The Failure Root Causes of Large IT Projects

IT projects are essentially "business initiatives with technology dependencies".

Many say IT projects are a myth--there are business projects/programs with varying IT content. IT project has much higher failure rate compared to the other type of business projects, especially the failure of the large IT projects will significantly damage business’s capability and capacity, statistically 17% of large IT projects fail so badly that they threaten the existence of the company. So what’re the root causes of the large IT project failure, and how to improve the overall IT project success rate?

Lack of business case definition: Any business project (being an endeavor having a defined objectives, time-frame and delivery parameters) exists to deliver a specific business outcome. The project is started for a clear purpose. The realty these days is that they almost invariably have an IT component, but some have heavy IT dependence. While, software engineering discipline and user design focus yield significant and improved outcomes, the bigger question to ask is why do IT projects exists as they do? The success or failure of a project or program starts at the definition of the business problem to be solved. Either the statement is too general or the business executives fail to spend the time and effort required to properly define: (1) the business problem to be solved in the Business Case; (2) the associated and quantified risk to the business is missing or inadequate; (3) the enterprise resources impacted and the enterprise investments over its life required to achieve "success" defined in the business problem, etc.

Lack of governance discipline: It’s rare to find a major IT project that delivers to time quality or cost. Problems leading to failure inevitably arise at the beginning either through poor requirements, governance not understood or owned and skills and resources not committed. A centralized IT Governance that proactively aligns IT with business partners to embrace a "No Net New" approach to solution development can make a difference, and is something that can bring predictability to achieving desired Digital Outcomes. Furthermore, external dependencies need to be internalized wherever possible. It mean that other related projects outside the control of the particular project need to be brought into a program and external suppliers need to be aligned with back to back agreements. The Business Sponsor reports to an Executive Committee made up of the senior business leaders whose business is benefiting from the project or program, without such governance framework and discipline in place, the project or program is destined for failure or at best partially meets expectations at great cost. The downstream activities such as defining the business requirements will fall into place when the proper governance and executive owners are in place and their performance incentives are aligned to solving the problem defined in the Business Case.

Lack of business accountability: most IT projects fail because the business gives too little attention to requirements and too little attention to change implementation/benefits realization.

The Business Sponsor shall own and be responsible for delivering the solution to solve the "business problem”, the business all too often delegates its responsibility to "own" the solution and success outcomes to the IT function, when the business should be the "owners". Without this foundation, projects and programs go off course , like a “ rudderless boat ", and either never get back on course or do it at great cost and expense without achieving the anticipated business benefits. Even a major IT infrastructure overhaul is a business investment and will unquestionably affect 'the business' both during and following its implementation. So the 'IT Project' is in fact a myth and arguably naming it such is the first indicator that the business looks like it may be failing to take the necessary ownership or assign it to the correct sponsor. The Business Sponsor is also accountable and responsible to retain the necessary resources both internally and externally to complete the project or program.

Lack of the right balance between IT and the business. Whilst recognizing the importance of IT in this day and age especially as IT increasingly contributes to the business case and benefits. However, there often isn't the right balance between IT and the business. This should be reflected in the project governance structure and team taking into account the skills and personalities involved. Perhaps besides the obvious points like getting requirements right, IT should spend more time on the business case and assigning ownership across the business. All the focus are on business value. If the results might be better if people started calling them "business initiatives with technology dependencies." Ultimately. success rates can be enhanced by balancing the effort dedicated to discover and understand requirements against the effort required to make changes in the evolving code base without negatively impacting quality, consistency or architectural conformity. The lower the time and resources required to modify and refactor the code base, the less risk there is in allowing changes and, therefore, the lower the impact and risk on the project in its entirety. There are many other factors that come into play, and these are generally well known. The two highlight are 

(1) overly optimistic estimation of time and effort, and 

(2) failure to engage with the business leading to a complete miss on core business capability as well as no effective business change implementation. 

Not leveraging the emerging trend and technology: organizations must first seek to leverage their existing digital assets, and avoid buying or developing new technologies until they understand what they need and can reuse- (and whether others can use it as well). This is possible when there is a centralized and transparent approach for managing all digital assets at a feature and function level. As the number of digital channels continue to emerge, features can and will be delivered in various and user relevant ways. This enables IT to take advantage of open APIs, and distributed computing to finally capture the promises of reuse and deliver more, faster and with improved quality. Next, consider the countless abundance of redundant features and overlapping functions in global organizations that create complexity by complicating new efforts. More importantly, ask yourself: 
-How much could be saved through reducing time to delivery if you didn't have to start from scratch with every new solution? 
-What would be the top line benefit to business LoBs by delivering solutions two to three months sooner than anticipated? 
-Does buying that next commercial application actually deliver the benefit it’s promising when it’s incorporated into our vast portfolio? 

Just like the life, the success stories are similar, but the project failure has different causes, some are perfect for a highly structured process and others aren't, the point is business and IT have to work as a team, define the business case clearly; manage project through mature governance discipline, leverage the latest technology trend and build a high-performing project team to deliver business result with speed, flexibility and agility.

Posted in: Lessons from Failures,Project Management