An Assessment Of The Causes Of Cost Overrun And Schedule Delay On An IT Project: The Case Of NBE Application Virtualization Project

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Addis Ababa University


The purpose of this study is to assess the causes of cost overruns and schedule delay on an IT project with particular emphasis to the Application Virtualization Project at NBE as it has encountered a staggering 148% cost overrun and 242% schedule delay. To address the two major issues of cost overrun and schedule delay, a case study research design was employed. The research used a mixed approach as both qualitative and quantitative data were collected and analyzed. Both primary and secondary source of data were used. Both close ended and open ended questions were included on the questionnaire while the interview was unstructured, these two were used as a primary source of data. Different texts, articles, journals and dissertations were used as a secondary source of data. The sampling technique that was applied for this study was a non-probability sampling technique, in particular purposive sampling. The sample size identified using the purposive sampling was 15, from whom data was gathered by distributing questionnaires. All 15 were filled and collected, in addition to the questionnaire 3 people were interviewed, the project manager and other 2 top level managers who are members of the steering committee. The data obtained through questionnaire has been analyzed quantitatively using descriptive statistics namely frequency and percentages through SPSS version 20. In addition, the data obtained using interviews has been analyzed qualitatively. The findings of research are that the major causes of schedule delay include poor schedule management, project complexity, additional work, scope change, design related mistakes and delayed decision making process, while the major causes of cost overrun are poor cost management, complexity of the project, new technology being involved, change in project scope, additional work and rework, incomplete requirements and design. In addition, the overall project management practice of the bank has been found to be ineffective and inadequate. As a result, some recommendations have been delivered under this study on what actions should be taken to tackle the two major problems of cost overrun and schedule delay



Cost overrun, Schedule delay, IT projects