A Room Full of Elephants

I recently presented a topic to a group of technology professionals. The subject was the high rate of failures in technology related projects. We are talking about projects with lots of promise, in terms of delivering cost savings through automation, competitive advantage, and ROI; yet they were management failures in terms of reduced scope, running years behind schedule and way over budget. Four decades of these statistics offers a very grim trend for IT projects – at least a 70% failure rate over 40 years.

One would think that the realization that IT is producing assets internally with costs that are ten to twenty times the market value would be the kind of information that serves as a wake-up call. Yet, this knowledge was so institutionalized that the best response from the audience was a yawn.

When is an elephant in the room – really an elephant in the room?

It turns out the answer is complicated.

If we are thinking in a narrow, linear fashion, then in the short-term, this is where the theory of management and the reality of culture clash. For the business, the prime directive is to create outcomes with value that exceeds the total cost of ownership. Yet the feedback from the technical experts was both amazing and telling.

• IT efforts are not technically projects in the formal PMI sense, so the statistics are irrelevant.
• IT is inventing the future, and that has a cost.
• We have to over promise or we won’t get funded.
• IT is comprised of techno-artisans, not a construction crew.
• Design is a massive problem – business users have no idea what they really want, so they leave it up to techno-artisans to tell them what they want.

If we are thinking in a broad, systemic fashion, we are forced to consider that purpose of IT is not greater than the purpose of business. In other words, in the long term, business always wins. Techno-artisans have justified their existence as a cost saving function of the modern business organization. At some point, the efficiencies gained in other areas of the organization drive down costs, it reveals IT as the most expensive function in the business. Thus it becomes are target for change.

• Can’t control the cost of in-house custom solutions; replace them with commercial point solutions.
• Can’t control the cost of integrating point solution; replace them with integrated solutions.
• Can’t control the cost of infrastructure and operations; send it to the cloud.
• Can’t understand what the user wants; give them workflow engines and train them to do it themselves.

We all know that technology is an industry and it is here to stay; but IT is just an organizational function. Just because IT is responsible for technology does not mean it is “too big” to fail. The bottom line is really two different but related stories - in the short-term the bigger IT culture may eat the smaller strategy for breakfast, but in the long-term, quicker system of business will eat slower IT culture for dinner. However, if IT is to evolve and remain a relevant function in the business organization, it must re-think its inventive culture and shift from techno-artisan to that of an innovative culture of entrepreneurial service. In other words, get out of the old mindset of inventing solutions looking for problems and get into the mindset of delivering value.