At a time when chief information officers are crying out for more funding, a report has revealed Australia's large organisations are bleeding software development projects at an average rate of A$86.7 million (NZ$104.4 million) each year.
According to a survey commissioned by independent Australian software testing organisation, Planit, more than half of all Australian software projects run over time and over budget.
Planit, surveyed 131 large organisations in Australia, most of them corporations in the finance, insurance, and telecommunications sectors, plus government organisations. Analysis was conducted on both the total number of projects commenced by respondents, as well as their most important projects over the past two years.
"On average, companies start 38 projects annually, less than half of which (42%) are completed on time and on budget, while 6% are cancelled altogether," says Chris Carter, Planit's managing director, who is also the president of the Australian/New Zealand Testing Board (ANZTB) and secretary of the International Software Testing Qualifications Board (ISTQB).
"At an average cost of A$199,033 per week, projects not completed within the set timeframes are causing companies major budget blowouts," Carter says.
According to the Planit Testing Index, successful projects depend largely on management buy-in, quality staff, and well-defined requirements. Of those projects completed on-time and on-budget, 78% of respondents reported good or very good levels of management buy-in, 65% rated the quality of staff as good or very good, and 50% felt the requirements definition was good or very good.
Carter agrees that quality staff play a major factor in a project's success, but said that finding that staff is a real issue for companies as the strong economy and low unemployment rates combine to create a skills shortage.
"Organisations must invest large amounts of time and money into recruiting and retaining staff, or risk losing them to competitors," he says. "While more than two-thirds (69%) of project work for the surveyed organisations was carried out by in-house resources, the skills shortage is forcing companies to look at third parties as an alternative to employing staff on a full-time basis."
The study reveals companies with advanced testing techniques and methods successfully completed 60% of their projects. This starkly contrasts with those organisations which have no planned or documented testing process and undertake testing in an ad hoc way; the latter group reported successful completion of just 29% of their projects.
Len Rust is based in Australia and is the publisher of The Rust Report.