The top 10 reasons for IT project failure and strategies to overcome them

YOUR NAME GOES HERE THE TOP 10 REASONS FOR IT PROJECT FAILURE

AND

STRATEGIES TO OVERCOME THEM

2006

INDEX

S .NO HEADING PAGE NO

1 I . WHY THE IS IMPORTANT 4

2 II .AIMS 6

3 III .OBJECTIVES 6

4 IV . 10 REASONS FOR IT PROJECT FAILURES : 6

5 IV .1 IT PROJECT IS LAUNCHED WITHOUT APPROBRIATE STRATEGY : 6

6 IV .2 THE IT PROJECTS HAS UNCLEAR GOALS AND OBJECTIVES 7

7 IV .3 OBJECTIVE CHANGES DURING IMPLEMENTATION OF THE PROJECT 8

8 IV .4 . THE

PROJECT HAS UNREALISTIC TIME OR RESOURCE ESTIMATION 8 9

IV .5 THE PROJECT HAS NO ENOUGH SUPPORT FROM EXECUTIVE

9 10

IV .6 IT PROJECT DOES NOT TAKE INTO ACCOUNT INPUT FORM USERS OR CUSTOMERS

10

11 IV .7 THE PROJECT FAILS TO SET UP COMMUNICATION AMONG TEAM MEMBERS . 11

12 IV .8 INAPPROPRIATE TECHNICAL CONSIDERATION 11 13

IV .9 RELYING ON OFF SHORING /OUTSOURCING THAT IS NOT COMPLIANCE

12 14

IV .10 The project does not employ planning and risk control across the project life cycle

13 15

V . STRATEGIES TO OVERCOME IT PROJECTS FAILURE

13

16 V .1 MAKES SURE THE IT PROJECT POSSESSES CLEAR AND MEASURABLE OBJECTIVES . 13

17 V .2 EMPLOY PROPER RISK MANAGEMENT TOOLS AND METHODS 13

18 V .3 STRICT TO THE DETERMINED CONSTRAINTS OF COST , TIME AND QUALITY 14

19 V .4 PAY ATTENTION TO CULTURAL DIVERSITY ISSUES IN CASE OF OFF SHORING IT PROJECT TO ANOTHER COUNTROL 14

20 V .5 PAY ATTENTION TO CRITICAL TASKS DURING THE IMPLEMENTATION 15 21 V .6 ENSURE TO CONDUCT PLANNING BEFORE STARTING THE IMPLEMENTATION STAGE : 15 22 V .7 OBTAIN THE SUPPORT FROM THE MANAGEMENT 16 23 V .8 ALWAYS REPORT THE PROGRESS TO FIND OUT WHETHER THERE ARE OVERLOOK STEPS 16

24 V .9INVOLVE THE USERS IN DESIGN AND IMPLEMENTATION OF THE IT PROJECT 17 25 V .10 ENSURE THAT WE HAVE ENOUGH RESOURCE IN PLANNING , COMMUNICATION AND TECHNOLOGY SKILLS 17 26

VI . CASE STUDY

17 27

VII . LIMITATIONS

19 28

VIII . CONCLUSION

19 29

BIBILIOGRAPHY

21 I . WHY THE IS IMPORTANT

A study conducted by the Department of Commerce 's National Institute of Standards and Technology ( NIST , U .S estimated that Software bugs cost the U .S economy 59 .5 billion annually which is approximately 0 .6 of the gross domestic product of U .S ( NIST 2002

The Standish Group (Corr 2002 ) found that 31 of all software development projects are cancelled due to inherent defects .Further the failed projects result in cost overrun there by amounting to 189 of what was originally estimated .It is worth while to note that only 16 of software development projects are successful

Software has a life cycle which is almost analogous to manufactured products and the maintenance cost for the software always surpass 60 of the rejected or the satellite fails to reach orbit

Software and organisation have become interdependent now and if any failure clutches irreparable loss as computers are being used in all spheres of business including development , Production and after sales services etc

Some studies reveal that about 70 of the software projects are always unsuccessful

Various studies on the subject like of Robbins-Gioia Survey ( 2001 ,The Conference Board Survey ( 2001 ) PMI , Gartner , Carnegie Mellon University , Standish group all supports this

