SESSION 7 - Why software projects escalate

Question 1

Whats the article about?

Answer 1

• reported statistics: one in four IS projects end in failure
  Runaway systems: software projects that go wildly over budget or drag on long past originally scheduled completion date
  Escalation of commitment to failing course of action: behaviour underlying runaway systems

Question 2

What are escalation, negative project status, mum effect and deaf effect?

Answer 2

Escalation: continued commitment to previously chosen course of action in spite of negative feedback concerning viability of course of action
Negative project status: significant performance problems in one or more of following areas: cost, schedule, functionality, quality; may or may not be invisible; central to escalation
Mum effect: whenever negative project status is present but not available to those in position to terminate or redirect project – individuals in orga conceal negative info from superiors
Deaf effect: whenever managers

Question 3

What are the four theories of escalation?

Answer 3

1. Self justification
2. Prospect
3. Agency
4. Approach-avoidance

Question 4

What are the results of the study?

Answer 4

• frequency: 30-40% of all IT projects involve some degree of project escalation
  Duration of escalation: refers to how long projects are allowed to continue after point at which IS auditor believes they should have been terminated or redirected
• duration: average escalation time was 21 months with half of projects escalating for 15 or more months
  –> escalation is frequently and commonly occurring problem

Question 5

What is the sunk cost effect & the completion effect?

Answer 5

Sunk cost effect: push on individual due to past behaviour
Completion effect: pull on individual due to potential future benefit

Question 6

What are implications for practice?

Answer 6

• managers should be aware that incidence of project escalation is relatively high & that its outcomes are markedly worse than non-escalated projects  models developed in study help avoid it
  1) managers should implement early warning signs aimed at detecting escalation
  2) should define termination conditions at outset of project
  3) should embrace one or more models presented and tailor it to own environment