Summary of the Chaos Report

Summary of the CHAOS Report

The following excerpt was taken from the beginning of The Standish Group Report.

"The Roman bridges of antiquity were very inefficient structures. By modern standards, they used too much stone, and as a result, far too much labor to build. Over the years we have learned to build bridges more efficiently, using fewer materials and less labor to perform the same task. "

Tom Clancy (The Sum of All Fears)

Alfred Spector, president of Transarc Corporation, first introduced the Standish Group Report CHAOS in 1986. The basic idea for the report was that bridge projects have a tradition have being built on-time, on-budget, and not falling down. In contrast, software projects rarely come in on-time or on-budget and often do not work. Mr. Spector wanted to explore the characterics of each of those types of projects to understand why bridge projects would have such a high success rate than bridges.

This introduction of this report explains that bridges are successful because of the extreme detail of design. The design is basically frozen and cannot be altered. The report also notes that, if a bridge project fails, the project is thoroughly investigated and a report is written on the reasons for failure.

Even though bridges have 3,000 years of experience of software projects, software projects shouldn't have such a high failure record. Software projects do have a history of failing because when a software project does fail, it is not investigated and no report is created. Many times excuses are made the entire project is covered up. Therfore no lessons are learned and mistakes are made over and over again.

The Standish Group found it important to focus on these three identifiers: the scope of software project failures, the major factors that cause software projects to fail, and the key ingredients that can reduce project failures. Once these three things were identified the report would be able to act as a resource to prevent future mistakes form being made.

The report points out that companies in the United States spends more that $250 billion each year on IT software projects and that a great many of those projects fail. The report points out that "we can no longer imitate the three monkeys - hear no failures, see no failures, speak no failures." (Standish 1) The Standish groups

Research states that 31.1% of all projects will be cancelled before they are completed. The report continues that 52.7% of projects will cost 189% of their original costs. The report uses the city of Denver as an example. Because the city can't produce reliable software to handle baggage at the Denver airport, the city is losing $1.1 million per day. The report states that only 16.2% of software projects are completed and only 9% are completed successfully.

The Standish Group wanted to be very thorough, but couldn't survey every company with MIS in the United States. The survey was based on four focus groups and different personal interview to provide qualitative data for the report: restarts, cost overruns, time overruns, content deficiencies. During the study, all IT projects were classified into three resolution types.

Resolution Type 1 (or project success) This resolution type indicated that the project was a complete success. The project finished on-time and on-budget with all deliverables as indicated at the beginning of the project.

Resolution Type 2 (or project challenged) This resolution type indicated that the project was completed, but did not meet all the necessary qualifications to be successful. A challenged project came in over-budget, over-time, or did meet the deliverables or quality as indicated at the beginning of the project.

Resolution Type 3 (or project impaired) This resolution type indicated that the project was cancelled at some point during its development.

The result of The Standish Group Report Chaos showed basic statistics of the failure record to be quite startling. Only 9% of projects are successful in large companies, 16.2% of projects are successful in medium companies, 28% of projects are successful in small companies. The largest percentage of all three sub-groups and its still only 28%. Here is the breakdown of the focus areas.

Restarts are one of the largest causes of cost and time overruns.Ninety-four