Robins-Gioia Survey (2001

Robbins-Gioia , LLC , made a survey on the ERP implementation in enterprises which includes information technology companies , Government companies and others .About 51 replied that their ERP implementation was a failure

The Conference Board Survey (2001

This survey was about the successfulness of the implementation of the ERP Project

About 40 of the project was unable to achieve their business case within one year after its implementation

The KPMG Canada Survey (1997

The survey conducted by KPMG , Canada dealt with the reasons behind the collapse of the information technology projects

About 61 of the projects that were under study were failed and main reasons for their collapse were exceeding the budget , could not be completed within their time schedule

Further statistics reveal that only 16 .2 of software projects that are completed on time and within their budget

It is common in IT Projects the rate of unsuccessfulness is more likely than the rate of successfulness

Thus there exists more than one factor for the failure of Information Technology Software development projects . I consider recognizing the reasons why a team may fail on a project will assist IT Professionals and top management in averting the same mistakes from repeating , thus improving efficiency and decreasing costs

II .AIMS

The aim of the is to describe the importance of taking appropriate planning stage before implementing an IT Project . This is because many literatures reveal that some IT Projects fails to deliver because of technical and non-technical issues

III .OBJECTIVES

This report is to find out why IT projects fails to deliver although it has gone several stages of planning process

Using the non-participant method , collecting data and analyzing quantitative information from journal , books , magazines and other online materials , this is to list top 10 reasons that cause IT Project implementation fails to deliver . For the purpose of this research through survey findings were gathered from already performed case study

In addition , the aims at discussing in more detail about the 10 reasons behind the failure of IT Project implementation .The top 10 reasons and strategies are as follows

IV . REASONS FOR IT PROJECT FAILURES

IV .1 . IT PROJECT IS LAUNCHED WITHOUT APPROBRIATE STRATEGY

Before launching a project , proper planning and strategy should be chalked out for the implementation of the project . The business needs have to be identified clearly else the project may not add any value to the bottom line or boost the business process

Wise planning , efficient project controls are important tools in planning and control . A project with the poor controls is a project that is out of control . The following project monitoring tools can be deployed by the project manager to have control over the project such as Program Evaluation and Review Technique (PERT / Critical Path Method (CPM ) Charts , Gantt Charts and resource loading charts

The techniques will actually facilitate to conceive the various steps involved in the project before the implementation of the project and also help to monitor during the time of organizing the project and at the time of its implementation

IV . 2 . THE IT PROJECTS HAS UNCLEAR GOALS AND OBJECTIVES

The aim of a project may be partially clear due to a poor requirement gathering in the definition stage of a project . These are the projects where scope and schedule of the project can not possibly be precise hence their objectives are ambiguous due to inability to provide direct and honest feedback on the progress

A project that produces something that is not used or is grossly underused is a failure even though the product may have been developed within the budget and on time

During the implementation of the project , the Project team and the Customer may differ on certain issues or the customer requests to change the features inconsistently which have direct consequence on cost and schedule . Projects will be in turmoil because of inadequate definition of customer needs , poorly written project specifications and mid point changes in the specifications will result in incremental cost and schedule overruns

In fact , the major culprits behind these projects failures are poor needs recognition and inadequate definition of requirements

Cost and schedule over runs are common if there exist problems with the requirements . Project professionals are encountering not only overruns in cost and schedule but also dissatisfaction from customer .This may be avoided by working closely with the customer thereby understanding their exact needs and to develop exact functional requirements of the customer 's wish

IV .3 . OBJECTIVE CHANGES DURING IMPLEMENTATION OF THE PROJECT

During the course of development of software project , if client craves to change the software thereby to add some more functions or to change the requirement , this will have major impact and may result in failures The change may be warranted at times as technology changes frequently these days

Frequent changes in the project may be due to cultural gap between project team and their ever demanding business clients . This mainly arises due to failure to understand client 's needs and demands overemphasizing on technical issues at the cost of customer demand and lack of client -oriented service culture

