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Everything you’ve read about IT Project Failure is wrong

Everything you’ve read about IT Project Failure is wrong

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I did a scan around the web to figure out what many of the leading thinkers were saying about IT project failure and the root causes.  Numbers varied between 20% and 80% of projects failing to deliver on their business case.  The root cause analysis that follows from these failure numbers spends a lot of time looking at the IT project, but most forget to look at the causes of failure that are outside the project’s control.

In the diagram below, the central blue box represents causes of IT project failure that are inside the control of the IT team.  As you can see, there are many more causes of IT project failure that are OUTSIDE that blue box than inside it.  Yet, countless articles have been written on the factors INSIDE the box.  I think it is time we take a slightly wider lens to the problem!

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The factors outside the project are as important, or more important, than the ones inside the box.  I have worked on many projects over the years, and if I look back at the ones that ended up cancelled or scrapped, the reasons were not ones in the blue box.  They were usually ones from the top box: where the project should not have begun in the way that it did.  Let’s look at these six factors:

  1. Lack of accountability for success – Sometimes, in an organization, an interesting situation will arise.  I call this the “can’t lose” scenario.  In this scenario, the CIO will suggest that the business can benefit by doing some particular initiative, and his or her people will set out to find a business sponsor for the initiative.  In this case, the sponsor will reap the benefits of the initiative, not the CIO.  (Let’s say that the CIO has suggested a Business Intelligence initiative, and signs up the Chief Marketing Officer to sponsor it).  If the project succeeds, the sponsor wins.  If the project fails, the CIO (not the sponsor) loses credibility.  After all, it wasn’t the sponsor’s idea.  The CIO dreamed it up, after all.  In fact, the sponsor may not do any real “sponsoring.”  He may sit in an occasional status meeting and check his e-mail while the program manager he assigned from his team answers questions… and keeps him protected from any blowback.  The sponsor in this case is not accountable for success.  No one is.  The odds of this project succeeding are small.  (Note: a good IT Governance system prevents this condition). 
     
  2. Failure to get buy-in from above – Often, a senior executive will ask his operational leaders to suggest IT projects for the planning cycle.  The executive (let’s say Tina Smith, Vice President of Sales) assumes that the leaders (William, Ashok, and Lee: all three are General Managers) will ask for projects that align to their individual strategic needs.  One of those General Managers, William, decides to create an IT project to implement a SOA service bus.  He wants the bus because he is investing in replacing an application and his IT team tells him that a bus is a good idea.  After all, if everyone in the Sales group uses it, everyone will benefit.  But William doesn’t get Tina Smith’s buy in.  He implements his SOA service bus, but when subsequent IT funding requests come up to move other sales applications over to the bus, his peers Ashok and Lee are not interested.  Their priorities don’t include moving to the bus.  William bought a white elephant.  Because he didn’t get Tina’s buy in, none of his peers will reap the benefits.  Is the SOA bus a failure?  Well… it’s not a success.
     
  3. Misaligned prioritization – Lee James, General Manager of Sales for the Western region of Contoso owns a sales strategy for the enterprise.  The strategy is to make the sales force more productive by moving the company over to a new CRM system.  The CRM system has out-of-the-box support for a long list of reports, but his team tells him that he shouldn’t use those.  Instead, he should put in a Business Intelligence system in the cloud.  Lee wants to trust his team to pick the right solution.  They tell him that the cost of this system is $4 Million over two years.  The company is moving to a new strategy that de-emphasizes the direct sales force.  Instead, the company will be relying on social networking and direct eRetail to make sales.  To make the new strategy work, there are eight projects totally $8 Million that need funding.  There is a competition for dollars in the IT budget.  Lee goes to bat for his $4 Million commitment.  It’s important because “we are already here, so we have to complete the job.”  This is an example of misaligned priority.  The new BI project can be safely cancelled or scaled WAY back to support a strategy elsewhere, but that other strategy doesn’t belong to Lee.  The one that he owns needs money and he’s going to keep fighting to fund it because his boss, Tina Smith, isn’t aware of the tradeoff.  Lee fights, and Contoso loses.  Which project will fail?  Both of them.
     
