One common contributor to the failure those complex projects is that Top Management often delegates the ownership to middle management or even the IT department believing that everything can be taken care of by the experts.
Here some reasons, how Top Management involvement in IT projects can appear to be crucial to the success of IT initiatives.
I. Are we climbing the wrong mountain
Business is moving fast, but IT projects usually don’t. Business Leaders often believe that their people understand the current business strategy and even more important, changes to it. If the IT project team is not well informed about any strategy or organization changes, they may build the system on obsolete assumptions.
Example: A retailer developed a new POS for their 10,000 branches based on the assumption that most of the branches have only dial-up access to connect to the Internet. In the meantime, Top Management changed the strategy to change the format of all small branches to a partner model which made the dial-up requirement obsolete. The IT project team learned about this strategic change about six months after the decision has been made.
II. A Porsche to reach the next Soi
Often IT firms don’t have business consultants and therefore derive most systems requirements by interviewing users. Users naturally - as they don’t have to pay for the system - request the IT developer to build their d ream system. As a result, specifications are becoming very complex which leads to inflated costs for the project, change management and system maintenance. Top Management plays an important role by asking people about real net business value of key requirements.
Example: A logistics company implemented a new inventory system. A new product category added so many requirements to the project, that standard software couldn’t cope with the complexity of this product. The project team already started building the complex requirement when Top Management discovered by chance that the expected gross profit of the new category will be less than the additional costs to the IT system. Top management decided to discontinue the new product.
III. IT value stuck in company politics
Implementing IT systems is very complex as mostly aims to impact end-to-end business processes across multiple departments. If you ask experienced Project Managers, they will admit that most of the project issues are people issues rather than IT issues as they are dealing with many different stakeholders. Often, Project Managers can’t resolve people issues by themselves, because they are too low in the company hierarchy. Therefore, strong leadership from Top Management is required to back up the Project Manager.
IV. You don’t get your money back
As Software licenses became more affordable during the last couple of years, I believe that in many cases the major losses of failed IT projects are opportunity costs rather than inflated project costs. For IT teams work often finishes when the “system is readily installed on the server and users run through a basic system training”. But does this mean that the system really generates value to the organization?
Example: When we develop IT strategies, we gather the current IT systems inventory first. We often discover applications that are available to the organization, but hardly used by anybody. Reasons range from incomplete system setup, insufficient training or simply users don’t know that this system exists.
Therefore, when approving budget for IT investments, Top Management should define the project objectives in terms of achieving real business value rather than deployment of the system only. The project team should include all necessary means to achieve real business value into their project plans (e.g. process reengineering and change management) and should not be released from their duties before those benefits haven’t been achieved.
Consequently, if you plan to invest significantly into IT systems and boost your future competitiveness then take a closer look. It’s well invested time, as you may not only increase the effectiveness of your investments, you will also ensure that your systems are well utilized for the benefit of the company.