A McKinsey & Company and University of Oxford study of 4500 large-scale (budgets exceeding $15 million) IT projects found that these projects ran 45 percent over-budget and 7 percent overtime, delivering 56 percent less value than anticipated. That is a whole lot less than these organizations were banking on! Many opt to pull the plug on projects (IT or otherwise) that are not going to deliver sufficient value in exchange for the investment of time and resources. What factors play into the decision to either recover an at-risk project or abandon it? How do you know when to hold ‘em and know when to fold ‘em?

The answer isn’t always easy. It requires a business case or analysis to be developed that will look at financial and nonfinancial components, which re-confirms that the project, its deliverables, its end state and outcomes are still aligned with the enterprise’s goals and objectives. It comes down to this:

• Does this project add value?
• Does it provide us a unique competitive advantage?
• Does it increase client satisfaction or knowledge of the customer?
• Does it open new markets, stabilize operations, create new revenue streams, or reduce financial or operating risks?

And does it do this better, faster, and more effectively than another project in the portfolio? If we revive it, what are the modified goals or strategic benefits? And how do those compare against other projects, which may have a higher rate of return now? There may be a better route to get where you need to go.

We also have to consider the expectations of the key stakeholders. If the project is client facing, for instance, what are the expectations of the client? Are they still looking for whatever it is we’re supposed to deliver to them? The expectations of vendors, auditors, business units, and the project team have to be considered before a final decision is made.

We tend to think that these decisions are made on clear, non-emotional, data-driven analysis. In many cases, though, it is just the opposite. What are the risks from a personal and political perspective? Failed projects or poor implementation ends many a career, more so than cutting one’s losses and abandoning a project. The reasons why projects are ended are often buried below the surface, based on these types of personal factors rather than evaluative criteria. And that’s just part of the game as well, just not one that will make it into the reports.

Peter Drucker had an elegant phrase for all this: purposeful abandonment. “The first step in a growth policy is not to decide where and how to grow. It is to decide what to abandon. In order to grow, a business must have a systematic policy to get rid of the outgrown, the obsolete, the unproductive.” If your project meets those criteria, purposeful abandonment may be the best way to move forward.