Why Information Technology Projects Fail

Published Date: 02 Nov 2017

Information technology is, "the study, design, development, implementation, support and management of computer-based information systems, particularly software application and computer hardware" (Information Technology, Wikipedia). Those aspiring to improve the current way work is done must begin to implement the capabilities of information technology to their design process. While proper management of IT projects is crucial for organizations today, the failure rate of IT projects are astounding.

There are many reasons for why IT projects fail. The two most popular reasons for failure include poor project planning, as well as a lack of managerial involvement and support. Project failure can be very detrimental to an organization and team. This paper outlines the most common reasons for project failure.

However, sometimes project failure is inescapable. If an ongoing project must be ended, damage control becomes very important. What to do if project failure is inevitable is also illustrated in this paper.

Introduction:

As defined by the Information Technology Association of America (ITAA), information technology (IT) is "the study, design, development, implementation, support and management of computer-based information systems, particularly software application and computer hardware," (Information Technology, Wikipedia). The use of computers and computer software to convert, store, protect, process, transmit and securely retrieve information are all actives encompassed in the term information technology. Today, the term is more recognizable then ever before. The umbrella covering IT can be quite extensive and cover a wide range of fields. IT professionals perform many duties including data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. This tutorial is geared towards IT professionals dealing with the management and administration of entire systems.

Those aspiring to improve the current way work is conducted must begin to implement the capabilities of information technology to their design process. Standard business process design and information technology are natural partners, yet managers and companies have never fully exploited their relationship. Information technology offers the potential for substantial improvements, however proper management of projects is crucial for success.

The failure rate of IT projects is astounding. Brenda Whittaker defines project failure in three ways: "overrunning its budget by 30% or more, overrunning its schedule by 30% or more, or failing to demonstrate the planned benefits." The 1995 Chaos Report found that more than half the projects cost an average of 189 % of their original estimates and 31% of software projects will be cancelled before completion at an estimated combined cost of $81 billion. For example 60% of the failed projects were planned to take less than one year to complete and exceeded this time frame (Whittaker, 1999). The use of new and unproven technology along with poor estimations and weak definitions of requirements at the project planning stage also lead to failure. With the 250 billion spent each year in the USA on IT application development, wee see that the cost of failures and overruns is staggering (Chaos Report, 1995). Because of these staggering numbers, the software industry is often categorized as in a state of crisis (Ewusi-Mensah, 1997).

In order to best manage IT projects it is important to look at the causes of project failure. We are forced to look at what exactly it is about IT projects that make them so susceptible to huge fiascoes. A survey questionnaire distributed in April 1997 was sent to Canada’s leading 1,450 public and private sector organizations focusing on IT project management issues. The 1997 Survey of Unsuccessful Information Technology Projects by KPMG Consulting established that more common reasons projects fail are because of poor project planning, a weak business case, and lack of top management involvement and support (Whittaker, 1999).

Difficulties and failures of IT projects also have issues associated with organizational and human factors. A review of detailed case accounts will improve knowledge among healthcare organizations and the finest implementation practices. Currently there is little web-based information on "lessons learned" by others in their own attempt for IT planning. The increasing push for Electronic Medical records (EMR) would benefit greatly through sharing knowledge via the web on project difficulties, design and implementation. Filling the information gap on IT project management should be an essential goal of the health care community.

This tutorial outlines the crucial reasons behind the failure of information technology projects in an effort to minimize the risk of future failures. Learning from past mistakes allows us to improve project management techniques and avoid IT failures, which greatly affect an organization.

(Kringsman, 2008)

Step-by-Step Guide: Why Information Technology Projects Fail

As it is easy to see from above, most information technology projects are likely to fail. Below is a figure that outlines all the major reasons why projects tend to fail:

(Major Causes of Project Failure, 2008)

While there is no real step-by-step guide that leads to failure of a project, there are many factors that contribute. The six most common are undeveloped project goals, poor project team composition, lack of project management and control, an inappropriate technological base, no senior management involvement, and an overrun schedule and budget.

1. Undeveloped Project Goals:

Poor project planning will almost always lead to failure (Whittaker, 1999). One main reason for this failure is the inability to agree on the missions, goals, or objectives that the project is attempting to undertake (Ewusi-Mensah, 1997). It is necessary that specific plans and requirements for the project are instituted in the development phase. Failure to do this will most likely result in "fragmented efforts" and a "lack of team focus" for the duration of the project. It is equally important to make sure that the chosen goals and objectives are within reach of the project and team (Ewusi- Mensah, 1997). If the intricacy or the effort that will go into the project are misunderstood, the chances for failure certainly increase (Silverstein, 2007).

2. Poor Project Team Composition

A weak project team is a set up for failure. It is important to make sure there are no problems between team members, and if problems arise, that the team will deal with them accordingly in a timely manner. It is also important to make sure that each member of the team is appropriate for the project, meaning that they understand how to do the work and are technologically able to do so (Ewusi- Mensah, 1997). The team needs to constantly remain organized and always be in communication with each other. Differences between team members will give the opportunity for varying viewpoints, which could be significant to the project. However, if communication between these team members is not up to par, they will not be able to share their ideas and therefore the project may suffer (Ewusi-Mensah, 1997).

