Why major IT projects fail: A basic primer



analysis New South Wales’ outgoing auditor-general has published a brief whitepaper outlining the major causes of project failure in the state government and what can be done to address the issue, specifically calling out IT projects as having a bad track record in the area.

Peter Achterstraat was appointed auditor-general of NSW in September 2006, after 20 years in the Australian Taxation Office and most of a decade as the chief commissioner of state revenue for NSW. In the past seven years since he was appointed, NSW, like other states such as Queensland and Victoria, has suffered a number of major IT project problems, with the most high-profile likely being the previous Labor administration’s ill-fated Tcard public transport smartcard project. The project was originally intended to be in place for the Sydney Olympics in 2000, but failed disastrously and was eventually turfed in 2007.

In a brief whitepaper entitled ‘Why large public sector projects sometimes fail’ and published this week (PDF), Achterstraat wrote: “Governments at all levels across Australia spend hundreds of millions of dollars on infrastructure and IT projects. Some projects are very successful and have delivered positive outcomes. However, many projects fail. They are often over budget, late, not completed or completed with reduced outcomes. My audits of hundreds of NSW Government agencies and many major projects over the past seven years have identified a number of common issues.”

According to the auditor, the “common ailments” of failed projects could be grouped around three key themes: Poor governance, inadequate project management, and a lack of effective leadership.”

“A number of initiatives have been introduced in New South Wales recently which show promise,” Achterstraat wrote. “In relation to governance, NSW public sector agencies are now required to have a majority of ‘independent’ members on their Audit and Risk Committees. Many of these committees undertake serious continuous professional development to keep up-to-date with emerging issues. These independent members are increasingly challenging agency behaviours and are introducing a more rigorous approach to governance issues.”

“However,” he added, “some large infrastructure and IT projects would benefit from independent governance committees.”

In NSW, Victoria and in Queensland, state governments are increasingly putting in place more formal and ritualised structures by which major IT projects are assessed, approved and monitored. Often such groups take the form of councils of chief information officers, although increasingly departmental secretaries are also involved.

In relation to the second area, project management, Achterstraat wrote that project management expertise was being enhanced in the public sector, but more work needed to be done.

“Projects should not commence without a comprehensive cost/benefit analysis, and greater
use needs to be made of participative quality assurance, as well as post implementation reviews to ensure mistakes aren’t repeated in the future,” the auditor wrote. “All too often project teams are more interested in commencing the next project rather than reflecting on what went right and what went wrong with the project they recently completed.”

In terms of leadership, Achterstraat also had comments to make. In fact, this was the area which the auditor labelled as being the “biggest lever” to helping deliver projects.

The public servant wrote: “Chief executive officers confirm that the changing environment in the public sector requires new leadership skills. Today’s leaders need different communication skills to five years ago. They need different influencing skills, because many of their outcomes are reliant on people and organisations that they do not directly control. The ability to work with multiple stakeholders with conflicting and ambiguous agendas is increasingly required. It is pleasing that there is a clear recognition that enhanced leadership skills are needed and that the public sector is taking action to develop and grow these skills.”

“I have also detected an increasing appetite within the NSW public sector for officials to find out more about ‘the big picture’. More and more senior officials are attending functions to hear and discuss the views and visions of Directors General and other key agenda setters. Directors General and CEOs are increasingly making themselves available to discuss future directions, not just for their own agency but for the wider public sector and other interested stakeholders. This has to be a good thing as it enables policy officers and delivery organisations to discuss and debate issues before they commence implementation, and to eliminate the wasteful ‘just in case’ activities by tailoring and focusing their approaches.”

Achterstraat’s comments come as state governments around Australia are currently experiencing something of a crisis when it comes to their ability to deliver major IT projects.

In November 2011, for example, Victoria’s Ombudsman handed down one of the most damning assessments of public sector IT project governance in Australia’s history, noting total cost over-runs of $1.44 billion, extensive delays and a general failure to actually deliver on stated aims in 10 major IT projects carried out by the state over the past half-decade.

