Problem Statement

The CHAOS report(2023) submitted by The Standish Group indicates that:

31.1% of projects face termination during development. 52.7% encounter challenges, exceeding cost estimates by 189%, resulting in over-budget, delayed, and feature-reduced projects.

Only 16.2% succeed, completing on time and on budget with all specified features.

For large projects, these statistics worsen. McKinsey’s 2023 research shows 17% of IT projects pose a threat to a company’s existence.

BCG reports a $1.56 trillion loss in the US in 2023 due to operational failures from poor-quality software.

Project Example

Let’s illustrate the impact of the current IT project development trend with an example:

XYZ Company approached ABC IT with 5 business requirements (Features 1 to 5). In the initial business requirement engineering, ABC compromised Feature 5 due to various reasons like a lack of business understanding, urgency in sales closure, or inadequate capture of elements in the final SOW.

As the sales-centric SOW moved into development, non-business-centric project management led to delays, cost overruns, and the failure to develop Feature 4.

Assuming ABC lacks a full understanding of the actual required productivity, only Features 1 and 2 function as required, while Feature 3 fails to yield any productivity. Out of the 5 features, only two are developed as required by the business.