There was a New York Times article a few years ago (I have the
clipping; I'm pretty sure it was early 1998)that reported that of the
$240 billion in tech projects/initiatives that were  started in a
particular period, 40% were completely cancelled or abandoned. Are
there other studies or reports that reveal this sort of data or
information either by industry or on a case by case basis? Technology
is used only as an example and isn't the thrust; project abandonment
and cancellation is the subject I'm interested in.

Hi sailguy,


You’ve asked a great question, and fortunately, one that many other
people and organizations have asked before you – that is;  How many
projects get dropped or abandoned by their sponsors, never to be
finished?

Yes there are plenty of studies out there. The question is, which
numbers are believable and which are based on loose extrapolation or
mere guesses?

I am familiar enough with the field of project management to make a
reasonable assessment as to where the real data is.  Now, the
difficulty is that many of these reports are proprietary. That is the
actual data must be purchased. Fortunately, the big ones are widely
quoted so at lease some of the data is in the public domain.

The second difficulty is in the use of the term, “project failure.” 
In many cases the public reports do not differentiate between projects
that get abandoned and projects that are considered to be failures
because they exceeded budget or timeline or didn’t meet the sponsor’s
goals.

That said however, one landmark study (and its subsequent updates)
does meet all of the criteria we need in order to establish a project
failure rates due to abandonment for specific time frames, industries,
project sizes, and company sizes.

That is the 1994 study by the Standish Group International
http://www.standishgroup.com/default.php

Here is an overview of that 1994 study and some updated information as
well.


=====================================================
THE STANDISH GROUP INTERNATIONAL CHAOS REPORT
=====================================================

This report is considered to be a landmark study of IT project
failure. It is accepted by most experts to be a fair and accurate
study and has been cited world-wide


The Standish Group classifies projects into three resolution types:

SUCCESSFUL - The project is completed on time and on budget, with all
features and functions as originally specified.


CHALLENGED - The project is completed and operational, but over
budget, over the time estimated, and with fewer features and functions
than initially specified.


FAILED - The project is cancelled before completion.

=====================================
Key Findings of the 1994 Report 
=====================================

The Standish Group research shows that 31.1% of projects will be
canceled before they ever get completed.

Based on this research, The Standish Group estimates that in 1995
American companies and government agencies will spend $81 billion for
canceled software projects.

The Standish Group estimates that almost 80,000 projects were
cancelled in 1995. Risk is always a factor when pushing the technology
envelope, but many of these projects were as mundane as a drivers
license database, a new accounting package, or an order entry system.

=======================================================
UPDATE DATA FROM THE STANDISH GROUP CHAOS ’98 REPORT
========================================================

This article and summary of the Standish Group 1998 report was written
by Jim Johnson, chairman of The Standish Group International Inc.

Turning CHAOS into SUCCESS
http://www.softwaremag.com/archive/1999dec/Success.html


More information from the 1998 Report is available here:

CHAOS – A RECIPE FOR SUCCESS
http://www.standishgroup.com/sample_research/chaos1998.pdf



A Summary of the data (gleaned from the above websites) as it pertains
to cancelled projects is below ----

-------------------------------------------------------

FAILURE RATES of all projects by year   


1994     31% failed
1996     40% failed
1998     28% failed 

The cost of failed projects went down from $81 billion in 1995 to an
estimated $75 billion in 1998.

-----------------------------------------------------

SUCCESS RATES by project size - 

CHAOS research confirms that small projects are more likely to succeed
than large projects.

*see chart on website
http://www.softwaremag.com/archive/1999dec/Success.html


---------------------------------------------------------

SUCCESS RATE by Project Duration and Team Size -  

The smaller the team and shorter the duration of the project, the
greater the likelihood of success.

*see chart on website
http://www.softwaremag.com/archive/1999dec/Success.html


-----------------------------------------------------

SUCCESS RATES by industry

Retail Industry 59% 
Financial sector (32%), 
Manufacturing sector (27%), 
Government projects (18%). 

Of all industries, retail also had the fewest challenged projects
(28%) and failed projects (12%).

