Original Post Date: Thursday, October 20, 2011 

Check out this article.   “Why IT Projects May be Riskier than you Think”.  If you read through the comments you will see that this article truly resonates with many in the field.  In the article the authors discuss research of over 1471 IT projects (large projects with an average cost of $167 million) comparing budgets and expected performance with actual costs and results.  Their results were surprising in that the average overrun was only 27%.  Turns out that the average isn’t what requires study but rather the outliers.  The study found that 1 in 6 of these projects experienced average cost overruns of 200%.  This appears to represent a disproportionate number of projects with huge overruns.   

There is much about this discovery that is disturbing.  Nothing good happens when large IT projects go off the rails.  Money is lost, careers are ruined, and businesses tank.  And going forward – it’s not getting any better because projects are getting more not less complex.

OK – while this study is eye opening in some sense - unless you’ve been living in a cave it’s not really news that lots of large IT projects fail.  It seems to me the primary reasons for this are

* Failure of business leaders and IT personnel to communicate successfully about the problem to be solved and the plans for how to solve it.
* Project plans that evolve from optimism, bravado, or capitulation
* Failure to understand that change is hard and that technology alone will not effect change
* Refusal or inability to learn from history
* Inability to accept that changing or adding requirements to a software project can have far reaching effects that cost money and take time (seems like a no brainer but it happens all the time)
* Leadership that acts without introspection, self awareness, courage or good sense.

In other words there’s a very human element to most IT Project failures.  Some things that businesses can do to mitigate the likelihood of such failures:

* Business leaders should work collaboratively with IT on all aspects of a projects – conversations should be two way with both sides listening to the issues and concerns
* Organizational history on like projects should be studied.  If no history exists, look externally to learn what works and what doesn’t in your industry
* Tools and processes should be used wherever possible to support project estimation, planning and decicion making without emotion or bias
* Change needs to be championed from the top down
* Evolve the project in small achievable chunks.  Assess progress regularly.  Have a plan for how to identify problems as they arise and a criteria for when it is time to cut your losses
* Business and IT leaders need to act with knowledge of the business, knowledge of their teams, honest and realistic progress assessment, and courage to make hard decisions.

Certainly none of this is rocket science.  But it seems to me that any organization contemplating a large scale IT change initiative should first turn eyes on their organization and their past history to see how well or poorly they have addressed the issues outlined above.