A real-estate group in the federal government cosponsored a data warehouse with the information technology

(IT) department. In the formal proposal written by IT, costs were estimated at $800,000, the project’s duration was estimated to be eight months, and the responsibility for funding was defined as the business unit’s. The IT department proceeded with the project before it even knew if the project had been accepted.

The project actually lasted two years because requirements gathering took nine months instead of one and a half, the planned user base grew from 200 to 2,500, and the approval process to buy technology for the project took a year. Three weeks before technical delivery, the IT director canceled the project. This failed endeavor cost the organization and taxpayers $2.5 million.

Questions

1. Why did this system fail?
2. Why would a company spend money and time on a project and then cancel it?
3. What could have been done to prevent this?