-------------------------------------------------

SUCCESS RATE by company size


Large - 9% 
Medium 16.2% 
Small - 28% 

The most projects, 37.1%, were impaired and subsequently canceled in
medium companies, compared to 29.5% in large companies and 21.6% in
small companies.

=============================
STANDISH CHAOS 2002 UPDATE 
===========================


“ Standish looked at 13,522 projects and determined that the failure
rate has dropped to 15 percent of all projects, less than half of the
31 percent project failure rate in 1994.That leaves 51 percent of all
projects as being what Standish calls “challenged,” which means they
have higher costs or took more time than anticipated but ultimately
were completed.”

SD TIMES - SOFTWARE PROJECT SUCCESS RATE CLIMBS
http://www.sdtimes.com/cols/industrywatch_070.htm

-----------------------------

Unfortunately, most data migration projects don't go as smoothly as
anticipated. According to The Standish Group, 74 percent of all IT
projects either overran or failed, resulting in almost $100 billion in
unexpected costs. Of the 15,000 data migration projects, as many as 88
percent will either overrun or fail.

Data Cleansing – A New Approach 
http://www.intelesoftech.com/casestudy.htm


-----------------------------------



Although the Chaos reports have been quoted extensively, in order to
get the full data for the updated 1998, 2000, and 2002 Standish Chaos
reports, you have to buy them.  If you are interested, here is the
website for ordering  —

THE STANDISH GROUP - REPORTS 
https://secure.standishgroup.com/reports/reports.php?rid=1


The 1994 Report and other sample Standish Reports are available free
here:

THE STANDISH GROUP – SAMPLE RESEARCH
http://www.standishgroup.com/sample_research/index.php



===================================
OTHER REPORTS
===================================


WHAT WENT WRONG – A KPMG REPORT


This KPMG Canada 1997 report , though widely cited, does not appear to
be available online any more. There is no reference to it on the KPMG
Canada website at all. It has been quoted however, so some stats are
available.

According to a KPMG study " What Went Wrong? Unsuccessful Information
Technology Projects" as high failure rate has cost the Canadian
economy. A survey of 100 projects was conducted over a broad spectrum
of Canadian public and private sector organizations has revealed a hit
failure rate. 30% exceeded schedule and more than 50% exceeded budget
by a substantial margin.

PM FORUM 
http://www.pmforum.org/library/case97.htm

FAILED PROJECTS 
http://www.basilica.co.uk/news/files/failed_projects.htm

The risk of positive thinking 
http://itmanagement.earthweb.com/cio/article.php/604251


--------------------------------

GARTNER GROUP
http://www4.gartner.com/Init

Again, oft quoted, but not available for free. 


“Gartner research director Wendy Close.… now expects the current 60
percent CRM project failure rate to jump to 75 percent next year.”

CRM ROLLOUTS - BACK TO THE DRAWING BOARD
http://www.cfoasia.com/archives/200212-04.htm


“David Clarke set the scene by quoting studies which suggested that
the IT project failure rate was getting worse rather than better: the
rate of total failure, with developments being abandoned, had grown
from 25% in 1994 to 40%. Research firm Gartner Group said this was
costing $140bn a year in western Europe.”

Time to get radical
http://www.bcs.org.uk/publicat/ebull/nov02/management.htm


However, the definition of failure here may not be what we are looking
for (though I can’t confirm this on the company’s site):

 “Gartner Group suggests that a definition for large-scale project
failure is going over allotted time or budget by 30 percent or more.”
http://www.executive.govt.nz/96-99/minister/williamson/stocktake/manage.htm


---------------------------------------------------

Organizational Project Audit Reports  
http://www.pmforum.org/library/projectreviews.htm#PUBLICPROJECTS
 
A list of significant organizational reviews of projects and project
management that provide insight into a particular industry,
organizational management of the corporate stream of projects. These
reviews provide analysis and comment on the practice of project
management and submit recommendations or courses of action open to
improve the systemic management of the stream of corporate projects.

-------------------------------

SUMMARY OF PROJECT FAILURE SURVEYS
http://www.it-cortex.com/Stat_Failure_Cause.htm
http://www.it-cortex.com/Stat_Failure_Rate.htm

The following surveys provide statistical data over the rate of
failure of IT projects.
 

