IT project failure can damage business overall capability and even brand reputation to serve end customers for the long term. Project failure is due to management, complexity and business buy-in (participation). Management covers the actual capability to manage a project by IT, complexity implies that IT projects are in reality a system project. More specifically, IT Project fail because 1) Project management by IT is weak 2) IT project are generally system projects; they cover multiple elements, the main problem is that IT effort is to get the individual elements to work but never to get the different elements to work well together 3). IT project to focus on capability and not effectiveness. Some even say: “The high rate of failures in IT projects is nearly entirely due to this clash in between CEOs and CIOs.” So, with the failure rate of IT projects so high, what should the CEO do about it?
CEO & Executive Sponsorship
The one of the most important things a CEO can do to help large projects gain success and value is to educate and support their executive sponsors. The executive sponsor is ultimately responsible for the success and failure of any project. Executive sponsor skills enable the person to lead and guide the project to a resolution as most executive sponsors are poorly skilled. There are many challenges to keeping a project on schedule and meeting the budget objectives, and many IT projects are in bad shape because the executive sponsor was the problem, not the CIO. That's a tough one if the CEO isn't involved. Most had to do with scope change that the business shouldn't have had the authority to approve because they altered the investment return authorized at the CEO level and the rest involved business support committed to the project, but not delivered
- C-class executives, to include CEOs, are business stakeholders - and need to pair effectively with CIOs. Sometimes the business side of the equation doesn't really understand the business requirements, in many cases, CEO can use their influence to help bring the two worlds (business & IT) together in closing divides, directing purpose, and achieving (true) results. IT projects are usually complex and require disciplined focus to ensure that the project stays on schedule and on the budget. When the CEO mandates project status in their staff meetings, projects stay on track. The CEO is looking for ongoing reassurance and confidence that organization’s projects, the organization’s monetary investment are in being effectively and efficiently managed. In many cases, projects fail due to scope-creep that is generally introduced by the business sponsor, or when escalations are brought to a Business Sponsor that is not timely addressed. By empowering the CIO, CEO will be able to apply the necessary pressure to the Business Sponsors to control scope and address escalations.
- Study Statistics and Best Practices: It is important for the CEO to understand that information system projects are going to fit into a project type with the highest risk. High-risk projects offer the greatest potential for adding significant strategic value to the organization. The latter ought to be justification enough for taking a personal interest and the former should give them a wider perspective on the measure of success. High-risk projects typically have multiple stakeholders, they also ought to anticipate far more "politics" by default, which means mismatched priorities, agendas, definitions of success and interpretations of requirements. A new study on failure where stakeholders believed 35% of the projects they sponsored would fail before they started because they knew that they didn't really know exactly what they wanted, and they assumed that people at their level in the organization and above would deliberately try to sabotage them. CEO plays a crucial role in mediating between the warring factions, making sure there is very detailed agreement on the scope, and managing change to the scope, are a good place to start.
- Toning the Culture: The 'Tone from the Top' is in line with the Risk Appetite for project success. The concept that the CEO was first offering help, not a punitive assessment was a real relief. However, most of IT project failures are related to change management, emotional maturity of management/leadership. Human nature and corporate politics, irrespective of the PM methodology, will almost always drive the team to work around the problem rather than dealing with it head on. No one wants to yell out "I have a problem", all they're doing with this approach is taking that decision off the table. Therefore, CEOs should have insight into root causes of problems, radically fixing the “Un-Professionalism” or low-mature attitude to the project. An effective CEO also stands on CIO side, empowers CIO to overcome barriers, have leadership team co-share the blame or credit, as most of large IT projects are cross-functional effort, rather than just IT responsibilities.
Typically, most failed IT projects are due to causes within the control of the CEO. IT projects that also depend on a good marketing campaign, however, can have a multiplicity of potential points of failure. It is the responsibility of the CEO and executive team to ensure that there is appropriate direction and governance discipline in place so that business functions are being conducted in alignment with industry standards and business objectives to provide successful outcomes for project implementations.
- Engaged governance is another better answer for CEOs. It doesn’t mean more governance, just means to be engaging and responsible leaders who are willing to ask hard questions, demand answers, expect performance, and the courage to shut down efforts that are failing and replace individuals when necessary. Governance creates the structures for success, but to implement governance needs understanding of the complexity and how to manage it, one of which is to ensure there is a mechanism to deliver services effectively through a formal project management process, the CEO needs to be actively and visibly engaged and empowering IT. Be collaborative and improve communication to increase creativity.
- The CEO should be the Sponsor to help establish or improve an organizational IT Governance. The CIO should be the Champion leading this effort. Many of the problems the empirical literature points to, as factors in project failure, can be classified as IT governance issues. IT governance is a board responsibility and the CEO should be the one organizing the company in such a way that IT and the business are working together. It helps if the CIO has business knowledge too. With a established IT Governance framework, both the business stake holder and IT personnel will work with a established set of expectations and "rules of engagement" when delivering the projects. Proper escalation paths are defined as well as the timeliness of escalations. Part of the IT Governance should include a well-defined Project Management Framework that works for the organization. Make it simple, but effective to be able to set the right expectations for Scope, Time, and Resources. The IT organization must be able to provide realistic estimates and not feel obligated to make unrealistic commitments.
- Project Reporting Forum: Since a PM does not usually have visibility directly to the CEO, a formal reporting forum must be in a place where the PM can answer those two questions, is the project on schedule, and on budget with the approved scope? Some organizations have all PMs post project status summaries weekly for the CEO to see, what might be the impact of the CEO holding each project sponsor accountable for successfully managing their business changes. The Forum could be a dashboard the CIO presents to the Executive Management Team, and for any project that it is in trouble, there should be a well-defined set of activities that will require the CEO's approval. So you bring an answer to the problem, instead of just bringing a problem to the CEO. The CEO should know when there is an issue that is critical and one that requires their wider powers to put back on track. If the CEO is willing to take these steps and will participate as escalations are brought to him/her, then it’s highly possible that the organization's IT Portfolio improving overall and the number of "Trouble" IT project decrease.
Thus, IT projects require executive support from the CEOs and their staff members to be successful. The CEO should empower CIO, and CIO has to build that relationship with the CEO to gain the support of the executive team. The CIO can not deliver a successful project without CEO and business support.