Similarly, an ICT audit of the Queensland Government published in June found that ninety percent of the state’s ICT systems are outdated and will require replacement within five years at a total cost of $7.4 billion, as Queensland continues to grapple with the catastrophic outcome of years of “chronic underfunding” into its dilapidated ICT infrastructure.

New South Wales has had less high-profile IT project failures than its two sister states, but there are still indications that the state has problems with IT project governance. In August, for example, a landmark report into the management of the NSW Public Sector commissioned by the state’s new Coalition Government described how dozens of overlapping and competing systems and services providers had created “chaos” when it comes to the state’s current IT shared services paradigm.

Given the current rate of failure of major ICT projects in Australia, the more wise words like this that we hear from auditors-general around the country, the better.

Image credit: Hans Gerwitz, Creative Commons


  1. They miss the most common problem though, that the project was a bad idea in the first case. It doesn’t matter how well you manage a project if it’s a square peg for a round hole.

    Many projects have fail written over them before they even start as the wrong people specify them. This is especially true of committee driven projects.

  2. So all you need for a good project is good leadership, good governance and good management.

    Captain Obvious.

  3. ” the ‘common ailments’ of failed projects could be grouped around three key themes: Poor governance, inadequate project management, and a lack of effective leadership.”

    In other news – water is reportedly wet – stay tuned.

  4. Read “The Mythical Man Month” by Fred Brooks. Nearly 40 years old, but still relevant.

  5. The projects I’ve witnessed failing have been because there is a set in stone agenda for running the project in the first place. The project then gets implemented based on that agenda and the project team doesn’t see the necessity to find out what the business actually wants and requires to operate. When the new solution is presented to the business it fails because it is built around false assumptions.

  6. What the report reveals is the inability of the IT industry to actually solve its own problems let alone any one elses’. I can dig up papers from 30-40 years ago that say almost the same thing. Based on the analysis reported above, what has been identified are merely symptoms. The word merely is not used lightly.

    What would be refreshing would be more analysis into why there is ineffective leadership, poor Governance and project management.

    Issues like a lack of accountability, corruption and fraud, a lack of internal expertise, management indifference and my favourite – a culture of diligently and wilfully supressing bad news – are more likely to be causes of the symptoms.

    I’m sure if DG’s were held personably accountable for IT failures the quality of governance and project management would rise instantly.

  7. I think the technology itself has a big part to play in these failures. Major vendors hardly ever retire anything, they just keep adding new ways to do things. 15 years ago the choice was between 2 kinds of table – now we have 7 choices of web technology, 6 interconnected application servers with another server to manage them all, and someone has to decide the optimal combination to deliver an adaptive mobile user experience. The complexity that has evolved is exceeding our ability to manage. It’s not just the public sector struggling with major ICT-enabled projects.

    The answer now and in future as we face the additional challenge of migrating to hybrid cloud (!) is to innovate around integration. This is the way to extend legacy system lifespans and deliver a modern multi-channel user experience in the shortest amount of time. Legacy system replacement is getting just too hard.

  8. IMHO, there are 3 key factors for a project to be successful:

    0. People – always the most important factor of pretty much everything. The right people with the right skills means your project is already 50% completed.
    1. Communication – everyone involved should be on the same page with a clear goal
    2. The ability to adapt to changes – IT is constantly evolving. If you don’t keep up your pace, you’re destined to be doomed.

    Unfortunately most large projects in public sector don’t have the above factors.

  9. In conjunction with the University of South Australia and with contribution from universities in Canada, South Africa and the USA, Experience Matters is investigating the barriers to and the benefits of effective information management. Many organisations have been consulted including Australian Rail Track Corporation, Bell Helicopter (USA), Boeing (USA), City of Cape Town, (South Africa), Lowes (USA), National Australia Bank and Wells Fargo (USA). Early observations from the project can be found at:


    There are many barriers, none of them are new and the biggest issue we have identified is to do with business, not information, governance. Project success should be measured on business, not technical, outcomes.

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