Decoding the real culprit behind IT Project Failures.
Managing IT projects can be a complex and challenging endeavor. A Harvard Business Review survey discovered that IT projects exceed their budget by 27%, while at least one in six projects experience a 200% cost overrun and a 70% schedule overrun. Furthermore, a PwC study of over 10,000 projects revealed that a mere 2.5% met their success criteria, with poorly managed projects accounting for 17% of cases where an organization's existence was put into question.
Four Project Factors
IT projects often fail to achieve their objectives due to a multitude of factors such as taking longer, costing more, or not delivering expected benefits. The long-held theory regarding the four project factors - Scope, Schedule, Budget, and Quality - posits that the achievement of the expected outcome for three factors frequently comes at the expense of the fourth. For example, if a project's schedule is shortened while maintaining fixed quality and budget, it is likely that the scope will be narrowed. On the other hand, if there is scope creep with fixed schedule and quality, a budget overrun is probable.
IT - Business Alignment
While there are numerous reasons why IT projects may fail, such as inadequate requirements, unclear objectives, poor communication, and resistance to change, these are symptoms of the real root cause - the Alignment of IT with the Business.
Achieving meaningful IT-Business alignment can be a formidable challenge due to constant trade-offs, difficult decisions, and pivots between satisfying business requirements and mitigating risks in an ever-evolving digital landscape. This necessitates an iterative alignment mix of strategy, culture, and talent across the enterprise.
To attain IT-business alignment, it is crucial to concentrate not only on technology and processes but also on people and culture, as well as their collaborative engagement. The following steps have been observed to be effective in achieving IT-business alignment:
Run IT like a Business
To promote a more independent and customer-focused IT culture, it’s helpful to treat internal stakeholders as customers and view ourselves as being in competition for their "business." It's crucial to remember that business units are not captive customers and have a choice in where they procure IT services.
As a competitive business, IT should prioritize investment across three key areas: running the business, growing the business, and innovating the business for our stakeholders. By maintaining a balanced focus across these three buckets, we can ensure that we are meeting the needs of our stakeholders while driving innovation and growth within our organization.
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Even your Mother can be a Stakeholder of IT!
The realization that IT stakeholders can come from anywhere, became clear to me when I launched a new online retail banking portal. My Mother's unsolicited feedback was direct, but I also recognized that employees, board members, shareholders, and even suppliers all have a stake in the project's success. Rather than viewing this as a challenge, I embraced it as an opportunity.
To address this, I created a formal IT communication plan focused on stakeholder updates and promoting dialogue and trust. The plan was synchronized with recurring operating mechanisms at daily, weekly, monthly, and quarterly intervals, tailored to both internal and external audiences. By refining the content based on the specific needs of each stakeholder group, I was able to increase trust levels and foster meaningful engagement.
To enhance the alignment of IT to the business, it's also essential to establish Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs) that supplement conventional measures like reliability, stability, and security. One suitable metric to begin with is the Net Promoter Score (NPS).
Become embedded inside your Stakeholder Teams
To further improve IT-Business Alignment, it's important to establish a dedicated team that works closely with business stakeholders, particularly those in critical functions. This team should be embedded within the business to understand its operations and goals, helping IT better align its services to meet the business's needs.
This team should also be empowered to make decisions and commit resources to support business objectives. By breaking down silos and fostering collaboration, IT can work more closely with the business and deliver more meaningful outcomes.
By embedding itself within the business, IT can gain intelligence, develop a shared vision, conduct joint planning for shared responsibility, build trust, and enhance cultural understanding. The goal is to become a trusted advisor to business units.
There are several ways to embed IT in the business. Initially, IT should ask for permission to attend recurring staff and planning meetings held within the business unit. If budgets allow, establish an IT business liaison role that reports to both the business unit and IT. Probably the most beneficial approach is to establish multi-skilled agile project teams consisting of members from not only the Business Unit and IT, but also other corporate entities with responsibilities, accountabilities, or input on project decisions.
IT-business alignment is an ongoing journey of engaging the enterprise. It requires a consultative and collaborative approach to achieving a shared vision, goals, and plan. Once pursued, you can be confident that project performance and outcomes will be consistently achieved.
Chief Financial and Operations Officer
1 年Great Article, Spot on! Keep them coming