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CHAOS Summary 2009
The 10 Laws of CHAOS
INTRODUCTION This year’s results show a decrease in project success rates, with 32% of all projects succeeding (delivered on time, on budget, with required features and functions); 44% were challenged (late, over budget, and/or with less than the required features and functions); and 24% failed (cancelled prior to completion or delivered and never used).These numbers represent a downtick in the success rates from the previous study, as well as a significant increase in the number of failures. The low point in the last five study periods was 2000, in which 28% of the projects were successful; that same year 23% failed. This year’s results represent the highest failure rate in over a decade. This year’s figures also show a substantial increase inboth cost and time overruns. Cost overruns increased from 47% in 2006 to 54% in 2008. Time overruns also have gone up, from 72% in 2006 to 79% in 2008. The high point in cost overruns was 2004 (84%). Features and functions developed stayed fairly steady, with 67% of specified requirements. . It was 66% in 1998, 70% in 2000, 67% in 2002, 64% in 2004, and 68% in 2006. One must be cautious with thisnumber because other Standish studies show only about 20% of the features and functions specified get used. Size continues to matter, with 61% of successful projects costing less than $750,000 in labor, and 19% of projects from $750,000 to $3 million were successful. Therefore, 80% of successful projects have labor costs under $3 million. Projects costing less than $750,000 in labor have a 71%chance they will be successful, while projects costing between $750,000 and $3 million have a 38% chance of being successful. Projects over $10 million only have a 2% chance of coming in on time and on budget, and represent a statistical zero in the success column. Please note we normalize the labor cost to take into account geographic differences in pay grades. The normalized cost is the average ofUnited States pay grades. In looking at some demographic areas, government had a slight improvement in failures, while banking organizations had major increases. Health care is the only other segment that improved. All other segments had increases in failure. Success also plummeted for most segments, whereas government and manufacturing were the only segments that improved, but only by a slightmargin. All in all the numbers looked grim. The following two pages outline the current CHAOS Success Factors within the Laws of CHAOS.

2000 to 2008 Project Resolution
60 50 40 30 20 10 0 2000 28% 23% 49% 2002 34% 15% 51% 2004 29% 18% 53% 2006 35% 19% 46% 2008 32% 24% 44%

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The 10 Laws of CHAOS
1. LAW OF THE TWO FACES
Users are both your best and worst enemy. The Law of the Two Faces supports the first CHAOS Success Factor, User Involvement, and states that users are both your best friend and worst enemy. Project managers need to cultivate an ecosystem for users and user groups that enables them toexplain the business process in detail to the IT organization, and those users should be trained to follow project management protocols. Successful projects include business-knowledgeable users with good communication skills. Challenged and failed projects typically include users with fair to poor communication skills. will have his or her own agenda that needs to be fulfilled by the project. Itonly stands to reason that 10 stakeholders will equal 10 individual goals. This is a major issue because these variable needs will often conflict.

4. LAW OF THE FIvE DEADLy SINS
You will encounter the Five Deadly Sins in all projects.

2. CHEETAH’S LAW
Swift decisions are typically better than long, drawn-out analysis.

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