70% of IT and AI Projects Fail for Simple Reasons

Information technology investments are often treated as purely technical endeavors rather than organizational transformations that require changes in processes, culture, and human behavior, which possibly explains the gap between IT investments and observed results. 

source: McKinsey 

Some of the exceptions might be retail; communications and media, where productivity seems higher. For communications and media, technology often creates the platform for services, delivering a higher degree of observable value. 

source: McKinsey 

Still, many studies suggest that IT projects have a high failure rate overall. 

Study/Source	Year	Key Finding	Sample Size/Scope	Failure Rate/Metric
Standish Group CHAOS Report	2020	Only 31% of IT projects are successful (on time, on budget, with required features)	50,000+ projects across multiple industries	69% challenged or failed
McKinsey Global Institute	2012	Large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted	Analysis of 5,400 IT projects	17% of projects are "black swans" with cost overruns >200%
Harvard Business Review - Flyvbjerg & Budzier	2011	Average cost overrun for large IT projects is 27%, with one in six projects having cost overruns of 200%	Study of IT project performance patterns	16.7% massive overruns
PwC Global CEO Survey	2019	73% of CEOs believe their digital investments are not delivering expected returns	1,378 CEOs globally	73% not meeting ROI expectations
Deloitte Tech Trends	2021	70% of digital transformation initiatives fail to meet their goals	Survey of 1,000+ executives	70% failure to meet objectives
MIT Sloan - Brynjolfsson & Hitt	2003	IT productivity paradox: firms with higher IT spending don't always show proportional productivity gains	Longitudinal study of 527 large firms	Mixed correlation between IT spending and productivity
Gartner IT Spending Analysis	2019	85% of big data projects fail to deliver business value	Analysis of enterprise big data initiatives	85% failure rate
Accenture Technology Vision	2020	Only 37% of organizations successfully scale their digital pilots to enterprise-wide implementations	Survey of 4,000+ business and IT executives	63% fail to scale successfully
Boston Consulting Group	2018	70% of digital transformation efforts fall short of their goals	Analysis of transformation initiatives across industries	70% shortfall rate
KPMG Global CEO Outlook	2018	65% of CEOs question whether their technology investments create competitive advantage	Survey of 1,300 CEOs	65% uncertain about competitive value
IBM Institute for Business Value	2019	Organizations realize only 20% of anticipated benefits from AI investments	Study of AI implementation across enterprises	80% benefit shortfall
Forrester Research	2020	60% of customer experience technology investments fail to improve customer satisfaction scores	Analysis of CX technology implementations	60% fail to improve target metrics
EY Digital Transformation Study	2018	55% of digital transformation programs are abandoned before completion	Survey of 500+ executives across industries	55% abandonment rate
Capgemini Digital Transformation Institute	2017	Only 36% of organizations are digital transformation leaders achieving significant benefits	Study of 1,000+ organizations globally	64% are laggards or followers
McKinsey Technology Trends	2021	Cloud migration projects deliver only 65% of expected cost savings on average	Analysis of cloud transformation initiatives	35% savings shortfall