3. Lack of Project Management and Control

Project failure will automatically occur if the project is not managed properly. This not only involves poor leadership skills on the side of manager, but also includes poor control methods for the project. Poor methods of control mean that there is no system to measure progress or identify risks (Ewusi-Mensah, 1997). Project managers must make sure that no team member is in the "wrong" position or doing a job for which they are not suited. It is also important for project managers to know their responsibilities and freedoms and act accordingly. Project managers, like the project team, must not only be involved but must also be competent and sure of what they are doing (Silverstein, 2007).

4. Inappropriate Technology Base

If the organization or company is unequipped with the necessary technology to complete the project, it will be almost impossible to succeed. This also means having a staff that is equipped with the skills to use that technology, which sometimes gets overlooked if the technology is new to the company (Ewusi-Mensah, 1997). Projects not only fail due to outdated technology, but also because they use new technology that not everyone is caught up on. Technology can also affect a project if learning to use it takes longer then planned (Whittaker, 1999).

5. No Senior Management Involvement

The involvement of the senior management is just as important as the direction the project team receives from the project manager. The senior management must be involved in monitoring progress and making critical decisions through out the course of the project. It is key that the job they are supposed to perform is not pushed onto project managers or technical experts. Senior managers should hold review meetings so they are up to date on everything and nothing is overlooked. Another possible problem that could occur if senior managers are not involved is that there may be a concealment of information or problems that they need to know about (Ewusi-Mensah, 1997).

6. Escalating Project Cost and Time of Completion

The Association for Computing Machinery once said "It is common knowledge in the computer industry that projects are still over budget and behind schedule in far more cases than information system professionals and management find acceptable" (Ewusi-Mensah, 1997). Cases of projects where the cost and the time of completion skyrocket almost always need to be canceled. However, both of these reasons for failure are almost always due to deeper problems that lay in the projects history (Ewusi-Mensah, 1997). While research has shown has that schedule overruns often lead to failure more often then budget overruns, maintaining both are key to a successful project (Whittaker, 1999). The following graph illustrates this point by showing the highest percentage of failed projects as overrunning schedule and overrunning budget.

(Whittaker, 1999)

Minimizing Damage: What to do if a Project must be Cancelled

It is obvious that information technology projects fail for many different and varied reasons. However, once a project has failed, there are steps to take in order to reduce any further damage to the company, organization, and team. The first thing that should be done when a project fails is to thoughtfully communicate the failure to the entire project team. This needs to be done in a caring and respectful manner instead of a in a harsh or angry tone. If the failure is communicated properly, the damage to the morale of the team will be minimal, therefore giving them more hope in future projects (Ewusi-Mensah, 1997).

Another way to reduce harm once a project has failed is to examine why the failure occurred. Determining what went wrong should be done immediately so that no important information is forgotten. Understanding the underlying causes of failure and reporting them will help everyone involved in the project be more prepared in the future. Breaking the current "code of silence" that surrounds many project failures would also be helpful in reducing damage. If a company could report to the whole industry when, why, and how a project failed, people could learn from the mistakes and information technology projects could succeed much more often (Ewusi-Mensah, 1997).

Case Study: The California DMV in 1987

In 1987, the California Department of Motor Vehicles (DMV) embarked on a project that they hoped would revamp their driver’s licenses and registration application process. Although this may not sound very difficult to do, it was an information technology project and therefore needed to be planned for as one. However, since the DMV did not have any adequate resources or management, this IT project was disaster-prone from the start (The Chaos Report, 1995).

This IT project was initially designed to update drivers licenses and registration processes, redesign the DMV’s databases to make them more efficient, and prepare the new systems for future changes (Bureau of State Audits, 1994). However, since the project was not planned for appropriately, tremendous failure resulted. The main cause of failure was reported to be the lack of planning that went into this project. In a report later published by the California State Auditor, the DMV reported that they "progressed beyond the developmental stages…rather than completing each stage as planned, the DMV substantially modified the stages or failed to complete them altogether" (Bureau of State Audits, 1994). The members of this team clearly did not follow their original plan, and had not accounted for any changes that would need to be made if deemed necessary. Instead of returning to the original scope, they continued on without completing important phases of the project.

Another reason for the failure of California’s DMV re-development included that it was not supported by the senior management or the state’s information management staff. Other team members cited poor user involvement, poor design specifications, and unclear objectives as a major reason the project failed. In 1993, the project was officially cancelled, after $45 million dollars had already been spent on it. (The Chaos Report, 1995). Below is a figure that shows the success criteria for information technology projects, along with the highest number of points available in comparison to the California DMV case:

(The Chaos Report, 1995)

Conclusion

Although the failure of information technology projects is at an all time high, there are ways to prevent their demise. One way of making your project more successful is referring to reasons why projects have failed in the past. Appropriate planning, management, and realistic goals will all help a project succeed. IT is a very important field, and its projects have the potential for numerous benefits if they are handled appropriately.