Next month's HBR has new evidence on the colossal cost of IT failures. It's the largest global study ever of IT change initiatives. And it's not optimistic:
"It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project. In fact, the data suggest that one or more will."
The study conclusions seem sensible - smaller projects, better risk assessment - but they don't get anywhere near the root cause.
For a start, even if IT projects were smaller and risks were better managed, there is the bigger problem of 'projectification' - the challenge of managing multiple projects within organizations that are complex, fast-changing and increasingly virtual.
The HBR report includes data on 'projectification':
61% of managers reported major conflicts between project and line organizations
34% of companies undertook projects that were not aligned with corporate strategy
32% of companies performed redundant work because of unharmonized projects.
All of which points to the underlying issue, the root cause of most IT failures: communication. More specifically, the lack of a framework for effective collaboration that ensures joined-up thinking across the enterprise.
This is absolutely not breaking news - Michael Krigsman and others have been hammering on about this for years. But it's still true.
The answer, as leaders such as Cameron have realized, has to be a collaborative framework, with a robust governance wrapper, that sits at the heart of the business.
It has to use the universal language of end-to-end business process. It has to be holistic, not just about what's automated. It has to be integrated, combining process with analytics, risks and controls, documents, quality and compliance. It has to offer different stakeholder perspectives of one process reality, especially to align IT with the business. And it has to support people doing real work, and engage them in continuous improvement.
Implementing a platform of this kind is not necessarily easy. Conceptually it's neat and obvious. And yet implementation often meets resistance beyond the normal inertia.
Maybe that's because it's hard to shift a culture to embrace transparency and new levels of visibility and accountability. But maybe there's an even deeper reason for clinging on to things as they are and rejecting the wider perspective. Projects - even big ones - are quite comfortable places to be. There's a seductive sense of certainty and control.
We don't want to lose project control of course, but the future must surely lie in coordinating all projects within the wider enterprise perspective. It's the only way that major IT failures, that can cost $m as well as the end of many jobs, can be averted. And major business transformation failures, and major compliance failures, come to that.
Why Your IT Project May Be Riskier Than You Think - Harvard Business Review, Sept 2011
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Mike,
as you rightly say, communication and collaboration is key.
That becomes even more important when you look at the causes behind IT project failures. More often than not, it's not IT internal problems but a combination of error-prone business requirements coupled with a 'because we can' instead of a 'because we should' attitude.
The financial consequences alone are staggering. I#Ve written a short piece about this if you're interested: http://taraneon.de/blog/2011/08/29/bpm-avoid-making-that-costly-mistake/
Thomas
Posted by: Thomas J. Olbrich | 30 August 2011 at 07:49 AM