The Robbins-Gioia Survey (2001)
http://www.robbinsgioia.com/ 
 
The Conference Board Survey (2001)
http://www.conference-board.org/publications/describe.cfm?id=465
 

The OASIG Survey (1995) 
“About 40% of development projects fail or are abandoned.”
http://www.scis.nova.edu/~whartman/725Ref/SWFailuresOASIG96.html

“A recent OASIG [20] study in the United Kingdom found that around 40%
of information technology systems developments failed or were
abandoned. Johnson [13] surveying 3,682 projects (involving change and
information technology) in 365 companies found that  31% were canceled
before completion.”
http://cq-pan.cqu.edu.au/david-jones/Publications/Papers_and_Books/webe99/




========================================
SOME SPECIFIC CASES
=========================================

MANAGEMENT OF LARGE PUBLIC PROJECTS – CANADA
http://www.cio-dpi.gc.ca/emf-cag/largeitproj/lrg-public-it-grnd-ti00_e.asp


“…in 1995, the Auditor General of Canada, as part of his annual review
of government, studied four large systems development projects, with a
combined value of $490 million, being undertaken by government
departments, and found that only one of the four was being managed in
a way that dealt effectively with the risks associated with the
project.
Management of Large Public Projects ..”


Report of the Canadian Auditor General to the House of Commons for
April and October 1997.


“On October 22, 1997 the Canadian Federal Government announced
termination of the contract to automate the Canadian income security
system After spending $ 365 million,with a current overrun of $80
million, the Canadian Federal Government ended the contract for one of
its largest computer projects rather than risk further delays and cost
overruns. The Project know as the Income Security Program Redesign is
a massive project, aimed at automating Canada's income security system
was a victim of so many changes that it couldn't meet its 1998
completion target and would have cost millions more to complete….”

-----------------------------------------------------------
NEW ZEALAND EXECUTIVE GOVERNMENT

IT management
3.1 Project successes and failures  
http://www.executive.govt.nz/96-99/minister/williamson/stocktake/manage.htm


Of the 174 major IT projects that were either current or initiated
over the last five years, 168 had been completed or were still in
progress. Three had been dropped and another three were on hold.

------------------------------------


So that should do it.

If anything I’ve provided to you isn’t clear, please feel free to ask
for a clarification and I’d be happy to explain further.

Thanks so much for your question.

-K~

search strategy –

I started with the terms:  project failure rate

Then, as I came across references to specific studies I searched for
them by name.

---

Request for Answer Clarification by sailguy-ga on 06 Feb 2003 17:13 PST

Thank you very much for your time and work, however I must apologize
for not making it more clear that technology is not the thrust of my
query (see question). Indeed, your answer covers only IT. I also
believe that when you think of project mangement or projects you think
of IT. That, of course, is an assumption based on your introduction
and subsequent research. My desire is to deconstruct the reasons, find
the root human cause, for failure of projects/initiatives/team
efforts/etc whether it is in the development of a new drug, the
building of a skyscraper, the launching of a new magazine, or the
addition of bathrooms in a mall. What is the human component that
dooms that project? My question here  hopes to uncover the data to
launch my quest.

---

Clarification of Answer by knowledge_seeker-ga on 07 Feb 2003 05:05 PST

Hi again sailguy,

I've read your request for clarification and I understand better what
you need -A broader range of projects.

In fact, I did come across a couple of other articles that covered
project failure in other industries (eg construction), but because
they didn't address projects that were actually abandoned, I didn't
include them here. Seems likes once someone decides to build, say a
bridge, they build it no matter what cost or time overruns they
encounter. (Notice we never see half-built bridges laying around :-) )

What I'll do today is go back through the literature and put together
more references that address project failure in other industries. By
the end of today I should have something for you.

Thank you for clarifying your question. I'll find you what you need. 

-K~

---

Clarification of Answer by knowledge_seeker-ga on 07 Feb 2003 15:07 PST

Hi again sailguy,

Ok, here is a wider range of project fields where projects have been
abandoned, cancelled or otherwise scrapped.  Once again, much of the
data is in proprietary databases, but I was able to find some good
solid numbers for you.