Changes may be warranted due to uncontrolled and unexpected changes in user expectation and necessitate and inclusion of uncontrolled features to a system with a wrong assumption that one small feature will add nothing to outlay or agenda

Project manager 's failure to recognize project trade-offs will end in not crafting decisions regarding objectives on the basis of rational insight . Focusing only to the preliminary requirement will result in failure when the requirement of a project changes more than one time

IV .4 . THE PROJECT HAS UNREALISTIC TIME OR RESOURCE ESTIMATION

Unrealistic or wrong estimation of time or resource cause project related problems . Assumption of time on task equals duration is one of the ubiquitous tribulations during the construction of the work breakdown structure . The time on the task is the time the task will take to finish without any disruptions , whereas the duration time is the time the actually take to complete including interruptions . Project managers are frequently committing the mistake of using the time on task to estimate schedule which results in failure of the project

The theory of linear approximation can not be extended to the IT projects as in reality doubling or increasing the man power result only a non-linear result

The Project Managers should try to adhere the budget for the project . If a project is funded through a contract , cost run may lead to litigation penalties and financial losses for the organisation .In case the project is funded internally , it may cause a drain in the finance of the company

Though the good planning and control guarantee the success of a project but their absence will certainly result in failure to some extent

Project managers are often in difficulty because they accept things at face value . Initially , the customers have only vague concept of their needs and project manager who proceeds on such vague concept later lands into trouble as the customer may reject the delivered as one which they have not asked for

IV .5 THE PROJECT HAS NO ENOUGH SUPPORT FROM EXECUTIVE

Top Management of a company may be showing interest in large project namely high -visibility projects that are being undertaken . Such Projects always have top management support and project managers are always supported for recruitment of staff , availability of infrastructure resources and also boost the project manager 's standing within the organisation . It is to be remembered that a poor team structure is a formula for failure . Proper and apt structuring the project team may enhance the team 's efficiency . The team efficiency may be referred as the fraction of potential team performance that is actually achieved

Major structural resources of team inefficiency in projects are matrix -based friction , poor communication and poor integration of the efforts of team members

Another drawback in highly visible projects is the meddling by the top management leading to micromanagement . Only extrovert and efficient project manager can withstand the second guessing of their effort by the organizational top brass

If top management is liberal and open , the project manager and his team will be honest in reporting successes and failures in a project with out any fear . If the top management crafts an environment where failure is not tolerated , the project manager and his team may be of less interested in reporting failures because of the fear conscious

The examples of highly visible projects are the launching of the personal computer in the 1980 's by IBM and Steve job 's ongoing support of new generation computers at Apple

IV .6 . IT PROJECT DOES NOT TAKE INTO ACCOUNT INPUT FORM USERS OR CUSTOMERS

During the development of the project users may not available to provide explanation or feedback and hence the project manager has to track down the required information and to include it into the project . The Project managers are forced to cater to the caprice of a client 's wish list at the last moment . Most of the times , the project managers are forced to extend functionality . The project team by working for months together maps out , designs and codes a desired solution but later on realize that it lacks secondary functionalities without that the user won 't accept the project and it turns out to a failure

An efficient project manager will know how to pull together end users and get the proper details from them . An able project manager should know how to steer development in the direct route to poise efficient coding and appropriate user request inclusions

IV .7 THE PROJECT FAILS TO SET UP COMMUNICATION AMONG TEAM MEMBERS

Improper communication will lead to failure of the project Communication problem always exist in large software projects

These include arbitrary work rules , micromanagement from the top ranks of the hierarchy , the inability to get the right people for the job haphazard budgeting etc

But these organizational factors are ubiquitous and not confined to a particular organization . For the successful implementation of the project , the project manager should have the ability to coordinate and influence the relevant project actors and their willingness to cooperate with project manager

IV 8 . INAPPROPRIATE TECHNICAL CONSIDERATION

Due to stable change in technology , the swift growth of knowledge and the challenge of global competition , it is arduous to employ right kind of skilled employees as there is always scarcity for the skilled , well experienced technology expert in the market

A good project team should have a team spirit and they should have clear idea of what the team is and to identify strongly with it . A team which filled with team spirit always wins . A dedicated team always brings success to the project and in case where a project borrows it team members that team may not produce the desired results

