Pravin Dabhi, PMP, PMI-ACP and Vanessa Saulsberry contributed to this article
Not all organizations fully understand the value of effective project management. Indeed, over half of IT projects fail. That’s a staggering percentage considering how important IT projects are in delivering real business value to the organization and its stakeholders. Nevertheless, many project management executives don’t know how their projects align with their company’s business strategy. The good news is that the rate of project success is on the rise. According to Project Management Institute, even though today’s companies still meander $97 million on average per $1 billion invested – it’s a sizable decline (20%) compared to the year prior.[i]
When user experience, revenue, and reputation are on the line, it’s vital that companies get it right. Some companies know all too well the woes of project failures. In 2009[ii], RBS’s customers were locked out of their accounts for two weeks following a botched software update. In 2013 the healthcare.gov rollout failed to sign up the majority of Americans who tried to enroll ahead of the impending deadline[iii] What about Hershey’s not-so-sweet ERP project that caused an eight percent dip in its stock price?[iv] You get the point. IT failures have long been the subject of many articles, keynote speeches, research studies, and the like. In this post, we examine eight of the key drivers to IT project success.
W. Clement Stone writes, “Definiteness of purpose is the starting point of all achievement.” We all know that projects start with inputs which in turn generate outputs. But we seldom distinguish between outputs and outcomes/impact. Imagine a project in which we build a bridge. Building a bridge that is ready for use is an output – a short-term goal. Building that bridge so that it generates millions in revenue for the state, and reduces traffic jams is an outcome or the long-term impact. Intended or consequence, knowing your projects short- and long-term goals are crucial to success. As such, it is the very first driver we address:
- Identifying short- and long-term goals: Some projects are meant to bear fruit immediately, and others ramp up in value. For example; let’s say that one of your projects is to add business intelligence (BI) and predictive analytics to your current data analytics system. The other one is a project to build a mobile application for an upcoming tradeshow. The goal of the embedded application project is apparently long term, while the main goal of the mobile app is short term. The outcome/impact of the mobile app may be positive because if people fall in love with the experience and rave about it for years to come, that’s an added benefit. The short-term goal is to engage attendees; keep them informed, organized, and connected throughout the live event. According to Project Management Institute, only 64% of projects meet their goals. It would seem that a good portion of that outcome is due to either misinterpreted or misguided goals.
- Insufficient planning: Benjamin Franklin writes, “If you fail to plan, you are planning to fail.” 39% of IT projects fail due to lack of sufficient planning. The valuable time you put into planning your project at the outset will help guide the execution of phases seamlessly and make provisions for managing time, cost, quality, change, risk, and more. Brian Tracy writes “Every single minute of planning saves 10 minutes in execution, yielding a 100% return on energy”.
- Scope creep: “Projects are like icebergs; it's easy to see the third above the water, but it's the two-thirds below that sink the ship”—Eave Capital. We’ve all been there. Misunderstandings or last minute additions which, by the way, are “nice-to- haves” versus “essentials,” are often due to poor requirements gathering. Upon a thorough assessment, however, some changes bring much more value to the final deliverable and are worth pursuing. As such, developing a flexible change-management plan is vital.
- Inadequate leadership: A recent IndustryWeek article identified three types of leaders: One-Step-Ahead Managers, Two-Steps-Ahead Managers, and Three-Steps-Ahead Managers. The premise is that the unique leadership qualities found in each of these leader types (from the risk-averse tweaker to the risk-taking visionary) are all necessary qualities for effective leadership, especially when attempting to implement significant change. At the same time, someone who holds a position of leadership is not necessarily a good leader. Some leaders lack the interpersonal and motivational skills to rally team members and provide the necessary direction. They tend to be more focused on executing tasks versus overseeing the project and ensuring measures are in place for success.
- Poor communication: Communication is a core competency for organizations. All stakeholders should feel as though they have a voice in the project’s outcome. Listening to and addressing their concerns, where feasible, promotes transparency and aids in problem-solving and decision-making. According to a study conducted by PMI, poor communication is one of the most important factors responsible for project failure and ranks second to poor planning. When executed poorly it can polarize project teams and its stakeholders, leaving the project doomed for cost overruns, rework, and even worse—failure.
- Conflicting priorities: Companies must identify which projects will bring the most value to the organization and its stakeholders, and then make those a priority[v]. Working on a project for the sake of checking it off your list is a waste of time, energy, and resources. Instead, coordinate with business leaders, who are sensitive to the needs of the organization and customers, and then assess the business impact of each project on your list. Be sure to involve your CIO early on in the project so that he or she can help align the project outcomes to the strategic goals of the organization.
- Stakeholder management: Stakeholders have a vested interest in the project. A project is only successful when objectives and expectations of its stakeholders are met. Typically, the more stakeholders involved in your project, the more complex and stressful it becomes. Earlier we mentioned keeping the lines of communication open for stakeholders throughout the project. It is equally important to create a process by which ideas can be vetted properly for either inclusion in the current project or reserved for a later date. The criteria outlined below is essential to managing stakeholders effectively:
- Interpret their expectations
- Define clear success criteria
- Accurately assess their influence
- Keep them involved and informed
- Resource misalignment/overallocation: Assembling the right team with the right capabilities, experience, and skill sets is critical. PMI found that less than one in three companies currently prioritize the continued development of technical, leadership, or business skills, rendering most teams ill-equipped to manage complex technology projects. Overallocation is another issue for organizations looking to embrace new technology for competitive advantage. There are just too few people participating in too many projects, snuffing out any real chance of success. When this happens, it not only dampens team morale, it creates a lot of undue stress. Outsourcing your IT project might be a feasible option as long as they have experience within your particular industry and follow an agile methodology for speed and flexibility. Indeed, 75% of highly agile organizations met their goals/business intent, 65% finished on time, and 67% finished within budget, according to PMI.
So what does all of this mean? At a high level, leading companies are leveraging technology to transform every corner of their businesses and are driving positive outcomes as a result. To achieve this IT projects must receive the proper oversight to bring tangible value to the organization, its stakeholders, and customers. We recognize eight key drivers of IT project success ranging from effective planning to transformational leadership. Most importantly, industry-specific challenges and nuances require seasoned project teams with an agile approach to delivery. Daily tasks and activities, stakeholder engagement, and continued innovation are crucial for navigating large-scale IT initiatives, as is salience in understanding and advising on complex requirements. When in-house projects stall or never get off the ground, a trusted service provider can step in to help busy executives navigate the technology landscape. A good strategic IT partner will keep your implicit and explicit needs at the center of its approach to ensure your project’s success and long-term business outcomes. The end goal is to be able to answer yes to the most important questions. Does it meet the intended scope? Did we stay on or around the budget? Was it delivered on time? Does it provide the organization and its stakeholders the intended value?
For a deeper dive on this topic download our latest e-book which includes more advice for bringing the best out of your IT teams: 8 Tips for IT Projects That Don't Flop