Early Warning Signs Of It Project Failure

Published Date: 02 Nov 2017

Abstract—Failure or success of an IT project is relatively subjective. IT projects may not deliver what they commit originally. Often they are delayed. Often they are over budget. There are some even delivered are not either originally specified or what actually needed. There are plenty of reasons why this happens. This paper describes the nature of IT projects and literature review on IT projects failure. Also being discussed is the early warning signs (EWSs) of IT project failure.

Keywords- IT Project, IT Project failure, early warning sign

Introduction

IT projects are considered a sturdy endeavor and have specific attributes that make them distinctive from other engineering projects. Failure has been synonymous with many IT projects over the last four decades. It is like a well-known secret that IT Projects are likely doomed to failure. Similarly to any other projects, it is very difficult to create complete and stable requirements and that brings about the challenge of uncertainty in IT projects. IT projects may not deliver what they promise, some are over budgets and some completed way later than expected. There are some even what being delivered are not either originally specified or what actually needed.

Taking IT projects closer to our own environment which is in the Malaysian public sector, the implementation approaches of the IT projects handled are in the form of in-sourcing (internal personnel and expert), outsourcing (external services) and co-sourcing (external services with internal expert). Understanding further on IT projects types are; IT research; IT strategic plan; application system development; hardware and software procurement; IT system enhancement; expansion of IT system; and IT compliance and fortification.

According to the Attorney’s report in 2006, a total of RM 290 million spent by customs for underutilized systems and as a solution, they have chosen Deloitte Consulting firm to prepare a plan worth RM 451 million to overcome this problem [1]. The Ministry of Health (MoH) has also invested in MyHealth project however the project was extended from 2007 to 2012 [1].

This paper focuses on understanding the nature of IT project and then identifying the early warning signs of IT project failure.

Literature Review

Project Management professionals put on great efforts in developing and implementing standards, process models, methodologies and guidelines on best practices for IT project management, despite that the failure rate of IT projects continue to be high. A survey in 2005 discovered that 31% of Information Systems (IS) projects failed to deliver on time and another 31%, within budget [1]. Likewise, in 2009 a study conducted by Ernst & Young in the Czech Republic revealed that more than 50% of IS projects were not finished on time or on budget. It may not be that significant but 5% of the projects were called off before they were even completed.

It is a believe by many people the CHAOS report presented by Standish Group in 1995 taken the IT community by huge surprise because it had reported the unknown bitter status of the IT project. As a result, the report was considered as the benchmark of IT project failure. The Standish Group made a comprehensive study in the United States, which included various large, medium, and small organizations across major industry segments: banking, services, retail, wholesale, healthcare, manufacturing, insurance, securities, and local organizations. There is another study conducted in 2003 by Oxford University and Computer Weekly in the UK reported, remarkably, that only 16% of the IT projects reviewed were considered successful (Sauer & Cuthbertson, 2003).

It is apparent on failure of IT projects as discussed earlier. However, we need to understand as well the project status classification. It is the vision of Standish Group to collect case information on real-life IT failures and environments. According to them, projects can be categorized into three resolution types; successful, challenged and failed. Successful means the project is accomplished on time and within budget, with all originally specified features and functions. The project is categorized as challenged when it is completed and operational, however it is over budget, beyond time estimate, and with less features and functions than originally specified. A project is failed when it is cancelled before completion or never even be implemented.

Accessing IT projects success or failure is considerably subjective, [1] categorize into three different levels; total failure, partial failure and success. Total failure is when the IT project discontinued and ended up as not being implemented, or it is a new project that has been implemented but at the end of the day it is deserted. IT Projects are categorized as partial failure when major goals have not been achieved or significant unwanted end result is encountered. A fairly direct form of partial failure is where a project succeeds at first, but later fails after a year or so. IT project is considered as success whenever it attains its major goals and does not experience major undesirable outcomes.

early Warning Signs Of IT Project Failure

There are many factors to why IT Project fails. The order in which they are addressed is rather random and subjective. Actually, they are all interrelated and therefore no order is perfect. From literature review, evidently the root cause is our failure to manage the requirements process adequately and, in particular, that requirements drift goes largely unnoticed [4].

Instead of focusing on general IT project failure factor, this paper focuses on early warning signs. In a study by researchers to qualify as an early warning sign (EWS) the indication must take place in the first 20 percent of the early stage of the project’s calendar. Second is by identifying the most important EWSs from IT project management articles in the academic literature and practitioner journals, as well as input obtained from experienced IT project managers [3].

The research conducted by group of three researchers (Schmidt, Lyytinen, Keil & Cule, 2001) on experienced project managers showed that EWS with background related to people and process category were getting high score. This is not a surprise since IT projects practically never fail because of technical reason, despite the fact that people and process problems may manifest technically. From initial 53 EWSs, then a careful examination carried out on 17 risks with a mean score greater than 6 where the final lists of the 12 most influential EWSs were derived. Of the dozen, it is either fall under people or process related risks.

There are six people-related EWSs of IT project failure mainly involving top management, project management, project team members, subject matter experts (SMEs), and stakeholders in general:

Lack of top management support - get started "from the bottom up"

Weak project manager – not capable to effectively lead or communicate

No stakeholder involvement and/or participation - stakeholders are not serious and committed to project success

Weak commitment of project team - project team may not have the right skills and resources needed for success

Project team members lack of required knowledge and/or relevant skills - team’s competency to alleviate product-related risks

Subject matter experts are overscheduled - SMEs do not spend acceptable time to project teams

Another half dozen of EWSs are from process-related risks centered on five project management processes and their associated deliverables which are fundamental to success requisites (including a business case), change control, schedule, communications, and resources. The six EWSs are:

Lack of documented requirements and/or success criteria - functional, performance, and reliability requirements are not documented

No change control process - Change is unavoidable in a project, so every project must have a process to manage change

Ineffective schedule planning and/or management - inconsistent understanding of the intermediate milestones, deliverables, and due dates

Communication breakdown among stakeholders – either less or do not communicate and work together on progressively

Resources assigned to a higher priority project - unrealistic to expect the completion to be as planned

No business case for the project

Conclusion

Though IT project is synonym doom to fail it does not impede the number of IT projects rolled out every year. This paper helps to understand the nature of IT project and identify EWSs of its failure. It is learned that people related and process related risks make up a dozen lists of EWSs. The knowledge can be useful to ascertain attributes in mitigating IT project failure.