Why IT Projects Fail... and How to Find Project Success
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When considering the field of information technology, one would be remiss to not mention the importance of successfully completing projects. Projects, which can be defined as any unique activity with a defined beginning and end date that is intended to create a unique product or service (Project Management Body of Knowledge, 2013), are integral to the planning, design, implementation, and support of the information systems driving commerce across the world. Unfortunately, the success rate for information technology projects is, quite simply, not very good. In fact, some estimates place the failure rate for information technology projects at over fifty percent (Florentine, 2016). Due to the high capital expenses, large amounts of time, and considerable staff expenses common to IT projects, these failures come with severe consequences for companies. In some cases, a large project failure can even result in layoffs or put the company out of business altogether. Even when projects are completed on time, they are often completed over budget – leaving the company scrambling to find financial resources they did not consider during the budgeting phase. For these reasons, IT projects must be carefully managed to ensure success. This article aims to explain why information technology projects fail as well as provide recommendations to reduce the risk of failure for IT projects.
Why Do Projects Fail?
IT projects fail for a variety of reasons. One of the largest reasons is poor requirements gathering (Business Analysis, 2015). Soliciting the requirements that need to be met in order for a project to be successful is one of the first tasks that needs to be completed for any project. Unfortunately, many organizations simply skip this step. Without clearly gathering and documenting the needs, requirements, and business value of a project, it is literally impossible to complete it successfully. Before a project can be deemed successful, the criteria that comprise success must be defined. Without this clear definition, scope creep, ballooning budgets, and overblown schedules will occur.
Another large reason that projects fail is that risks are not always assessed, managed, or controlled via the project (Cerpa & Verner, 2009). Just as with any business activity, controlling and mitigating risk is a necessity. Projects that fail to identify and plan for potential risks are doomed to fail. For example, if a project’s success is reliant on purchasing equipment within a certain budget, but the company cannot procure the equipment at their planned cost, then without a proper plan for funding the additional expense the project will fail. Similarly, without contingency plans for scheduling, staff resources, and technical resources, it will be very difficult to complete a project. Very rarely do projects complete precisely as planned.
A third reason projects fail is that they do not have the necessary support and buy-in from key business stakeholders. Without engaging the decision makers in the project planning process, a project faces insurmountable odds. In every project, tough decisions will inevitably need to be made. If a key stakeholder does not consider the project important, or if they do not fully understand the need for the project, they are more likely to allocate resources elsewhere or remove support for the project. It’s important to understand the needs of these stakeholders to ensure that the project delivers value (Project Management Body of Knowledge, 2015).
Recommendations to Reduce the Risk of Failure for IT Projects
To reduce the risk of failure for IT projects, there are several domains to consider. In addition to considering the above risks, project managers on an IT projects must take great care to exercise both technical and administrative soft skills. Laudon and Laudon point to three main recommendations for ensuring project success: Managing technical complexity, utilizing formal planning and control tools, and increasing user involvement (2016).
1) Consider and manage technical complexity. The technical complexity of an IT project must be managed appropriately. There should be clearly defined roles and responsibilities, along with technical experts in the technologies being utilized. There must be training to develop the knowledge, skills, and abilities of project staff and a clear roadmap showing the technical prerequisites. For example, prior to starting the implementation of a cloud-based SaaS solution, the project team should ensure that the necessary physical infrastructure (such as a high-speed, fault-tolerant network) is in place to support the anticipated bandwidth needs.
2) Utilize a formal planning methodology. Adhering to a formal approach such as the Project Management Body of Knowledge, along with planning and control tools, is essential to project success. These tools should streamline and simplify the planning process, as well as allow for ease of project monitoring and reporting. Examples of tools and techniques include GANTT charts, Work Break Down Structures, and Balanced Scorecards. By using formal planning and control tools, project managers can ensure the consistency and reliability of project deliverables.
3) Foster buy-in from stakeholders and end-users. An IT project team should take care to engage end users to increase user involvement. By cultivating end user participation in the project, the project team can identify and resolve potential problems before they arise. For example, a key end user may notice that a critical deliverable is missing from the project plan. They may also find real-life situations to consider that the project team did not realize. Increasing user involvement also promotes a sense of investment among end users. When engaged, end users are more willing to embrace the change associated with project completion.
Lessons Learned… You Can Never Truly Fail
I’d like to close with a reminder that as long as you are learning from your mistakes (and documenting the solutions as ‘Lessons Learned’ for next time!), you can never truly fail. An amount of tolerance for failure should always exist, as failure (on some level) spurs innovation and efficiency. If you do find yourself in a situation where a project has gone over-budget, failed to meet its required deliverables, or was not completed on time; be sure to take note of your trials and tribulations…. your learned experience will come in handy for the next project and you will find continued success as a result!
Cerpa, N., and Verner, J. M. (2009). Why Did Your Project Fail?. Communications Of The ACM, 52(12), 130-134. doi:10.1145/1610252.1610286
Florentine, S. (2016). More than half of IT projects still failing. Retrieved April 21, 2017, from http://www.cio.com/article/3068502/project-management/more-than-half-of-it-projects-still-failing.html