A good project manager should be one who avoids pit falls before he lands in landmines causing to explode . Despite the fact that despite a project manager pushing right buttons and pulling right levers , the project performance was lackluster . Most of the project managers worry that they will be removed if they didn 't improve

IV .9 . RELYING ON OFF SHORING /OUTSOURCING THAT IS NOT COMPLIANCE WITH THE PROJECT ' OBJECTIVE

Many Companies like GE , Bank of America , Target , and American Express have to offshore contracts for developing software in other countries to save time and money . Without discipline in managing offshore relationships , a detailed recognizing of business process and the method IT supports them , a company can not only dissipate the cost and times savings it had estimated to gain through them but can also face residual problems like late deliveries , mismatch between deliverables and expectations , incremental costs and even outright project failure

The Gartner Group Survey reports that because of high turnover - the average stay of a programmer in any one software job is only -11 months and IT companies spend more than 10 of their IT budgets for recruitment and imparting training to the new staff

A company that outsource software development should not have tang for bleeding -edge technology since it demands high number of design -code test-redesign feedback loops

IV .10 .The project does not employ planning and risk control across the project life cycle

A project manager should plan for risk mitigation which is followed by executing the plan and monitoring the risk . Risk is probabilistic events and may change with time and periodical revisit the risk perception for the project is needed . Risk can be monitored by periodical report and reviews and by metric data to compare actual with plan and past performance . The project should apply major components of risk management process are risk management , risk identification qualitative risk analysis , quantitative risk analysis and risk response planning . The planning and risk control techniques are used the project management life cycle which includes initiating , planning , executing controlling and closing . The project which ignores planning and risk control methods usually end in utter failure

V . STRATEGIES TO OVERCOME IT PROJECTS FAILURE

V .1 MAKE SURE THE IT PROJECT POSSESSES CLEAR AND MEASURABLE OBJECTIVES

Measurable objective means defining and refining objectives and employing the best alternative courses of action to accomplish the objectives that the project was undertaken to address . The project manager should ensure that project objectives are met by monitoring and measuring progress regularly to identify variances from plan so that remedial action can be initiated whenever necessary

V .2 EMPLOYS PROPER RISK MANAGEMENT TOOLS AND METHODS

Risk Management administers and ensures the integrity of the project process . There should be proper application of risk management tool of both economic and managerial nature . Economic tools include budgeting budget deviation analysis , periodic budget monitoring , continuous cost /benefit analysis and user chargeback mechanism .Under managerial tools , long range and short term planning , feasibility analysis software quality assurance , schedule monitoring , organizing project steering committee etc

This includes improper use of application tools or lack of appropriate application development tools or non availability of appropriate tools Software development tools , such as CASE tools , may be used .The lack of and the ineffective use of structured method and tools are other reasons for failure

Applying lean manufacturing to software development in one technique for averting project failures . It encourages agility and responsiveness to customer demand resulting in increase in profitability where customer requirements are demanding and ever-changing . It is also additional advantage to employ suitable risk management tools and method

V .3 STRICT TO THE DETERMINED CONSTRAINTS OF COST , TIME AND QUALITY

Project mangers wants to complete the project with in the accepted time and less than the cost what was estimated but impacting the quality .A software project with out quality by compromising time and cost is worthwhile to see itself accommodated at dustbin . Adequate trade offs with respect to time ,cost , scope and quality are the three essential elements of any successful project manager

V .4 PAY ATTENTION TO CULTURAL DIVERSITY ISSUES IN CASE OF OFF SHORING IT PROJECT TO ANOTHER COUNTRY

Depending upon the country that is targeted upon for off shoring , the impact of cultural adversity will vary . Nationality can become a factor while in decision making process or in the action of team members . Level of understanding and communication differs from country to country Failure in offshore management project mainly includes a cultural clash as to bad management or personal shortcomings . In case of meetings and work as regards to project implementation , some nationals consider this as useful and some consider as a waste of time . Language barrier and communication also act as barriers in certain cases

