Why Are IT Projects So Scary?
Glenn Mauney is a guest contributor on the subject of project management. Glenn has more than 25 years experience with projects of all shapes and sizes. He has worked on projects ranging from drafting energy policy legislation to updating a management training program to a restaurant start-up to heading up academic accreditation. He has also served as a U.S. Navy Officer, advised state government on energy policy, and his work has been published in the Charlotte Observer and Asheville Citizen Times.
We’re getting close to Halloween and while dressing up as an IT project may not make much sense to the kids out Trick-or-Treating, it could look pretty scary to your CIO. They may not say it, but too often your CIO or IT Director isn’t really looking forward to the next big IT project. That’s because they’ve seen the numbers. There are lots of statistics out there, and they’re not pretty.
- An IBM study found that only 40% of IT projects meet schedule, budget, and quality goals (1)
- KPMG research from 2013 tells us that barely a third of the IT spend for an organization delivers the desired results (2)
- Figures from 2009 estimate that the cost of failed IT projects are as high as $6 Trillion worldwide (3)
Yes, that last figure is $6 Trillion USD!
Take a look at these performance figures from a McKinsey-Oxford study:
Taking a closer look at the numbers on this chart shows that overall, 45% of all IT projects experience cost overruns and 56% fall short of delivering their promised benefits. That is an incredible amount of value lost. A study from the Project Management Institute, found that for every $1 Billion USD spent on projects, $109 Million is forever lost due to poor project performance. Depending its size, an IT project failure could cripple an organization and possibly even threaten its very existence.
Why are the statistics so grim? Two simple words: Project Complexity. Add to that the increased risk that invariably comes with complex projects and it’s no wonder CIOs get nervous and break out in a cold sweat every time they give the OK for a new IT project.
As technology has become a part of, or taken over, so many functions and tasks within an organization, it has become integral to the functioning of society. To do this, the technology itself has necessarily become more robust and complex. This is a good thing because new applications continue to usher in a ton of benefits like better healthcare, cheaper energy, as well as faster, more convenient services, just to name a few. However, this still leaves us with those scary looking numbers.
Taking a second look with more of a “glass half full” view shows that 55% of projects don’t have cost overruns and 44% of projects don’t fall short on their delivering what they promised. There are companies and project managers out there doing it right. How do they do it?
What’s the solution?
So, how are these project managers keeping their projects, on budget, on time, and delivering value? Believe it or not, the solution isn’t necessarily more IT expertise. If that was your first guess, don’t feel bad, that thought process isn’t unique to IT. A lot of companies first look to someone who is more of a technical expert in the subject of the project instead of an experienced project manager.
The studies all suggest the route to a full Trick-or-Treat bag is Project Management expertise. For any of you that ever had a coach of any kind, the answer will sound familiar: Focus on the basics. It may not be as simple to execute as it sounds, but that is where the foundation to any successful project is built. The figure below is from the Project Management Institute. It shows that by a ratio of 9 to 1, Leadership skills are rated as more important over technical skills to successfully managing highly complex projects.
I had the chance to get some thoughts on this from a true expert, Dave Sides, PMP. Dave, who has worked on many truly complex and challenging projects in his more than 20 years as a project manager, had this to say.
“First, every company seems to think their projects are so unique. However, a project is a project is a project. All have scope, time, cost, and resources. The goal is always to deliver a quality product. But alas, in my 20+ years of experience we PMs are given too much scope, not enough time, and limited resources. The usual result is missed deadlines and cost overruns.
So, what to do? Meet with your project sponsor and key stakeholders, put the Work Breakdown Structure and Iron Triangle up on the white board, and negotiate. Prioritize or phase the deliverables over time or de-scope the project. Never agree to get everything done within an unreasonable time frame or with severely limited resources. The stink of poor quality will far outlast the thrill of early completion.”
What Dave says is that it’s not more IT expertise you need, but leadership and project management skills that will deliver the outcome your looking for with your IT projects.
The Iron Triangle or Triple Constraint is significant. What this tells you is that, of the three: Scope, Time, and Cost, you can’t change one without affecting the others. If you add to the Scope, you’re going to need more Time, Money, or both. Same thing with the others.
Levvel understands what it takes to run an effective and successful project. Co-Founders John Espey and Chris Hart have certainly surrounded themselves with the best in IT expertise. But, they have also embraced the reality that all of that superb technical capability is diminished without a clear collaborative process and strong project leadership.