==========================
STATISTICS AND PROJECTIONS
==========================


Industrial Outlook for Project Spending in 2003 and Beyond  - IIR’s
results pertaining to the Petroleum Refining,  Chemical and
Pharmaceutical industries.
http://www.ecc-conference.org/2002/lewis_v3.pdf


This pdf slide presentation includes the following data ---

PROJECTS BEGUN IN 2002 -2003 VS PROJECTS ON-HOLD OR CANCELLED

Petroleum Refining Survey Results - 2002
15.7% cancelled =  $1.3 billion 

Petroleum Refining Survey Results – 2003 Projection
13.7% cancelled =  $1.3 billion

Chemical Processing Survey Results – 2002
15.3% cancelled - $2 billion

Chemical Processing Survey Results – 2003 Projection
2.9% cancelled =  $0.2 billion

Pharmaceutical & Biotech Survey Results – 2002
1.7% cancelled = $0.2 billion

Pharmaceutical & Biotech Survey Results – 2003 Projection
1.1% cancelled = $0.1 billion


All of the statistics quoted in the slide presentation came from
Industrial Information Resources Inc.

“Established in 1983, Industrial Information Resources Incorporated
(IIR) is a leading source for industrial market information covering
the industrial process, manufacturing and energy markets.”

Full reports can be purchased here: 

INDUSTRIAL INFO
http://www.industrialinfo.com/dbprodsnaov.jsp

============================
CONSTRUCTION PROJECTS 
============================

A report on this court case:

Amelco Electric v. City of Thousand Oaks, ___ Cal.4th ___, 2002 DJDAR
1285 (Cal. 2002).

Under abandonment theory, a contractor can show that parties abandoned
the contract and recover the reasonable value of its work.

Amelco proceeded to litigate abandonment and total cost at the same
time. A jury found that the city both had abandoned and breached the
contract, and awarded $2,134,586 on the abandonment count and an
identical $2,134,586 on the breach of contract count. The California
Supreme Court reversed, throwing out the abandonment claim and sending
the total cost claim back to the trial court for retrial on the issue
of damages.

COMMENT: Amelco and What It Means to Total Cost and Abandonment Claims
http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/March_11_2002/amelco.htm


Another report on the same case –

Abandonment of Contract: No Longer a Viable Claim Against a Public
Entity
April 10, 2002 
http://www.smrh.com/publications/pubview.cfm?pubID=172


---------------------------------------


BASIC CONSTRUCTION INDUSTRY STATISTICS
http://147.208.25.192/page.cfm?keyPageID=859


-------------------------------------------

CONSTRUCTION CONTRACTOR FAILURE

This is related in a round-about way.  The issue is the failure rate
of construction companies (that is NOT the failure to complete a
project, but the closure of the company). Apparently construction
firms have the second-highest failure rate of all industries. The
causes of these failures have been studied and fall into several
categories, but a fair proportion ( 36%  ) are due to “Performance
Issues.” That is –

“Performance issues… involve the adverse effects of inexperience that
are felt most sharply when a contractor expands too rapidly. Taking on
a project of unaccustomed scope, type, or complexity creates a steep
learning curve, requiring new subcontractor relationships, project
management techniques, or record-keeping systems.”

WHY CONTRACTORS FAIL
http://www.agc.org/Marketplace/sb_why_contractors_fail.asp


“The Dun & Bradstreet Corp.'s Business Failure Record reports that
more than 10,800 contractors failed in 1997, with liabilities of more
than $2 billion. Of these failures, more than 37 percent were
contractors who had been in business 10 years or longer.”

Secrets of a Surety
http://www.agc.org/Marketplace/secrets_of_surety.asp


Although I have nothing to confirm this, I doesn’t take too much of a
leap to consider that these failed firms have probably left a swath of
unfinished or failed projects in their wake.



=============================
POWER GENERATION PROJECTS 
=============================


2003 Industrial Outlook - United States Forecast -  Power*

New Capacity Cancellations and Delays

At least seven states have postponed or suspended plans to restructure
their electric utility industry due to concerns over the problems that
were discovered during California’s deregulation. … Over the past 12
months, in the state of California, XXX units representing XXX
megawatts of capacity, have been cancelled, and XXX units representing
XXX megawatts, have been placed on-hold due to stability in power
prices and litigation concerns of power producers.