V .5 PAY ATTENTION TO CRITICAL TASKS DURING THE IMPLEMENTATION

An appropriate project management tool can be used to create and maintain a network structure of tasks needed for the completion of the project

A user friendly interface method can be used to define tasks , define the precedence of these tasks and input their associated times to calculate the critical path in a different of ways . The team can easily create and modify task , create and modify precedence and solve the network for the optimistic , pessimistic , likely or probable critical paths . Such interface will allow the team to analyse the effects of unexpected events that could change the aim or focus of the project . CPM (Critical Path Method ) technique can be used to describe the various stages of the project , schedule dates for completion of each stage of the project

V .6 ENSURE TO CONDUCT PLANNING BEFORE STARTING THE IMPLEMENTATION STAGE

Business objectives precise details and processes will be determined documented for the future reference .The project team should thoroughly understand the current and future business requirements and posses good communication skills to draw information from others in the organisation as well as provide feed back on the goals and progress of the project They should obtain the documentation of the existing system so that an accurate assessment of the

work required for data conversions can be completed and any changes in timeline or resource requirements can be made to the proposed timelines resources and cost estimates . Documentation on interfaces and conversion shall also pursued by the team

V .7 OBTAIN THE SUPPORT FROM THE MANAGEMENT

Support throughout all hierarchy of top management confirms the company 's commitment to the project which will boost the motivation of the stakeholders of the project . The management should realize the value of the product , understand the problems it is going to solve and dedicates its supports and energy to making it happen by the project team

If the management attitude is haphazard and the project team does not follow proper process system in the project implementation , then chances are failures are more . If top management does not extend its support for job training on a continuing basis , projects do fail

V .8 ALWAYS REPORT THE PROGRESS TO FIND OUT WHETHER THERE ARE OVERLOOK STEPS

Even major IT companies often overlook the important steps needed to complete a project . The project team should have an in-depth understanding of object-oriented systems and extensive project management experience . They should realize that the success of the project depends not only on the technology but also how well it is arranged and executed . Organizations often overlook or bypass the risk management process of project management and causes failure of the project . Before development of a project , a detailed needs analysis should be and most of the organisation always bypasses this strategy which leads to failure . For the successful implementation of the project , project manager should be very cautious that there is no overlook of any strategies and also to report periodically about this

V .9INVOLVE THE USERS IN DESIGN AND IMPLEMENTATION OF THE IT PROJECT

To ensure the success of the project , it is important to create a project team with varied skill sets and to engage the end user in the design and implementation of the project .The Project should be forged by working together on high impact team building exercises , culminating in a requirements session along with users to demand what they needed from a system

Project Manager should engage users throughout their design process so that they can create persuasive design solutions that are simple and instinctive to use and in tune with the user 's requirements and expectation

V .10 ENSURE THAT WE HAVE ENOUGH RESOURCE IN PLANNING , COMMUNICATION , AND TECHNOLOGY SKILLS

Skilled and experienced software engineers are needed for successful completion of the high tech software projects . The Combination of strong commitment and good tools is the best possible solution , reducing dramatically the likelihood of all-too-frequent project failure caused by planning and control deficiencies

The Software Company should have on their rolls such efficient skilled engineers who have long standing track record in the successful development of the software project

VI . CASE STUDY

KPMG , an International Accounting and Audit Company and Canada 's largest professional services organisation , carried out a comprehensive study on failed software projects . Canada is spending an estimated 25 billion annually on IT development projects alone . The findings of KPMG in fact depict an alarming picture of projects mismanagement in both private and government sectors

The study reveals the prime culprit is the schedule and cost over runs and secondary is project team inefficiency as the reasons for the failure of the software development projects in Canada

Another example is the Federal Aviation Administration which wanted to a system to replace the antiquated air traffic control system in U .S . The system , the Advanced Automation system took nearly 10 years for its development . The software was considered as undependable to trust for life and death situation . It was also belated by six years . The project failed in part because of the failure in the software development

Another case study is the Silicon Graphics which released a software application with major bugs . The project schedule was impossible to be honored . The management as a corrective measure employed at the fag end two outside contractors who were new to the Company 's software . It proves that by deploying more bodies at the end of a project do not equate to a condensed schedule to meet an unrealistic it has complicated the matters rather than finding a solution to the problem

