August 22nd, 2008

'Debunking IT Project Failure Myths' [podcast]

Posted by Michael Krigsman @ 11:01 am

Categories: CIO issues, Cultural issues, IT issues, Interview, Podcast, Project portfolio management, Project strategy

Tags: Information Technology, Exec, Strategy, Management, Michael Krigsman

According to various studies, at least 30% of all IT projects fail in some important way. Failure rates seem to have plateaued at this level because most organizations don’t really understand why their IT projects go down. As a result, failures persist, with some organizations even proclaiming, “We’re not at fault because we did everything right.” Such attitudes are misguided.

In his recent report, titled “Debunking IT Project Failure Myths,” Lewis Cardin, a former CIO and currently senior analyst at Forrester Research, states:

Firms commonly use three metrics to decide whether a project effort is successful: Did the project meet its schedule, stay within budget, and deliver on requirements?… Firms use these same measurements to establish project success rates simply because they are so obvious and business execs easily understand them. IT execs often get measured on these outcomes and are held accountable for the results delivered by project managers; when a project is deemed a failure, this accountability can be bad news for IT. The problem is that this IT accountability is frequently misplaced. Worse still, the conclusion of failure is often incorrect.

Translation from the trenches: the real sources of IT failure lie in issues like project management culture, which neither IT nor most business people are comfortable analyzing, let alone fixing. Lewis’ research describes four critical dimensions that project stakeholders frequently misdiagnose, resulting in repeated failure:

Unresponsive governance, which leaves project decisions hanging. IT project governance has the role of project approval, problem resolution, direction-setting, and communication with business stakeholders…. Unless the cause of this delay is visible and shown to be for governance reasons, someone is going to point fingers — months later — to defective project management and not the real source of the delay.

Lack of communication from change management, which leads to false conclusions. Business managers may change requirements during project execution…. At project completion, the business has forgotten about the improved value component while memories are crystal clear about the increased dollar and time investment. A project has a high probability of being tallied under the failure column when in fact it may have been a noteworthy success.

An unrealistic project plan, which dooms the best project. All too often, when these projects go on the rails of the original project plan, PMs must spend more time on damage control with steering committees and project resources rather than on execution — doubling their work when it is least desirable to do so.

First-number syndrome, which makes business execs forget it’s an estimate. When projects are first sized, which is likely to occur before they are approved, estimates of cost, time, and resources are preliminary with a wide confidence interval…. But business execs remember the number and forget how uncertain it is…[and] may see this simply as increasing costs, not as the inevitable result of greater knowledge.

Issues such as executive sponsorship, business case, usability, and vendor integrity play a large role in determining the outcome of IT deployments. Unfortunately, most organizations don’t pay sufficient attention to these key areas because they’re hard to measure. Nonetheless, IT project success is not possible without paying careful attention to the real causes of failure.

ABOUT THE PODCAST

I urge you to spend 12 minutes and listen to the attached podcast. Lewis and I explore these issues during a provocative and informing conversation. The discussion of change management and the cultural determinants of IT failure alone is worth your time.