Why IT Projects Fail
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"As a rule, he or she who has the most information will
have the greatest success in life."
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| Disraeli |
At first sight, companies all over the world appear to have taken Disraeli's
words to heart. Billions have been spent on Information Technology in
the pursuit of efficiency, competetive advantage and profit. Yet as the
first wave of enthusiasm for the latest high concept advance in IT recedes
there is a predictable rash of articles in the trade press trumpeting
the shocking fact that '70% of all [enter current IT bandwagon here]
projects fail to deliver'.
These articles then generally go on to intone sagely the mantra that 'projects
to deliver [choose you own TLA] must be driven by the business'. This is
not news. Good IT people (and there's a lot of them out there) already
know this.
The danger with all those 'projects fail to deliver' headlines is that
they tend to focus attention on the project, and in doing so mis-diagnose
the problem. In almost all cases it is not the project which fails. It
is the the day-to-day use of the system after go-live that fails - by failing
to deliver the added value that was the original goal.
In the 21st century it is a rare IT department, consultant or
vendor that does not understand the need for an executive sponsor,
business leads in project teams and early involvement of the
user community. But when the project managers roll up their
Gantt charts and move on to the next project, when the early
life support team has fixed the last bug, when the mugs bearing
the project slogan are beginning to get chipped and the unexciting
necessities of business-as-usual once more take centre stage;
whose job is it to make sure the capabilities of the new system
are fully exploited?
It is understandable that the delivery of a major new system grabs the
attention. Like new parents, the organisation is caught up in the long
and often difficult period of gestation - after all for many projects it
can last well over 9 months. Just as new parents find all focus is so drawn
to the dramatic life-changing event of the birth that it eclipses the more
important reality of a brand new person that needs nurturing to maturity,
so organisations become so embroiled in planning for succesful go-live
that the less concentrated task of bringing up the system to fulfil its
potential falls by the wayside.
It is time for organisations to stop focusing on the 80% of the work (implementation)
that drives 20% of the value, and start focussing on the 20% (effective
operational use) that will yield 80% of the value.
Technology is an enabler - it makes things possible, it does not make things
happen.
Building a suberbly engineered Formula One car does not guarantee you a
place on the winners rostrum. All it does is allow you to enter the race.
Victory goes to the team which recruits the best people, trains hardest,
works together most seamlessly. It is not the best technology that wins,
but making the best use of the technology.
So how does an organisation go about making things happen with Information
Technology? The key thing to remember is that there are two elements involved:
Information and Technology. This may sound like stating the obvious, but
we have become so used to speaking of IT and IT projects in a single breath
that we no longer consider the words and in doing so we invariably overlook
the crucial word Information. And the truth is that IT departments are
far more about technology than about information.
The real power of information technology is in the way we can use it not
merely to automate tasks, but to informate them. Each task creates as a
by-product information about that task. Each process in the organisation
starts to provide data about itself, creating feedback loops that make
constant adjustment and improvement possible.
As well as enabling this continuous incremental improvement in operational
activity, informated processes steadily build up a huge pool of data covering
every aspect of the organisations activity. This data resource is the raw
material of Business Intelligence, the analysis that answers the big questions
and uncovers the 'golden nuggets' of information that can lead to quantum
leaps in business performance.
Informated processes hold out the promise of enabling the much talked of,
but seldom achieved, 'Learning Organisation'.
The problem with all this is that the focus of big IT implementations in
areas such as ERP or CRM systems is inevitably on the task automation element
- after all, when the lights all go on at go-live, we have to be able to
ship that product, contact those customers. The amount of time spent planning
to ensure that the process will also yield the best feedback information,
and result in the richest data resource tends to be minimal - and when
the project begins to overrun on time or budget, probably less than that.
If you want an indicator of how strong this tendency to put automation
before information is, just look at the time lag between the first articles
citing the parlous failure rate of CRM projects, and the first appearance
in print of the idea that there had been too much focus on 'operational
CRM' and that what was missing from the mix was 'analytical CRM'.
Even where the importance of the information that will result from new
systems is realised, there is seldom any concerted attempt to put in place
the functions that will be needed to monitor and safeguard the quality
and usage of that information going forward. Getting a return from information
requires both that the quality of the data resource is managed, and that
a conscious effort is made to extract value from that resource.
This fact is implicitly acknowledged in the benefit statements in most
IT project proposals. Much of the promise of the project is wrapped up
in providing better Business Intelligence. However it is frequently the
case that the project does not include any explicit plan to modify the
organisations BI strategy in order to exploit the wealth of information
that will be available.
In summary, then the three reasons for failure are
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Focus on the project, not on actual use of the system (the birth
not the baby) |
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Focus on the Technology, not the Information |
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Failure to focus on BI, despite implicit reliance on this for project
benefits |
The bad news (for the business people) is that none of these
problems can be laid at the door of the IT department. It is
right for them to focus on the project. They invariably have
the best project management skills in the organisation, and
delivering big projects is their job.
It is right that the IT function focus on the technology. They have the
technical skills, and maintaining systems once delivered is their job.
Ensuring the quality of information built from the data that flows through
those systems is not. Technology is a tool. The IT people will keep it
sharp, but it is down to the business to whether it is used well or badly.
It is right that the IT function does not set the Business Intelligence
strategy for the organisation. It is not their job. Their job is to advise
on and deliver the best tools to support the strategy. Only the business
can decide the key measures to monitor that it is going in the direction
set by current strategy. Only the business can frame the big questions
that BI analysts must answer in order to inform future strategy.
Time then for the business to step up to the responsibilities that come
with every big Information Technology project, but which are not about
technology. Time to take responsibility for:
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Getting maximum value out of the technology
investment after go-live |
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Actively managing the data resource |
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Ensuring the business is set up and resourced
in the areas that will exploit the data resource
- be it Business Intelligence, Direct Marketing
or CRM |
If Disraeli were alive today I've no doubt he would make a top flight CRM
consultant, and he'd be telling his clients 'As a rule, the organisation
which best manages their information will have the greatest success in
life.'
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