The Thailand Government was forced to cancel its Bt 1 .8 billion IT project which was awarded to IBM (Thailand ) because of the startup and ever ending problems it faced during the software development stage

VII . LIMITATIONS

The Method does not involve direct interviews , which will slightly reduce objectivity and accuracy of information . We are utilizing the reliable data from books , expert 's analysis , journals and various publications from available media . Using the data resources above , we are hoping to present an independent and objective analysis towards the contemporary issue

VIII . CONCLUSION

This research reveals valuable information for top management , IT application development teams and the IT industry in general . By studying the past mistakes , one can learn to avert the mistakes in the future . The risk of future failures can be avoided by understanding what not ought to pursued .Knowledge begets wisdom and wisdom may generate substantial cost savings

If project managers adopt the following strategies , they can mitigate the failure of the projects

Before implementation or development of a project , a through planning is essential

Task should be scheduled according to their priorities and focus should be made to such tasks in the critical path

To minimize the risk , appropriate process may be devised so that it can forewarn about the possible risk

A software project without an unambiguous objective is like a gun without cartridges . Hence it is essential to have clear mission and objectives for success of a project

When making decisions on objective changes , project manager should recognize project trade-offs

As regards to estimation of schedule , project manager should use duration instead of the time on task

When estimating time or resources , try to avoid using linear approximation

A prudent project manager should try to have support from the top management and be bold enough to tell them to be open if they have any reservation about the project

Assure that there is a regular communication about progress even in case of invisible progress

To avoid cost and time over run , involve end user 's participation in design and implementation

For the success of a project ensure that the project team has the appropriate communication , technology skills and planning

BIBILIOGRAPHY

1 . Jack Cook , Victoria Semouchtchak 'Lean Object-Oriented Software Development , SAM Advanced Management Journal ,69 . Issue : 2 (2004 12

2 . Geoff Reiss , Program Management Demystified : Managing Multiple Projects Successfully , London , E FN Spon . 1996

3 . J . Davidson Frame , Managing Projects in Organizations : How to Make the Best Use of Time , Techniques , and People , San Francisco Jossey-Bass . 2003

4 . Kaushik Bhaumik , Kishore Kanakamedala , Inigo Amoribieta , Ajay D Parkhe , Programmers Abroad : A Primer on Offshore Software Development The McKinsey Quarterly . 2001

5 . McConnell , Steve , Software projects Survival Guide , Redmond Washington , Microsoft Press (1998

6 . What Went Wrong ? Unsuccessful information technology projects , KPMG (October 31 , 1997 ) HYPERLINK "http /kpmg .com " http /kpmg .com (accessed 4th April , 2006

Article Title : Lean Object-Oriented Software Development . Contributors Jack Cook - author , Victoria Semouchtchak - author . Journal Title : SAM Advanced Management Journal . Volume : 69 . Issue : 2 . Publication Year 2004 . Page Number : 12 . COPYRIGHT 2004 Society for the Advancement of Management

Programme Management Demystified : Managing Multiple Projects Successfully . Contributors : Geoff Reiss - author . Publisher : E FN Spon . Place of Publication : London . Publication Year : 1996 . Page Number 243

Book Title : Managing Projects in Organizations : How to Make the Best Use of Time , Techniques , and People . Contributors : J . Davidson Frame - author . Publisher : Jossey-Bass . Place of Publication : San Francisco Publication Year : 2003 . Page Number : 81

Programmers Abroad : A Primer on Offshore Software Development Contributors : Inigo Amoribieta - author , Kaushik Bhaumik - author Kishore Kanakamedala - author , Ajay D . Parkhe - author . Journal Title The McKinsey Quarterly . Publication Year : 2001 . Page Number : 129

KPMG (4th April , 2006 . What Went Wrong ? Unsuccessful information technology projects ( On -Line

The PROJECT PERFECT . White Collection . 24 /10 /05 Www .projectperfect .com .au . Page 1 of 8 . Why IT Projects Fail . Al Neimat Taimour . Abstract http /www .projectperfect .com .au /info_it_projects_fail .php

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