Tech and Government - Procurement stats
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The document discusses challenges with IT project success and software procurement. It finds that 52% of projects are challenged and 19% are canceled, with only 29% successful. Project size, complexity, methodology, cost estimation, and team culture impact success. For large projects, cost is rarely estimated correctly and vendors often inflate costs or cut corners when overruns occur. While Agile works better for software, it is not seen as very compatible with typical procurement processes. The challenge is bringing good software development processes together with good procurement practices.
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Tech and Government - Procurement stats
- 1. Why collaborate on Software Procurement? A.K.A. What’s the problem?
- 2. IT Project success and failure 52% 19% 29% Challenged: Major cost/time/functionality issues Canceled before completion Success Source: The Chaos Report 2015
- 3. Success vs Failure: 5 Characteristics Size Complexity Methodology (eg Agile vs Waterfall) Cost Estimation Team culture
- 4. Results by project size 62% 21% 9% 6% 2%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Small Moderate Medium Large Grand Failure Success Source: The Chaos Report 2015
- 5. How often is price estimation right? 0% 10% 20% 30% 40% 50% 60% 70% Never Sometimes Usually Always Small Large Source: IITP Software and Procurement Survey (2014)
- 6. 0% 10% 20% 30% 40% 50% 60% 70% Never Sometimes Usually Always Large Source: IITP Software and Procurement Survey (2014) How often is price estimation right?
- 7. Vendor reaction to price overrun 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Do Nothing Renegotiate Cut corners Inflate costs Withdraw Small Large Source: IITP Software and Procurement Survey (2014)
- 8. Fact: We generally can’t predict the cost of [complex] software up front. Yet we still use cost as a criteria?
- 9. Source: The Chaos Manfesto 2012
- 10. Agile and NZ Procurement Compatibility 0% 10% 20% 30% 40% 50% 60% 70% 80% Not compatible Reasonably Very Source: Those with Agile experience from IITP Software and Procurement Survey (2014)
- 11. Fact: Agile works better for software. Agile succeeds 3x as often, but isn’t [perceived to be] very compatible with how we procure software.
- 12. So what’s the challenge? Bringing good software processes and good procurement together.
- 13. Thanks!
Editor's Notes
- DEFINE Chaos Report: Successful: Projects that don’t experience significant cost overruns, time overruns or loss of significant functionality; Failed: Projects that are discontinued (cancelled) before they are successfully implemented; Challenged: Projects that experience significant cost or time overruns or are implemented with significantly less functionality than intended. Note on Chaos Report Can you imagine if this was a roading project?
- Based on comprehensive research. Just for info – don’t go into detail.
- Size is a massive determinant in project failure…
- … and the larger and more complex projects lead to big issues in price estimation
- Large is scary
- So what do vendors do about it? Basically, bad outcomes for vendors and projects.
- A quick look at Agile
- Note that this is a PERCEPTION Not: 69% Very: 4% So, why not? Generalisation: Procurement focuses on defining a project up front, pricing it, then delivering to spec. Software simply doesn’t work that way.
- It’s NOT all about Agile of course. But if we want more successful projects, we need to deal with this.
- It’s NOT all about Agile of course. But if we want more successful projects, we need to deal with this.