  4. Slow decision making – This one is related to the other problems in that it is often, but not always, caused by a poor governance system or poor prioritization of the effort.  In this scenario, the team implementing the project needs the sponsor to make a decision, often one that requires consultation with his or her peers or counterparts in another part of the company.  The sponsor may be unwilling, unable, or incapable of having a difficult conversation.  On the other hand, they may be indecisive.  Regardless, this situation can cause serious delays in a project.  For example, Ashwin’s application sends EDI-formatted messages to a health insurance provider.  The provider had indicated that new fields are allowed in the messages that are very valuable to Ashwin’s line of business.  However, he has to upgrade his EDI translation software to get the new fields.  The EDI translation software is also used by the Finance group to send banking transactions.  Ashwin knows that the finance group will get a benefit out of the upgrade and wants them to help cover the costs.  This upgrade will add $25,000 to the cost of his project and he’s on a tight budget.  The software team offers to write a small component that will insert the fields into the data stream, but its complicated and fragile. Ashwin cannot decide if he should ask the finance team for funding or if he should upgrade the software.  The project team cannot proceed without a decision. 
     
  5. Lack of authority to drive change – This one is quite common.  Ashok reports to Tina Smith, VP of Sales for IBuySpy.  He has told her that he wants to take the lead on one of her strategies: to consolidate all of the eCommerce systems in the company to a single outsourced vendor.  Tina things that this will reduce costs all around, and Ashok is happy to take on the challenge.  His business analyst does a survey and it turns out that the services and support team offers customers the right to buy replacement parts online.  In addition, the “outside services” team allows customers to buy a service contract on their own area of the website.  The main sales site, of course, uses a high-volume low-cost vendor that Ashok is comfortable with.  Ashok sets up meetings with the owners of the other applications, but they choose not to provide the needed transaction cost information or the cost estimates of changing their internal systems.  His data is light but he strongly suspects that there is a good business case for switching.  Unfortunately, he doesn’t have the data to prove it.  Without data, the Tina won’t take the case to the CEO to require the other teams to jump onboard.  The strategy fails.  Neither Ashok, nor his manager Tina, have the authority to require their peers to adopt a lower cost system.
     
  6. Lack of influence to rally peers – In many organizations, the prevailing attitude is that the boundary between “centralized” services and “federated” services is intentionally fuzzy.  In these companies, there is no policy that requires a function to be centralized vs. federated.  For example, if a company has ten divisions, three may have their own financial processes, while the other seven share a common finance unit.  The decision to use the central finance unit, or to own a federated unit, can be made and unmade depending on who the leaders of the business are.  (Note: leaders change, and with them, these decisions change as well).  This kind of policy is good for flexibility, but creates both inefficiencies and often, confusion.  This is simply a tradeoff in the design of organizations.  It is neither right nor wrong.  In this environment, any business can create a “centralized” function by convincing more than one business leader to come together to create a shared resource.   The flaw comes when a group wants to create a “centralized” (or simply “shared”) function, but they lack the influence needed to get multiple businesses to join the initiative.  Difficult questions of shared funding can be demotivating, and the political need to create “alliances” can be difficult for junior executives that, in many ways, are competing with one another for the next rung on the career ladder.

 

Each of these conditions has the potential to kill an IT project.  I would suggest that MANY IF NOT MOST of the failures of IT projects can be traced to one or more of these conditions, but these conditions rarely get counted in the statistics for “Causes of IT Project Failure.”  Why?  Because, in most cases, projects that suffer from these conditions are either never funded, or are reworked so that the political problem is simply avoided.  The project business case does not reflect the problem, so the criteria for failure (doesn’t meet the business case) is never met.  Efforts are made to avoid (but not address) the problem before the business case is written!

This is the world of the Enterprise Architect.  These are the kinds of “failure” that fill the eyes and ears of an Enterprise Architect.  If an EA focuses on only these six causes, he or she will deliver real, tangible, and unique value to their enterprise without ever overlapping the roles and responsibilities of an IT architect, business analyst, or technologist.

  • The problem is already in the first sentence when you talk about "IT Projects". There are no IT projects, only business projects that use IT. As long as project managers maintain the view of "IT Projects" they will continue to overlook all the failure root causes you have listed.

