It’s no secret that IT projects fail at an
alarming rate. Business requirements
are changing so fast that project managers who complete a project on time and
within budget may still deliver an irrelevant
product. Approximately two-thirds of all IT
projects come in significantly over budget
or late on their timeline. And about half of
these projects are deemed outright failures. So what lies behind so many failed IT
projects?
“There is certainly not enough up-front
quality thinking taking place,” says Bill
Russell, executive vice president of
Allegient in Indianapolis. “And it’s often
due to a lack of alignment between the
business side and the IT side within an
organization.”
Smart Business spoke with Russell
about the high failure rate of IT projects,
and how business owners can mitigate and
be better prepared for project challenges.
What should be considered when developing
IT project plans?
First, you need to have a clear business
objective, or scope, that defines a project’s
business value and what you will need to
accomplish. This leads to the second consideration. What are the requirements? This
is the time to develop what some call a charter — an agreement that defines the mutual
understanding between the business and
technical side. The charter defines the project by way of the business value it’s going to
deliver, the scope that’s going to be covered
and can even map out the first set of requirements that are needed.
Another critical consideration is to apply
a strong project management discipline.
What can be done up front to keep IT project
costs within budget?
This is a major challenge. Budgets need
to be comprehensive in terms of providing
estimates around business side costs, technical or integration layer costs, and organizational change and management costs,
including categories like training, documentation and moving the solution into
production.
But in order to keep it on budget, you
really need to apply risk and issue management and constantly revisit your basic
assumptions. Good project management
relative to budget comes with identifying
risks early. When risks become real, they
turn into issues that need to be dealt with.
To whatever degree that they are originating due to false assumptions at the beginning, that needs to be factored, and is all
part of rigorous project management.
How can deliverables remain relevant during
a long-term IT project?
The ‘Big Bang’ type of IT project is history.
The old model of taking on a 10- to 18-month
project and feeling good that we’re going to
arrive at the end of that period with something that’s reasonable in terms of business
value, is over. To reflect this change, projects
need to be fundamentally restructured.
You must have a clear set of requirements
that supports the business value, and you
will need to break down the project into
highly iterative releases, so that some of
the business value is being delivered in as
little as 60- to 90-day increments. This helps
you to revalidate in an ongoing basis.
Phasing the project into multiple iterations
is extremely important.
How can clients help produce successful IT
projects?
First, they should form a lead team, or
steering committee, with both business
side and IT representation. Second, a realistic set of boundaries should be developed
that outlines what they hope to achieve relative to the business value and the project
requirements given the budget and time-line. Finally, they should be aware of and
avoid scope creep.
It takes a substantial communication
plan to support this, but it doesn’t have to
involve huge overhead. It can be done with
the business and technical sides collaboratively working together. Any significant
project must have joint ownership.
What are effective methods for handling
‘scope creep,’ or changing client requirements?
We call it refactoring, or planning for
change in the business value and the delivery. You must have a systematic discipline
for arriving at the iterative milestones within a company approval process. When an
incremental value is completed, even within
an iteration, the requirements should be
reviewed with the business owners to make
sure they’re still relevant. Early mockups of
the user interface can be demonstrated to
ensure that everything is tracking against
their expectations. If feasible for approval
purposes, an early prototype can also be
implemented to provide a look and feel of
how the software will work.
What golden rules will help reverse the project failure rate?
First, businesses should aim for improved
business and IT collaboration, so they can
arrive at, and deliver, the core issues.
Second, break the project into smaller increments and get business value back into the
business side sooner. Third, consider using
different project approaches as a way to
lower risk. Finally, you must have a process.
BILL RUSSELL is executive vice president of Allegient. Reach
him at (317) 564-5701 or [email protected].
