The Chaos Report

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  • Topic: Software project management, Cost overrun, Project management
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The CHAOS Report (1994)
The Standish Group

Slides preparados por Miguel Mira da Silva com base no resumo do relatório disponível na Internet http://www.standishgroup.com/sample_research/chaos_1994_1.php The CHAOS report (1994) 1

Introduction
• Bridges are normally built on-time, on-dudget, and do not fall down. – Because the design in frozen

• Software never comes on-time or on-budget, and always breaks down – A frozen design does not accommodate changes in the business practices – 3,000 years of experience – Failures are covered up, ignored and/or rationalized • We keep making the same mistakes over and over again!

The CHAOS report (1994)

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Introduction
• Focus of this research
– Scope of software project failures – Major factors that cause software projects to fail – Key ingredients that can reduce project failures

• The US spends $250+ billion each year on softare
– Software development projects are in chaos – 31,1% of projects will be cancelled before they ever get completed

• Lost opportunity costs!
– The new Denver airport is costing the city $1.1 million per day (failure to produce software to handle baggage) The CHAOS report (1994) 3

Introduction
• The hard data!
– In 1995, the US will:
• Spend $81 billion in cancelled projects • Pay an additional $59 billion for projects that will be completed but will exceed their original time estimates • Many of these projects are mundane!

– Success side:
• Only 16,2% of the software development projects are completed on-time and on-budget - 9% in large companies • Projects completed have only 42% of the original requirements

– There are more failures now than just five years ago
• It’s not getting better!
The CHAOS report (1994) 4

Methodology
• Survey
– The respondents were IT executive managers
• Ñot business users!

– 365 respondents

• Projects were classified into 3 types:
– Type 1 “Success” – on-time, on-budget, all features as initially specified (16.2%) – Type 2 “Challenged” – completed but over-budget, over-time and fewer features than specified (52.7%) – Type 3 “Impaired” – the project was cancelled (31.1%)

The CHAOS report (1994)

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Failures Statistics
• Companies:
– Large: revenue > $500m
• Brisa: €600m (2004)

– Medium: $200m > revenue > $500m – Small: revenue < $200m • ANA aeroportos: €187m (2002)

• Large companies
– Only 9% were successful – 61.5% of all projects were “challenged” (type 2)

The CHAOS report (1994)

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Failures Statistics
• Restarts
– For every 100 projects there are 94 restarts!

• Cost Overruns (over budget)
– For type 2 and 3 projects almost a third experienced cost overruns of 150% to 200% • Money is spent on projects that fail!

• Time Overruns (over time)
– For type 2 and 3 projects over a third experienced time overruns of 200% to 300% • Time is spent on projects that fail!

The CHAOS report (1994)

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Failures Statistics
• Content Deficiencies
– For type 2 projects, only 61% of the original specifications were implemented • Money and time are spent on project that will not deliver!!!

• Currently
– The 365 companies surveyed have 3,682 projects under development – Only 12% (431 projects) are on-time and on-budget!

• Why projects fail?
The CHAOS report (1994) 8

Success/Failure Profile
• Why projects fail? • Project Success (Type 1) Factors
– – – – – – – User involvement – 15.9% Executive Management Support – 13.9% Clear Statement of Requirements – 13.0% …. Competent Staff – 7.2% … Hard Working, Focused Staff – 2.4% 9

The CHAOS report (1994)

Success/Failure Profile
• Project Challenged (Type 2) Factors
– – – – – – – Lack of User Input – 12.8% Incomplete Requirements – 12.3% Changing Requirements – 11.8% …. Technology Incompetence – 7.0% Lack of Resources – 6.4% ….

The CHAOS report (1994)

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Success/Failure Profile
• Project Impaired (Type 3) Factors
– – – – – – Incomplete Requirements – 13.1% Lack of User...
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