COST AND SCHEDULE CHALLENGES IN SOFTWARE DEVELOPMENT

For many years, international surveys have consistently reported that less than 30 percent of commercial software development projects are finished on time and within budget and satisfy the business requirements. The exact numbers are hard to discern and subject to much discussion and disagreement, because few surveys publish their definitions, methodologies, or raw data. However, there is widespread agreement that only a small percentage of projects deliver the required functionality, performance, and dependability within the original time and cost estimate.

Software project failure has been studied quite widely by governments, consultancy companies, academic groups, and learned societies. Two such studies are one published by the Standish Group and another by the British Computer Society (BCS). The Standish Group reported that 28 percent of projects succeeded, 23 percent were cancelled, and 49 percent were “challenged” (that is, overran significantly or delivered limited functionality).1 The BCS surveyed2 38 members of the BCS, the Association of Project Managers, and the Institute of Management, covering 1,027 projects in total. Of these, only 130, or 12.7 percent, were successful; of the successful projects, 2.3 percent were development projects, 18.2 percent maintenance projects, and 79.5 percent data conversion projects—yet development projects made up half the total projects surveyed. That means that of the more than 500 development projects included in the survey, only three were judged to have succeeded.

The surveys covered typical commercial applications, but applications with significant dependability demands (“dependable applications,” for short) show similar high rates of cancellation, overrun, and in-service failure. For example, the U.S. Department of Transportation’s Office of the Inspector General and the Government Accountability Office track the progress of all major FAA acquisition projects intended to modernize and add new capabilities to the National Airspace System. As of May 2005, of 16 major acquisition projects being tracked, 11 were over budget, with total cost growth greater than $5.6 billion; 9 had experienced schedule delays ranging from 2 to 12 years; and 2 had been deferred.3 Software is cited as the primary reason for these problems.

1

Robert L. Glass, 2005, “IT failure rates—70 percent or 10-15 percent?” IEEE Software 22(3):112.

2

Andrew Taylor, 2001, “IT projects sink or swim,” Based on author’s M.B.A. dissertation, BCS Review.

3

DOT, Office of the Inspector General, 2005, “Status of FAA’s major acquisitions: Cost growth and schedule delays continue to stall air traffic modernization,” Report Number AV-2005-061, May 26.



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