Almost one-third of IT projects are at risk of failure, representing a loss in turnover of £254.3bn, according to a survey from Axelos.
More than three-quarters (76%) of the 500 project leaders who were surveyed said the global economic climate has produced a more competitive environment, making projects tougher to deliver.
The survey, commissioned by Axelos, custodian of the Prince2 methodology, revealed that over the past 12 months, project budgets and timelines have become tighter, according to 74% of the project leaders.
A similar proportion said stakeholders now demand more value for less outlay, and almost half (48%) admitted that profit margins have shrunk.
More than half (55%) said they have to deal with evolutions in business practices, which make projects more complex. The change in business also increases risk for 58% of the project managers surveyed.
Half admitted they face challenges in finding the right people to resource their projects.
According to Axelos, the high incidence of project failure can be attributed less to external factors than to processes that are not robust enough, especially those relating to resourcing and skills.
The survey showed that 65% of project leaders are expected to deliver more projects in less time, but without the benefit of extra resource or ongoing skills training. Just 35% said employee numbers have increased, and only 12% of employers give project leaders budgets for continued learning.
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Peter Hepworth, chief executive of Axelos, said: “In recent years, we have seen many evolutions in business practice, which have, in turn, made many innovations possible. But as new practices emerge, they add a layer of complexity to project delivery, and organisations need to handle this with confidence if they are to deliver competitive advantage.
“In today’s complex environment, maybe everyone needs to know how to be a project manager, but many professionals haven’t yet learned the skills required to deliver high levels of project success.”
The survey found that project success is four times higher (56% compared with 14%) in organisations where the business strategy is clear to project leaders, and where the project management business unit is actively aligned with delivering the organisation’s vision, strategy and objectives.
Alignment with business goals and a greater appreciation of project management across the business are key to the successful delivery of projects, which contribute a total of £820.5bn to the turnover of British business.
Hepworth added: “Never has it been so important to build a solid foundation for project success. If we want to improve levels of productivity and project success, then we have to ensure that the people delivering projects have the necessary skills, knowledge and resource.”