IT Project Failure A Self-Fulfilling Prophecy?

For organisations, IT is critical. The technology used by a business can impact directly on the customer’s experience, which can in turn impact on the bottom line.

But after years of failed IT projects that have become a significant drain on staff and resources, organisations have become battle weary and downbeat. The repeated failing of projects has led some to expect failure and this can in turn become a self-fulfilling prophecy.

Understanding the risks

Despite the business benefits IT projects can bring, in a recent survey commissioned by MSM Software and Computing, 63 percent of organisations admitted to being involved in projects that had not achieved the desired level of success. By failing to take a thorough grasp on the risks posed by IT projects, and looking at how these risks can be negated, organisations are risking the longevity of their business.

There are a number of milestones in the process of an IT project which present potential risks. One of the first and most critical is the requirement-gathering phase. Sixty percent of people surveyed in our study stated that requirements which are too vague represented the biggest obstacle, with others citing lack of uniform language throughout the organisation and interpretation between stakeholders of what the finished system will do as challenges.

Almost one third, or 29 percent, believe that projects go wrong because they are over ambitious while 25 percent attribute failures to requirements are not correctly matched to the solution.

Under pressure

The potential fear of in-house IT software failure and the impact it can bring means that many businesses choose to outsource IT projects. Outsourcing not only enables a company’s in-house team to focus on their core activities, but also brings dedicated, and in some cases more experienced, hands on board to act as an extension of the team. Despite the value that can be gained from outsourcing IT, this does not alone guarantee that an IT project will be a success.

This was the experience of a leading UK investment bank, which had commissioned a software company to deliver a portal for high net worth clients and their IFAs. The system suffered numerous issues, which presented the bank with considerable reputational, as well as financial damage. In this case the IT provider chosen did not have sufficient understanding of the risks involved, nor did they truly understand the needs and objectives of the bank.

Managing risk

From the requirement-gathering stage to deployment, there are numerous points where an IT project can be derailed. However, thinking about IT strategically, just as an organisation would do for other aspects of the business, can increase the likelihood that the risks associated with an IT project are controlled and contained, leading to its ultimate long-term success.

Thomas Coles is the Managing Director of MSM Software