Software Development Failures [Electronic resources] : Anatomy of Abandoned Projects نسخه متنی

chapters 4 and 5 we discussed the socioorganizational and sociotechnical factors, respectively, contributing to abandoned projects. In this chapter we focus on the contributions of the two main economic issues of cost overruns and schedule delays to project abandonment decisions. The first part of the discussion is based on analysis of the data from the Fortune 500 study, the details of which are presented in chapter 4.

The category of economic issues shown in table 4.10. The three primary issues, which fall under the economic-factor category from the factor analysis of the Fortune 500 study data, are escalating project costs and completion schedules, actual project expenditures and duration, and funds available to the project.

Software projects that are over cost and behind schedule always run the risk of eventual cancellation. However, the cost overruns and schedule delays should not be mistaken for the root causes of the project failure. In most instances the real problem may be socioorganizational and/or sociotechnical, the two contributing factors discussed in the preceding two chapters. Still, it is important for us to examine the basis of the economic issues involved in decisions to abandon projects because they provide valuable insights into the underlying problems that may have escaped the attention of project management, through either oversight or neglect.

Factor F1, dealing with escalating project costs and completion schedules, may in most instances mask a variety of unresolved and/or persistent problems associated with the project. For example, problems may be related to project goals and objectives that are somehow ambiguous or lacking consensus prior to the start of the development. Such problems may frequently manifest themselves in changing requirements on which the rest of the development may depend. Whenever such changes are uncontrolled or become excessive, they tend to drive up the original cost estimates and may also add to the time of completion. At other times, the estimates of costs and time of completion may be faulted because they were derived from an evolving and unstable project scope, due perhaps to some differing perspectives among the stakeholder groups. Thus, factor F1 may be partially explained by inadequate information or systems requirements prior to the beginning of the development. This finding was substantiated by the fact that the "project personnel [often underestimate] the IS requirements problem," as reported in Ewusi-Mensah and Przasnyski 1994, 197. We can, therefore, surmise that the root of the escalating costs and schedule delays contributing to project cancellation is the more fundamental problem of information or systems requirements failure.

Alternatively, where there are no problems with the project goals and objectives there may, however, still be problems associated with the design of the systems, which may not be uncovered until later in the implementation stage. The extra time and effort required to correct such chapter 5, I alluded to the design problems uncovered during the implementation stage—problems that eventually led to the demise of the project.

Factor F3 deals with "actual project expenditures and duration below estimates," on the other hand, and presents a different rationale for some abandoned projects. The analysis of the data "consistently showed that both the cost of the completed portion of the project and the time spent on the project at the time of abandonment were lower than the estimated values" (Ewusi-Mensah and Przasnyski 1994, 199). The negative factor loadings on some of the variables served to confirm that fact and led to the conclusion that "abandonment may not only be dictated by escalating project costs and time of completion schedules, but may in some cases be actually the consequence of other problems associated with the project" (p. 192). This is because the actual incurred cost and the expended time on some abandoned projects at the time of abandonment may actually be below the projected estimates.

Finally, factor F10 indicates "lack of funds" as the cause of the project's cancellation. As argued in Ewusi-Mensah and Przasnyski 1994. "It is obvious that once a project's funding is terminated, there is a high likelihood that the project may eventually be terminated. What is more interesting is determining the underlying causes for the ‘lack of funds’ leading to the project's eventual termination." It is suggested that perhaps the explanation resides with factors such as "escalating project cost and lengthening completion schedules" or with "loss of critical personnel and management changes associated with a project" (p. 195). The suspicion is that both of the above factors may be at the root of the "lack of funds" that may potentially lead to the project's termination. Thus merely stating that the project was terminated for "lack of funds" is insufficient to explain the project's cancellation. The underlying reasons why the project ran out of funds will provide a more meaningful explanation for why it was terminated. Organizations do not routinely embark on major software development projects without giving adequate consideration to the funding needs and schedule-completion estimates and the associated strategic and/or competitive benefits they expect to gain from the project's completion.