Thursday, March 21, 2013

Five Aspects Why Major IT Projects are more likely to Fail than Other Business Initiatives

Every IT project is the business project!



Statistically, major IT projects are 20 times more likely to fail than other business initiatives, and the larger the project the (exponentially) much higher the risk. On one hand, it’s understandable, due to the complex nature of technology and rapidly change business dynamic; on the other hand, there’re many pitfalls which can be avoided if organizations can learn from other’s failures.





1.    Treat all IT Project the Same

IT projects are more likely to fail because organizations tend to treat all IT projects as the same and approach all of it the same way. There are a few typical IT projects:

1) Infrastructure and Application Refactoring (Purely technical ones that require no or minimum business interface except to make sure they don't get negatively impacted);
2) Product Development (churning out products and revisions out to the market as soon as possible based on market needs);
3) Regulatory Compliance, governance/risk management mechanism
4) Solutions Delivery (developing or finding a solution to solve a particular business problem for the organization or client).
Better Practice: There are different types of IT projects which require different project strategies, levels of executive sponsorship, constraint prioritization, project organization, risk acceptance, stakeholder engagements and PM maturity. Using the wrong combination of these factors with the wrong project type can usually lead to project failure:

2. Fail to Define Affordable Scope at Project Initiation

Scope change and lack of clarity on the requirements is another major pitfall. Fail to resist inappropriate scope change is the major factor. In a lot of cases, key stakeholders worsened the situation and project managers were not able to obtain support from steering committee. Business urgency is abused. When a change is requested, the IT leaders estimate the cost and schedule impact and asks the business to analyze the impact on the project ROI and then get approval for the additional funding. The CIO shouldn’t allow a scope change without the cost being approved before change work begins.

Better Practice: Produce high-quality business requirements from the start. Make sure your organization is aware of how dangerous if it is playing the “change request game” to fix initial poor requirements. 

3. People Factor: Lack of Executive Sponsor or Effective Communication

The human factor is critical as project success depends to a lesser degree on technical skills and more so on channels of communication. As old saying: If politics is allowed to affect the project, then the methodology just accommodates the environment. IT projects that do not have Board, C-Level commitments are like building a high-rise building without a solid foundation. 

Miscommunication: The business doesn't know IT's job, and IT doesn't know the business' job well enough to bridge the communications gap effectively. The likelihood of success is most directly related to how well this gap is bridged. The projects that tend to fail the most are the ones where clear communication is missing. Resistance to change is instinctual and has brought down many a well-planned project. 

Better Practice: Plan sufficient project communication and training effort. Clear communication between all parties is key, Clear communication by either having a technology committee or board is a key piece of the puzzle and including key people from both sides will make all the difference of a successful project or a failed one. Having a clear challenge that everyone can review and understand makes for a clearer action that yields better results because everyone knows what the challenge is and what needs to be done to rectify it.

4. Lack of Effective Project Management

Many times, the failure of IT efforts are very predictable and they occur with regularity. IT projects are tough, complex and business partners seem to fully appreciate the benefit of the work - these are not to be used as an excuse for why IT has a higher failure rate. Perhaps what is missing is that an IT community doesn't seem to learn or learn fast enough; keep doing the same things over and over again, but expecting different results.

Lack of Appropriate Milestones: The value of a project in terms of returns deteriorates as the project progress when the assumptions / predictions made at the start are not evaluated at appropriate milestones. Given the volatile nature of technology and business eco-system, if these checks at every phase exits / entries against objectives are not done, the projects are bound to fail. The traditional method of comparing IT project results with the plan at the end of the project should be given up. This check needs to be done at intervals and as mentioned earlier, realign the efforts as per the project progress.

Better Practice:

  • Invest in top-notch project management resources. They will be your eyes and ears, especially during tough times. 
  • Methodology: Scrum/Agile and DevOps (the method to enhance communication, collaboration, integration between IT development with IT Operation), these emerging methodology need be widely adopted for iterative communication with team and customers, break-down the large projects into series of components to easily control the budget and progress., etc in order to better deliver value to business partners 
  • Set Proper Milestones. These checks are early warning systems which help in re-assessment of objectives and appropriate realignment. Keep IT projects as short as you can, both in time and scope. Don’t get into a large project unless it’s impossible to split it into smaller, more manageable ones
  • Project Status Report Weekly or Bi-Weekly: PM has to post a status report on the web answering the related status report question for all the company to see. The PM knows that accuracy is absolutely required! Status report questions such as, "Is the XYX project on schedule and on a budget to achieve the original requirements utilized to justify the investment”, if YES that's all, if NO, then fully explain. 

5. Not Leverage “Cloud” Choice

Traditional IT mentality is ‘Built from Scratch’ and ‘Built to Last’, however, to adapt to the accelerated business changes, Cloud-computing can leverage the change via reducing the length and complexity of the project in several ways. Implementation is quicker and more standardized, keeping budgets and timelines under control. The initial investment is lower since there are shared resources in the cloud, and typically comes from an operating budget vs. a capital budget. The ongoing Total Cost of Ownership is ultimately lower, and providing a faster ROI and greater success.

Better Practice: Cloud apps also add an ability to more accurately forecast costs both during implementation and beyond. This includes the ability to scale up or down depending on the requirements. Additionally, SAAS users are always on the most current version and functionality, eliminating the need for resources and budget for costly upgrades (which are usually delayed by years without the cloud). But more importantly, the latest and greatest functionality increases user satisfaction to allow a greater chance for success. Though, the cloud is not a panacea, may also create the new set of issues, therefore, strategic planning, design thinking and balancing the pros and cons are all very important. 

Every IT project is the business project, only through clear communication of all parties, with right methodologies, the latest technology leverage, and well-set milestones, the project can achieve better success rate, faster delivery, and customer satisfaction.  

Read more about IT Project: 

Five Reasons Why IT Project Fails

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