zarrella, global partner in charge of information risk
management at KPMG and co-author of the Global IT Management Survey 2005, told ZDNet
Australia that even if a project comes in on time and on
budget, if people don't use the system - or find it is not what
they needed -- then companies need to recognise they have
According to the report, 49 percent of respondents said they
had experienced at least one project failure, which is a "modest"
improvement from 57 percent last year. Zarrella said however that
this improvement could be related to the actual definition of
success being altered.
"If all you think is, 'is it on time and on budget,' then you
are in trouble. Organisations have come in on time and on budget
but nobody uses the new system because the scope [of the project]
has been cut. You wouldn't believe how many times that has
happened," said Zarrella.
Zarrella said that companies are generally good with short
term and even when starting longer-term projects, but they tend
to run scared when the project encounters difficulties.
"We keep seeing that when a project goes off the rails
everybody runs for cover. That is not the point of project
management. Project management is there to say 'if it is going
off the rails, how do we pull it back? It is like steering a ship
-- you don't just say 'everybody jump off and let the ship smash
into the land'," said Zarrella.
Zarrella believes that one way companies could improve their
governance of IT projects is by creating an enterprise project
management office (EPMO) that directly reports to the board. The
EPMO should be experienced and mature enough to recognise when
certain projects are "going off the rails" and learn from any
mistakes that are made.
"The [EPMO] does not intervene on every project -- that is not
the point. They become part of the learning organisation. You
don't want them taking on the admin role, you want them to share
best practice and if they see a project going wrong they let
people know early on," said Zarrella.
Australian companies could also improve their standing in the
global project management community by learning from Europe and
the US and making bonus and wage structures better represent the
relative success of projects.
The report found that although 87 percent of executives in the
survey were responsible for delivering the potential benefits of
a project, only 23 percent had their compensation linked to the
"In Australia we are behind the pace of Europe and the US.
There, the project sponsor, the project director and others
should all tie their renumeration to successful completion of the
project," said Zarella.
Zarella concludes by recommending companies take a simple
approach to projects and ensure that the people in charge of
delivering the project's expected benefits are compensated
depending on the final result.
"You can buy thousands of books on benefit realisation or
project management but that is not what we are talking about. We
are talking about having a simple process where everybody knows
that they are accountable to make sure the system goes in," he