*you have to pay to get the XXX’s filled in with real numbers. 

2003 Industrial Outlook - United States Forecast -  Power*
http://www.industrialinfo.com/outlook_2003/demo/2003fcus01.jsp

---------------------------------------


“According to one research group, about 18 percent of announced [power
plant] projects are defunct. In 2000, projects worth 30,909 megawatts
of capacity were cancelled. In 2001, cancellations had grown to 91,139
megawatts out of 503,780 megawatts of capacity announced that year.
With an estimated cost of $250 million per 500-megawatt facility, that
amounts to more than $45 billion in cancelled projects. The majority
of the cancellations were in projects planned for several years out
but not yet under construction.  Part of the reason for the rise in
cancellations can be traced to Enron…”

Rubbed Out  -  Utility Business, May 1, 2002
http://utilitybusiness.com/ar/power_rubbed/


-----------------------------------

7 Projects cancelled – see last page of this report

Generation Projects Completed in Texas Since 1995
http://www.puc.state.tx.us/electric/projects/25645/1213OM/app7_gentable2.doc


=============================
TRANSPORTATION PROJECTS 
=============================

Bob Kramer, also with the Philadelphia Office of the EPA, presented
examples from Birmingham, Alabama; Atlanta, Georgia; Charlotte, North
Carolina; and Provo, Utah where conformity lapses resulted in delayed
or abandoned projects. The most notorious, of course, is Atlanta
where, two years ago, the EPA moved to withhold hundreds of millions
of dollars in federal transportation funding and 61 projects were
delayed.

Delaware's Mobile Source Air Quality Dilemma
http://www.committeeof100.com/fyi_archives/fyi_09_00.html


==================================
SPECIFIC COMPANIES OR ORGANIZATIONS
CANCELLED PROJECTS LISTINGS
=================================


“Of 56 UConn 2000 projects, 33 are finished, 14 are in process, four
have yet to start, and five have been cancelled.”

STATUS OF UCONN 2000 AND 21ST CENTURY UCONN
http://www.cga.state.ct.us/2003/olrdata/ed/rpt/2003-R-0008.htm

------------------------------

 “…a total of 232 project applications received by July 1997 … Of
these 232 applications, a total of 98 were rejected, withdrawn or
cancelled. …

Of the 98 projects that did not proceed, a total of 41 were withdrawn
or cancelled, while 57 proposals were rejected. Of the 41 withdrawn or
cancelled projects, an explanation for the cancellation is provided
for only five projects. Most of these five projects were cancelled due
to the lack of support or participation of one group (industry or
employees). Unfortunately, no information has been maintained on the
remaining rejected, withdrawn or cancelled projects. As a result, we
do not know why projects were rejected. …

…projects were grouped into four main categories, as follows: 

projects involving conferences and seminars; 
research study projects; 
sectoral or multiple workplace change projects; and 
single workplace change projects.


HUMAN RESOURCES DEVELOPMENT – CANADA
Labour-Management Partnerships Program
http://www11.hrdc-drhc.gc.ca/pls/edd/LMPP_114005.htm


-------------------

At least four bills are pending in Congress to reform the U.S. Army
Corps of Engineers, which is under fire for a backlog of unfinished
construction projects totaling $52 billion and for several costly
projects that critics say are wasteful and damaging to the
environment.

River agency faces calls for reform
http://www.kypost.com/2002/jun/25/corps062502.html

--------------------

“The 20 projects cancelled or not started included 9 proposal reviews
and one financial review expected to be requested by VA program
officials that didn't materialize, 3 projects deferred to FY 1997 due
to other higher priority projects, and 7 projects cancelled or not
started to avoid duplication with other reviews or based on the
results of other reviews.”

