Large technology-led transformation programs are important for creating business value and building strategic capabilities across industries. With many organizations spending around 50 percent of their IT budget on application development, the ability to execute software programs faster and at lower cost is essential to success for many transformation projects. However, the quality of execution leaves much to be desired. A joint study by McKinsey and Oxford Uni­versity found that large software projects on average run 66 percent over budget and 33 percent over schedule; as many as 17 percent of projects go so badly that they can threaten the very existence of the company.

Some large-scale application-development projects are particularly challenging because of their complexity and high degree of interdependency among work streams. This category includes development of systems for telecommunications billing, insurance claims, tax payments, and core retail-banking platforms. These projects demand close coordination due to frequent refinements to the original user requirements.

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