Aussies overspend on dud software

Millions wasted on project blowouts

At a time when CIOs are crying out for more funding, a report has revealed Australia's large organisations are bleeding software development projects at an average rate of $A86.7 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 per cent) are completed on time and on budget, while six per cent are cancelled altogether," said 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 $A199,033 per week, projects not completed within the set timeframes are causing companies major budget blowouts."

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 per cent of respondents reported good or very good levels of management buy-in, 65 per cent rated the quality of staff as good or very good, and 50 per cent felt the requirements definition was good or very good.

Carter agreed 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 said. "While more than two-thirds (69 per cent) 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 revealed those companies with advanced testing techniques and methods successfully completed 60 per cent 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 per cent of their projects.

Len Rust is publisher of The Rust Report.

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