As an Information Technology (IT) enthusiast, and avid reader of IT publications I am consistently impressed by new and emerging technologies and the possibilities they open to the world. And yet when I talk to most of my acquaintances about taking on a new IT enabled initiative, they react as if they’ve been told they need to redo their latest colonoscopy. Why: because most IT projects do not deliver the expected results. They either are late, cost too much, don’t deliver the expected benefits, or some combination of the above. In fact, a McKinsey study found that 17% of IT projects fail so horribly they put the organization’s ongoing existence at risk.
While technology companies, periodicals, conferences, and consultants all talk about why you should adopt the new technology, they almost all fail to mention that there is a less than 50:50 chance you’ll be successful. That’s a pretty poor record for a multi-billion industry. However, because companies that successfully adopt technology are today’s business winners, not adopting new technologies is not a real option. So why do projects fail, and what can be done about it.
People fall in love with technology and pursue it before they understand how it will improve their competitiveness. Russ Finney, a professor at the University of Texas, during an executive briefing emphasized that doing an IT project that did not support a corporate strategy was a recipe for failure. To be successful a company must start with a strategy, and then select technologies that enable that strategy, not the other way around.
Organizations approach IT projects as an IT challenge and not an organizational challenge. IT enabled initiatives that improve an organizations competitiveness do one of three things: 1) Optimize the existing way of doing business, 2) Expand the existing business by entering new markets or offering new services or products, or 3) Disrupt existing business models by creating new markets or methods of competition. In each case the initiative requires that business is done differently. I remember asking a sales executive who wanted IT to provide a new solution without business involvement, if he felt our third-party developer working half the world away was the best person to decide how his salespeople interacted with our customers. Clearly the answer was “no”. Designing how an IT system should work is much too important a task to be left solely to the IT department. Projects that are important to realizing a strategic imperative must be led by the business, especially when they have an IT component.
Speeding up an ineffective process via autonomation or implementing a new tool seldom adds value. In practice layering a new tool onto an existing process often renders existing manual activities used to mitigate process deficiencies ineffective. The analogy I like is that the process is your railway track, and your IT solution is the train that runs over them. If you replace a steam engine with a high-speed engine without upgrading the tracks, the most likely result will be a spectacular crash. The project team needs to review and update the business processes. Fortunately, there are several methodologies for doing this, including lean process design, and business process modeling. The team should pick the methodology that is most appropriate for their culture and project, identify an expert to facilitate the work, and have that expert work with the existing process owners to design the new way that work will be performed. In other words, fix the tracks before starting up the new engine.
Successful IT enabled initiatives require changing people’s behavior. Such initiatives not only change how work gets done, but frequently change who does what. This require people to actively support the new way of working, which can be a challenge for parts of the organization who perceive the initiative will reduce their status or add to their workload. It is critical to use an organization change management process that; clearly communicates what is changing and why, actively seeks out and mitigates potential change resistance, and ensures everyone has the skills, tools, and resources to be effective once the new solutions and processes are in place. Finally, remember the axiom that you manage what you measure. Managing new processes and tools requires new measurements. Identifying the new measures, and assigning responsibility is the final critical component of the change management process.
On average 55%+ of major IT projects either fail to come in on budget, are delivered late, or fail to deliver the expected value. Great IT delivery organizations have success rates of over 85%. Find out more about how you can improve your success rates by visiting www.haserconsulting.com.
Projects success rates are from research done by IBM, McKinsey, PMI 4PM and Calleam.
