McKinsey-Oxford 2012: Large IT Projects Run 45% Over Budget
The most-cited number in IT project performance. We give the source URL, sample size, definition of "large", and the full headline findings so you can quote it accurately.
What did the McKinsey-Oxford IT projects study find?
The McKinsey-Oxford 2012 study analysed more than 5,400 large IT projects (those with initial budgets above $15 million) and found they run 45% over budget and 7% over time, while delivering 56% less value than predicted. Every additional year of project duration adds roughly 15% to the cost overrun, and 17% of large IT projects go so badly they threaten the very existence of the company. Published October 2012 by Michael Bloch, Sven Blumberg and Jurgen Laartz for McKinsey's Business Technology Office.
What "large" means in this study
The McKinsey-Oxford study defined a large IT project as one with an initial budget greater than 15 million US dollars. Projects came from public and private sectors, across geographies, drawn from a McKinsey project database supplemented by Oxford Said Business School data.
The study explicitly excluded small in-house IT work (anything sub-15 million) because those projects have very different governance and risk profiles. Large IT projects, by contrast, tend to have multiple vendors, long timelines, regulatory complexity, and political stakes: the exact conditions that produce overruns.
The full headline findings
| Finding | Value |
|---|---|
| Average cost overrun | 45% |
| Average schedule overrun | 7% |
| Average value shortfall vs predicted | 56% less |
| Cost-overrun increase per additional year of project duration | +15% |
| Share that go so badly they threaten the company's existence | 17% |
The black-swan finding is the most concerning in the dataset: 17% of large IT projects go so badly that they threaten the very existence of the company. In the companion academic study (Flyvbjerg and Budzier, Harvard Business Review 2011, 1,471 projects), one in six projects was a black swan, with a cost overrun of 200% on average and a schedule overrun of almost 70%. Most large IT projects slip; a meaningful minority become outright disasters.
How to cite
Source URL: mckinsey.com (delivering large-scale IT projects)
Related references on this site
Frequently Asked Questions
What did the McKinsey large IT projects study actually find?
McKinsey and the University of Oxford analysed 5,400 large IT projects (initial budgets above $15 million) and found that on average they ran 45% over budget and 7% over time, while delivering 56% less value than predicted. The study also found that every additional year of project duration increases the cost overrun by an average of 15%.
When was the McKinsey IT projects study published?
October 2012. The original article is titled 'Delivering large-scale IT projects on time, on budget, and on value' and was authored by Michael Bloch, Sven Blumberg and Jurgen Laartz for McKinsey's Business Technology Office.
Is this McKinsey study still relevant in 2026?
The headline percentages remain widely cited because no equivalent large-sample academic replication has been published since. McKinsey has published shorter follow-ups (2020, 2023) that reaffirm the direction but with smaller samples. For citation purposes, the 2012 study remains the canonical reference for large IT project performance.