Features

Changing the culture of acceptance: IT project delivery failure is not OK

In the past few months the list of public and private sector IT projects that are being delivered either shamefully late or astonishingly over budget has continued to lengthen. Companies are already battling adverse market conditions and preparing for even leaner times ahead and delays or failures in the delivery of projects can have ruinous consequences. In the public sector, the pressure is on to improve citizen services while reducing costs and moving to more transparent and sustainable models. As private and corporate citizens we are becoming almost inured to news of project extensions, restructuring and refinancing.

Mark Richards, chief executive of expw: consulting, an independent consultancy that delivers business and IT projects in Europe, Middle East and Africa, considers this to be an unacceptable state of affairs. He believes that the dynamics of delivery must be far better understood and addressed. To have a hope of fighting back against routine failure, organisations need to understand the reasons why IT project delivery fails in the first place. Only then can they make smart choices, ensure that the right people are in place and do the right things to avoid potential failure being built into projects.

There are two key questions to answer. Why do so many IT projects fail to deliver on time and to budget? What can be done differently to avoid failure?

Common ills

The government’s spending watchdog the National Audit Office has announced an investigation into problems with public sector IT contracts for the NHS, HMRC and MOD. This follows reports of issues with projects covering the overhaul of the NHS IT system, tax credit management and database projects, amongst others. This comes on the back of complaints by the Conservatives that Whitehall departments have wasted more than £200 million over the past five years on uncompleted IT projects. Owing to corporate embarrassment there are few clear or recent figures for private sector projects. However, a study carried out by the British Computer Society, a leading professional body for workers in IT estimated that the cost of project failure across the European Union to be up to €142 billion in 2004 alone.

There may be a range of explanations behind the delay or budget overrun of an individual project component, but what causes a complex and long-term project to fail is not simply the compounding of these items. Several common errors are regularly made at the overall project level, and they can be hardwired into the plans themselves if not identified upfront.

It’s not just about technology

Companies often tend to misplace their focus solely on the technology investment rather than on the business outcomes it aims to generate. They see the selection and integration of the technology as the overriding project success factor and the most strategic part of the overall project investment.

Of course it is important that they evaluate their technology options, but if they over emphasise technical factors they give far too little emphasis to other vital enabling factors by default, which include the delivery approach, speed of execution and choice of integration team.

Companies should dedicate more time to planning the implementation approach and to deciding how to resource, direct and manage the project. They should also consider how long the project will take to deliver business benefit and how best to measure its progress. If the project fails to deliver against the business requirements, then the technology itself potentially becomes redundant and the investment meaningless.

Get the right team on board

Having the right people on a project and in the right roles, is absolutely fundamental to its success. Whether a company is working with its own in-house or third-party integrators, it needs to ask the right questions. Are people with the appropriate knowledge of the business strategy leading the project? Is the project truly being led – or is it simply being managed? Good management should be expected by default, but it is the leadership that really counts towards making the project a success and delivering the benefit. In the wider team, is every team member adding value?

These considerations are particularly important where a company has opted to use multiple suppliers and systems integrators, since overlaps, duplications and role conflicts can occur very easily. There are excellent reasons for drawing expertise from multiple third parties. This enables the deployment of specialists with specific expertise in each project element, rather than a single systems integrator which is wholly responsible for the end-to-end delivery. This can increase the chances of a project being carried out to deadline, since slippage by any individual is identified early and as each stage is managed, allowing issues to be resolved rather than stack up. Healthy competition between consultancies and systems integrators can also keep everyone on their toes, leading to a more efficient and successful project.

The value of independence

The multi-vendor model, however, can also potentially present some risks of failure. In order to eliminate these, independent project management responsibility must be assigned to a team or individual. The leadership can then work with all suppliers and ensure at each stage that project delivery is in line with expectations.

expw: consulting has found that having an independent consultancy responsible for the technical delivery across a number of players can support success.

It recently worked with four large systems integrators, two of which were offshore, on a new CRM system for a global financial media company. Its role was to oversee the technical delivery of the project, working alongside and aligning the work of all parties. Together the combined onshore/offshore team delivered the software to deadline. expw: was then able to make a seamless handover to the client’s operational staff. By using an independent integration team to orchestrate multiple suppliers and systems integrators involved in the project, operators can gain greater confidence in the delivery of their IT implementation.

Communicate better

Paying attention to neglected areas such as communication is vital. Another common failing in IT project delivery is the process by which assignments are handed back over to the client by consultants or from the IT department to the business. Ensuring that the business has a clear understanding of how to use and maximise the functionality of the new IT system is a critical success factor and yet given relatively little importance. Project Initiation Documents (PIDs), one hundred pages long and full of tightly packed information and instruction, are commonplace – but are they ever read and do they actually get the information across?

Instead of handing over PIDs solely in tedious document format, IT project managers would do well to save this as backup for a more personal, interactive and informative communication of the information. This is business-critical material, which deserves to be presented to its audience effectively and allows users opportunities to interact and ask questions on the deployment of the system. 

Longer perspective

Intermediate project deliverables are often given too much importance. Rather than focusing on these, project managers should aim to eliminate as many intermediate project deliverables as possible, they should aim to build outcomes – not deliverables. This is not to say they shouldn’t keep the business or client frequently updated on the status of the project. Regular, accurate progress measurements are fundamental and key both to increasing the level of trust between IT and the business.

Project delivery – cheaper, quicker, better

All businesses would wish to implement strategic IT projects more quickly, economically and surely. Above all, they need to eliminate the risk either of failure or of the project taking so long that the business needs no longer match the aims of the project. There are two important trends which will help: Agile methodology and ‘Software as a Service’ (SaaS).

The Agile approach to IT implementation offers companies a quicker and surer means of delivery. Agile delivers business benefits earlier and unlike Prince2 or Waterfall, allows feedback from the end users without having to wait for user acceptance testing.

Prioritised requirements can be bundled into short “Sprints” of work during which analysis, design/build and testing are executed in rapid succession. In this way Agile provides a platform for projects to be tested frequently against business aims and for new system functionality to be demonstrated to end users along the way. This enables the business and IT provider to work closely together, with stakeholders involved throughout the project.

The past few years have seen the emergence of a further alternative for companies looking for faster achievement of software-enabled business goals. As an alternative to long, complex bespoke application development, Software as a Service offers a new model in which an application is hosted as a service and provided to customers via the Internet.

Since the software is not installed on the customer's own computer, SaaS alleviates the customer's burden of software maintenance, ongoing operation and support. At a time when IT budgets are tight, SaaS presents a unique means of reducing upfront expenditure through less costly on-demand pricing. Analyst house, Gartner, predicts that SaaS and the ‘cloud computing’ model will be one of the top technologies for 2009 with adoption being driven by businesses' pursuit of cost savings and quicker implementations.

expw: consulting firmly believes that the ‘as a service’ model will take off this year and that it will become a strategic component of many future IT projects where speed to implementation or market are important. In testament to this, expw has become an official consulting partner for worldwide leader in on-demand CRM services, Salesforce.com. It is early days for SaaS but the signs are that it will play an important role in seeing the era of very long-term waterfall projects come to an end or certainly in significant decline.

Summary

The increased pressure on all organisations to reduce costs, increase efficiency and improve customer care will continue to drive the need for large IT-enabled change projects. If they do not challenge the status quo that allows IT project delivery to stretch and cost ever-increasing amounts of money, then they need to re-evaluate established IT delivery approaches. Companies should have the courage to consider new delivery techniques and new technology routes to goal, keeping the business objectives and speed of delivery as critical, non-moveable pillars.