  • Many of these causes seem to apply to EA as well. What do you think?

  • Just saw this related article on large project failure in the u.s. Military. www.post-gazette.com/.../billion-dollar-flop-air-force-stumbles-on-software-plan-665500

  • This is a really interesting article, thanks for sharing. You raise some interesting points.   One item you haven't covered is that many organizations will simply "do the wrong thing" in the first place.   Sponsors, stakeholders and organizations get blinded by the "Solution Illusion".   They see a solution they love, and then try to shoe-horn it into their organization.

    Successful projects start with a thorough and robust understanding of the problem domain.  And they also start with a completely *technically agnostic* view of what the solution might be.  Yes, the solution *might* involve IT -- but there are many other ways of solving problems. Process change, organizational change, outsourcing etc.

    To take an example from you article:  

       "The strategy is to make the sales force more productive by moving the company over to a new CRM system"

    This is an example of a solution being mixed with a problem.   The problem here seems to be "Make the sales force more productive" and the *assumed* solution is "move the company over to a new CRM system".  I suspect that's not the only way!   I worked with an organization that faced this very dilemma.  There were reservations over how long it took sales users to update the system with notes, meetings etc, and there were questions over the usefulness of the data it was generating.  Upon proper inspection, it was discovered that their existing CRM system had all the features and functions they needed.  The issue was user buy in.  The resolution? Buy the sales staff iPads.   That way they can update and access the system easier from the road.   This solution could only be formulated by understanding the business processes AND the environment in which the users actually had to work.  

    So -- in summary, I agree with the comment above   "There is no such thing as an IT project" -- just business projects that implement, impact, change or interface with IT.

    Thanks again for posting such a thought provoking article.

    Kind regards,

    Adrian.

    --

    Blog: www.adrianreed.co.uk

    Twitter: @UKAdrianReed

  • I agree Adrian.  Good points

  • Your missing one block at the bottom though - one that states "All of the above"

  • You have done well to highlight the problems outside the blue box. But the problems have been highlighted in isolation. I can think of another vital factor is the interrelationship between each of these boxes. The relationship and collaboration between IT and management, IT and end-user, IT and supplier, all these are equally responsible for failure. In fact I see one of the most important roles of CEO is to ensure that the IT - User relationship is that of collaboration and not of confrontation. These are all people aspects and are dependent on attitudes, fears, misconceptions, beliefs, expectations and other people traits.

    I therefore call it a special skill and have coined a term called "Behavioral IT" to describe this. It deals with the human aspects of IT failures. (Pls see http://prem.cu.cc/behavioralit and http://prem.cu.cc/seminar, or google on 'Behavioral IT').

  • I assume that the last comment was made by Prem U. Kamble since the links were to Prem's pages.

    I would agree that there are relationships between the items.  The diagram above is a taxonomy, not a model of relationships.  First things first.  If we agree on the distinct causes, we can compose models that represent the groupings and interdependencies that drive specific situations for specific organizations.  This blog post represents step one, not step two.

    I disagree with the word "equally" in following statement: "The relationship and collaboration between IT and Management, IT and end-user, IT and supplier, all these are equally responsible for failure."  Nonsense.  Some organizations will have excellent relationships in one area, and crappy relationships in another.  Where the crappy relationships exist, larger opportunities for failure exist.  I agree that a good generalization is that, INDUSTRY WIDE, one could collect a count of failures by cause and they would break out in fairly predictable ways.  That said, they would not, even in that case, break out to be 33% each.  The three groupings that you mention are not equal causes for IT project failure.

    It's good to see that you've coined a term called "Behavioral IT."  Not sure we needed a new term for that... I would have called it "delivery management" or perhaps more specifically "change management," but what the heck... we are never short of new names for existing things in this business :-).  

    You will find a good section in the IIBA BABOK (chapter 7) that covers some of these aspects of delivery readiness.  You will also find discussions of delivery management in other (somewhat overlapping) bodies of knowledge.  There are probably 200 books on the topic of successful readiness and deployment strategies.  

    I'm sure that your work is unique and valuable.  However, the language is different and you may not be using the same techniques as your audience is.  You may want to familiarize yourself with that literature in order to make your work more accessible to your core audience.

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