IT project bleeding cash? Consider pulling the plug: a consultant offers some proven signs for determining if a technology project is foundering and might be better off being canceled, even at the expense of the outlays already made.

• Author: Zucchero, Joseph J.
• Position: Technology

It's that time of year, when you are working on next year's budgets. You finally get to the IT department, and you don't know what to do, because there's one project that is over budget--way over. Should the company continue to fund it, even though you suspect it is simply bleeding cash? And, if you decide to continue funding it, how can you be sure your company has the ability to contain it? Or, should you simply pull the plug and stop the bleeding?

This is far from an unusual choice. According to a recent survey by The Standish Group, 51 percent of IT projects are challenged and 15 percent fail outright. The last thing you want to tell the CEO (especially if your company is publicly traded) is, "We are going to take a multi-million dollar charge because of a failed IT project."

To determine whether or not you should pull the plug, you must first see if the project is out of control (or is about to get that way). There are several signs to look for.

The most obvious sign is that people keep coming back for more money. You need to ascertain if this is an anomaly or a trend. The project manager should have assigned a dollar value to each of the project's deliverables. How often do the actual dollars spent on associated deliverables exceed the planned budget? This should answer that anomaly or trend question--especially if the "overage" was not approved.

Another obvious sign is that deadlines are being missed. Again, you should look at the frequency to determine if missed deadlines are another anomaly or a trend.

The next two signs are actually related to things that should have been in place before the IT project started. The first is the project charter, also called the statement of work. This defining document of an IT project indicates things such as how the deliverables are defined and who has acceptance authority, roles and responsibilities for the extended project team and the scope of the work to be done; it should have been agreed on before the project was started. Ask the CIO for a copy. If there's no project charter, it is a sign that you probably have or will have a runaway project.

Next, ask to see the project plan and find out when was the last time it was updated. (It should be updated weekly.) If there is no plan at all, or the plan has not been updated, you probably have (or will have) a runaway project.

Also, tasks with large chunks of hours associated with them in the project plan represent a major danger sign. It is...