26 November 2002 More than half of businesses have suffered failed IT projects in the last 12 months, according to a worldwide survey of dozens of public companies by KPMG, the management consultancy.

Failed projects cost the surveyed businesses an average of £8 million (€12.6m), with the largest single failure costing an unnamed UK company £133 million (€209.9m).

The most common causes of failure were inadequate planning, poor project scope management and poor communication between the IT department and the rest of the business.

The study also found that fewer than one in five companies feel that delivering projects on time and within budget is their most important measurement of success. The revelation raises questions about the IT industry’s increasing focus on delivering cost-effective ‘solutions’, rather than more reliable products.

“In this economic climate, companies cannot afford to be losing money hand over fist on failed IT projects,” said Bryan Cruickshank, KPMG’s UK head of information risk management. “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.”

The survey will send fresh shockwaves through the embattled IT industry. If anything, however, many companies believe that KPMG’s finding that 56% of IT projects fail is underestimating the scale of the problem.

Certus, the UK IT director forum, believes that the failure rate is closer to 90%.

And a separate report published this week by the London Business School and Connect, an IT services company, found that failing technology is costing UK’s small-and-medium-sized-enterprises (SMEs) some £31 billion (€48.9bn) each year.

The report also claimed that each SME employee typically wastes more than 180 hours a year waiting for IT systems to be repaired.