II.  FISCAL YEAR 1996 ACCOMPLISHMENTS 
PROJECTS PLANNED AND ACTUAL RESULTS 
http://216.239.53.100/search?q=cache:7ySQ6vKE9IEC:www.va.gov/oig/53/opr-plan/FY97/97oppln2.wp+government+projects+cancelled&hl=en&ie=UTF-8

--------------------

City of Roswell 2000-01
TRANSPORTATION DEPARTMENT  ANNUAL REPORT

SAMPLE DATA 

Sidewalks Brookfield West – Cancelled for lack of support
Sidewalks Land O’Lakes – Cancelled for lack of support
Sidewalks Terramont S/D – Cancelled for lack of support

TRANSPORTATION DEPARTMENT  ANNUAL REPORT
http://www.roswellgov.com/docs/pdf/transportation/TransportationAR.pdf

--------------------

Many transportation projects are cancelled simply because the inflated
union wages required do not leave enough money in the budget to cover
other costs.

Governor’s Tax Plan Ignores Proven Ways to Pay for Transportation
Improvements Without Raising Taxes
http://www.washingtonpolicy.org/Transportation/PRGovernor'sPlan2001.html


=======================================
WORLD-WIDE ABANDONED CONSTRUCTION PROJECTS 
========================================


MALAYSIA

Apparently, because of the Asian economic crisis, Malaysia has
suffered a spate of abandoned construction projects over the past 10
years. There are many news articles discussing the issue.

National House Buyers Association, Malaysia [HBA]
List and details of abandoned construction projects by year 1991-2001
http://www.hba.org.my/Articles/Abandoned%20Projects/ap.htm



“There are 30 abandoned projects in the capital, he said, including a
five-storey residence belonging to Brunei's Sultan Hassanal Bolkiah….
A taskforce had been set up following the 1997 Asian financial crisis
because many abandoned projects have become a health hazard as well as
an eyesore, he said.”

Analysts expect no quick rebound to Malaysia's soft property market
http://quickstart.clari.net/qs_se/webnews/wed/cr/Qmalaysia-property.R5gE_CNO.html

--------------------

BANGKOK 

“More than 300 unfinished construction projects have been abandoned
around the capital. Mr Wicha estimated an investment of at least 10
billion baht would be required to complete all pending projects.”

Sell off unfinished buildings _ expert 
http://scoop.bangkokpost.co.th/bkkpost/2002/apr2002/bp20020401/news/01Apr2002_news10.html


------------------------------

MOSCOW

“In 1996, during a helicopter inspection flight across Moscow, Mayor
Yury Luzhkov saw many of the capital’s 681 unfinished construction
projects, most of which were government-sponsored schemes and some of
which dated back to the early 1970s. That ride gave impetus to a
building spree, and the city government completed 282 of the buildings
within the next four years. However, that still leaves about 400
projects sitting idle, some in highly desirable areas of the city.”

FROZEN IN TIME
http://www.therussiajournal.com/index.htm?obj=4268


*For many more like these, just do a Google search for:
“unfinished construction projects”


==================================================
JUST A LITTLE BIT MORE ON TECHNOLOGY PROJECTS (sorry!) 
===================================================

Capers Jones reports that the average canceled project in the U.S. is
about a year behind schedule and 200 percent of its expected budget by
the time it’s cancelled (Assessment and Control of Software Risks,
Englewood Cliffs, N.J.: Yourdon Press, 1994). Jones estimates that
work on cancelled projects makes up as much as 15 percent of total
U.S. software efforts, amounting to as much as $14 billion per year in
1993 dollars.
http://www.stevemcconnell.com/ieeesoftware/bp15.htm

[In 1998] Two of every five companies surveyed reported that they had
experienced delays in completing information technology projects
because of a lack of skilled workers; nearly one in five said that
they had actually cancelled projects because of the IT workforce
shortage.

MICROSOFT
http://www.microsoft.com/presspass/features/1998/11-30mcp.asp



=========================================
OTHER DATA SOURCES – FOR PURCHASE
=========================================

CONSTRUCTION JOURNAL 

Headquartered in Stuart, Florida, Construction Journal provides
Real-Time project information through the Internet.

We report projects in the following stages: 
Cancelled - Projects cancelled or postponed.

http://www.tcjrnl.com/?p=about

--------------------------------------

So, that should give you a good assortment of project types to work
from. I’m glad you gave me the opportunity to clarify my answer.

Thank you for your question –

-K~

Thank you.