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McKinsey IT study: Why 70% of digitalization projects fail

Close the knowledge gap and leverage the latest AI features for automated workflows and intelligent analytics.

McKinsey IT study: Digitalization and project management
Project management & digitization
Nico Roepnack

Nico Röpnack · March 11, 2026 · 7 min read

Only 1 in 200 IT projects is truly successful. McKinsey analyzed 2,900 projects. The result is not a statistical outlier, but rather systemic failure that repeats itself with alarming regularity. And it is avoidable.

The challenge

2,900 IT projects analyzed.
The results are alarming.

McKinsey & Company examined IT projects across industries and regions. The findings are not outliers; they are the norm.

45 %

exceed the budget

Almost every second project exceeds the approved budget, in some cases significantly.

56 %

deliver less value

More than half of the projects deliver less benefit than originally promised.

17 %

become black swans

200 to 400 percent cost overrun. Potentially threatening the existence of medium-sized DACH companies.

Source: McKinsey Global Institute, analysis of 2,900+ IT projects

The cause

Not technology, but
lack of control

Three structural patterns occur in almost every failed project, regardless of industry and with alarming consistency.

Sample 01

Lack of real-time transparency

No project team works in the dark, but many management committees do. Status presentations show what someone wants to report, not what is really happening.

Sample 02

Inappropriate escalation culture

Problems are downplayed until they can no longer be minimized. In organizations that punish bad news, teams quickly learn to keep quiet.

Sample 03

Gate reviews without obligation

Gate reviews exist on paper. In practice, they are skipped or reduced to a ritual. Without binding criteria, a review is just another meeting.

1 of 200 IT projects meet all three success criteria simultaneously Source: McKinsey Global Institute

From practice

When the system fails,
even though it works

The McKinsey data sounds abstract. I am familiar with it from my own experience.

At GETRAG/MAGNA, I was responsible for a global capital investment program with €1.5 billion in CAPEX. My task was to establish the Global Launch Excellence Process, a gate review system that made series production launches controllable and comparable worldwide.

In February, we audited the plant in Bordeaux. The findings revealed significant weaknesses in the start-up preparations. Those responsible on site glossed over their status.

In June of the same year: OEM line shutdown.

The system was world class. People turned their traffic lights green because that's what the culture demanded.

Nico Röpnack, founder of Lighthouse Consultings GmbH

The solution

What sets successful projects
apart

Three levers that make the difference between the one percent and the rest.

real-time transparency

Everyone sees the same status.

Not slides prepared weekly, but a shared source of truth that shows the real project status at any time.

More on this →

gate review system

Mandatory criteria for each phase.

Clear deliverables, measurable readiness scores, and real decision-making authority at every review point. No project passes a gate because of the deadline, but because the requirements have been met.

More on this →

escalation culture

Identify problems early on.

Organizations in which problems become apparent early on share a common belief: reporting a problem protects the project. This is not achieved through appeals, but through consistent leadership.

More on this →

self-check

5 signs: Your project is at risk

1

The project manager always reports "green" in the meeting, and problems only appear in the email afterwards.

2

Status reports are painstakingly prepared a week before the meeting instead of being available at any time.

3

No one in the management team can spontaneously name which milestones are critical in the next four weeks.

4

Escalations always occur when corrections are already expensive, never early on when they would still be inexpensive.

5

The project dashboard shows where the project was, not where it is today.

Next step

How secure are your projects really?

Talk to us about structured project management, gate review processes, and the right tools for true transparency.

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McKinsey Global Institute, “Delivering large-scale IT projects on time, on budget, and on value” (2,900+ projects) · PMI Pulse of the Profession 2024

About the author

Nico Röpnack

CEO of Lighthouse Consultings | Member of the Forbes Business Council

Nico Röpnack has 20 years of operational experience in the manufacturing industry (including BMW, VOSS, and MAGNA). He is currently a Smartsheet Premier Solution Partner, a lecturer on digital transformation at DHBW, and a member of the Forbes Business Council.

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