Understanding the Nature and Extent of IS Project Escalation (Keil & Mann, 1997)


Keil, Mark; Mann, Joan: Understanding the Nature and Extent of IS Project Escalation – Results from a Survey of IS Audit and Control Professionals; in: Proceedings of The Thirtieth Annual Hawaii International Conference on System Sciences, 1997.

"Many runaway IS projects represent what can be described as continued commitment to a failing course of action, or "escalation" as it is called in management literature."  Keil & Mann argue that escalation of projects can be explained with four different factors – (1) project factors, (2) social factors, (3) psychological factors, and (4) organisational factors.

  1. Project Factors – cost & benefits, duration of the project
  2. Social Factors – rivalry between projects, need for external justification, social norms
  3. Organisational Factors – structural and political environment of the project
  4. Psychological Factors – managers previous experience, sunk-cost effects, self-justification

In 1995 Keil & Mann conducted a survey among IS-Auditors, among their most interesting findings are

  • 38.3% of all SW development projects show some level of escalation (Original question: ‚In your judgement, how many projects are escalated?‘).
  • When asked ‚From your last 5 projects how many escalated?‘ 19% of the auditors said none, 28% said 1, 20% said 2, 16% said 3, 10% said 4 and 8% said all 5.
  • Escalation of schedule 38% of projects 1-12 months, 36% 13-24 months, maximum in the sample was 21 years.
  • Average budget overrun of projects was 20%, when projects escalate average budget overrun is 158%.
  • 82% of all escalated projects run over their budget, whilst only 48% of all non-escalated projects run over their budget
  • Success rate of escalated projects is devastating – of all escalated projects 23% were completed successfully, 18% were abandoned, 5% were completed but never implemented, 23% were partially completed, 18% were unsuccessfully completed, and 8% were completed and then withdrawn.

Furthermore, Keil & Mann test for the reasons for escalation behaviour, based on their 4 factor concept.  They found the main reasons for project escalations were

  • Underestimation of time to completion
  • Lack of monitoring
  • Underestimation of resources
  • Underestimation of scope
  • Lack of control
  • Changing specifications
  • Inadequate planning

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