As the new decade begins, a look at the past 10 years shows that large-scale IT project failures were plentiful. From ERPs to CRMs, millions of IT dollars were squandered.
Seldom is an IT fiasco in private industry made public; however, government IT fiascoes are more visible for outsiders to scrutinize.
When collectively examining IT failures, the Office of Government Commerce (OGC) in the U.K. has concluded that common causes of IT failures include:
- Lack of a clear link between the project and the organization’s key strategic priorities, including agreed upon measures of success
- Lack of clear senior management ownership and leadership
- Lack of effective engagement with stakeholders
- Lack of skills and a proven approach to project management and risk management
- Lack of understanding of and contact with the supply industry at senior levels in the organization
- Evaluation of proposals driven by initial price rather than long-term value for money (especially securing delivery of business benefits)
- Too little attention to breaking development and implementation into manageable steps
- Inadequate resources and skills to deliver the total portfolio.
It’s interesting to note that choosing the wrong technology isn’t mentioned, though countless IT failures have been attributed to technology failing to perform as promised.
The past decade’s prize for the IT project most in need of a sanity check goes to the U.K. for its attempt to modernize its National Health Service (NHS). The NHS National Programme for IT (NPfIT) is considered the largest civil, IT-based modernization program ever undertaken.
The goal is for patient records to be electronically available to all clinicians, while appointments and admissions will be booked online and drugs electronically prescribed. This seven year and counting project is four years behind. Since there’s no detailed record of overall expenditures, costs are estimated to be anywhere from £6 billion to £20 billion (roughly $6.5 billion to $31 billion U.S.). An official revealed that he and his colleagues were given 10 minutes to make the case for NPfIT to the Prime Minister.
During one five-year span, there were six different bosses over the project. Contracts were signed before the government knew what it wanted to buy and before the suppliers knew what they were expected to build. It turns out the provider of a key software system had sold vaporware—overpromising and underdelivering.
My sources there tell me implementations of patient administration systems in London and the south of England have caused prolonged delays in treatment, surgical procedures, and in diagnosis of such diseases as cancer. Delayed appointments and missing records are common, and some hospitals can’t track which treatments have been given to whom. The financial underpinnings are being strained by unexpected costs and being unable to invoice for work they’ve done. At one point, a frustrated member of parliament observed that, “If Connecting for Health had been created by one of this country’s enemies with the specific task of wasting as much money as possible while causing maximum anger and resentment among doctors, nurses and hospital managers, it could hardly have done a better job.”
On the positive side, one of my clients, who shall remain anonymous, practices the following seven principles and has an exemplary success rate of completing IT projects on time and within budget:
- Perform an accurate Cost Benefit Analysis (CBA) and present it to the CIO/CEO
- Organize so IT people who gather requirements work closely with the business units
- Assign an executive sponsor who will be held accountable
- Assign proven Project Managers (PMs) who have previous experience with the type of project they’re assigned to manage
- Limit technology choices to a set of proven building blocks consisting of pieces that integrate (i.e., are able to sufficiently scale up or out to handle the volume of work)
- Establish and enforce processes and standards and disciplined execution, which reduce the number of variables
- Manage vendor access within the company so vendors can’t cause disruptions (have vendors sign a relationship agreement explaining rules).
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