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Most outsourced IT projects overrunning financially, report concludes
A majority of public sector IT projects are suffering from significant cost overruns as a result of the way in which work is being outsourced, a new report has stated.
According to the European Services Strategy Unit (ESSU), 105 projects currently have overruns of around $9 billion, with an average overrun of around 30.5 per cent of the original estimated cost.
Furthermore, some 57 per cent of outsourced IT projects have now gone over budget, while 30 per cent have now ultimately been terminated.
Commenting on the findings, Dexter Whifield, the author's report stated that the scope of the findings is 'shocking'.
"The remedies do not lie in tinkering with the procurement process but with root and branch change in the modernisation of public services."
"The government's commitment to commissioning and contestability does not address any of the fundamental causes and will only make matters worse for ICT projects in the next decade."
Over-ambition, a lack of design and development prior to procurement and pressures for efficiency savings overtaking the ability to deliver IT solutions were all cited as reasons behind the overruns, while the technical complexity of many IT projects is also often underestimates, the ESSU believes.
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