Early Warning Signs of it Project Failure: The Dominant Dozen

HE MASTERY OF RISK DISTINGUISHES modern times from the past: By understanding and measuring risks and their consequences, modern humans no longer perceive the future as a whim of the gods and thereby have been empowered to transform their world (Bernstein, 1996). Strangely, IT project management, despite the fact that it deals with “modern” technologies, is embarrassingly immature in the mastery of risks. We see similar recriminating data year after year reminding us that about 20 percent of IT projects are canceled before completion and less than a third are finished on time and within budget with expected functionality (Standish Group, 2004). And if we limit the discussion to larger and therefore riskier projects of 10,000 function points, the cancellation rate more than doubles (Jones, 1995, 2000). Obviously, effective risk management is needed to avoid troubled projects (Tiwana & Keil, 2004) and make aggressive risk taking possible (DeMarco & Lister, 2003). The postmortem examination of failed IT projects reveals that long before the failure there were significant symptoms or “early warning signs” of trouble. A warning sign is defined as an event or indication that predicts, cautions, or alerts one of possible or impending problems. Early warning signs (EWSs) provide an indication of manifesting risks and thereby an assessment of a project’s propensity to future difficulties and failure. Keil and Montealegre (2001) recommend that