Cost Performance in Major Public IT Projects: A Cross-Country Comparison Between Denmark and Norway

Cost performance for major infrastructure projects continues to be challenging for countries and governments experiencing large cost overruns. Major public IT projects may be particularly vulnerable to cost overrun and combined with the increasing digitalization of the public sectors, this creates a challenging arena for countries and governments. This also applies to Denmark and Norway where major public IT projects have large differences in cost overruns. We investigated nine Danish and seven Norwegian major public IT projects of considerable size together with the national governance structures for major public IT projects in Denmark and Norway. The study shows a significant difference in cost overrun: Norway has an average of 8% while Denmark has 108%. The maximum cost overrun is 84% for Norwegian projects and 414% for Danish ones. The reasons for the results are analyzed and discussed and include, among other things, differences in governance structures and cost estimation methods. The results and analysis are relevant for policymaking, practice, and research, especially learning across countries.