Why Do IT Projects Fail? | Quantsapp Advisory Review

1. Why Do IT Projects Fail? Quantsapp Advisory Review

2. Learning Objectives ?Describe the dominant eras of information systems called the electronic data processing (EDP) era, the micro era, the network era, and the globalization era, and understand how managing IT projects has evolved during these eras. ?Understand the current state of IT project management and how successfully managing IT projects remains a challenge for most organizations. ?Explain the value-driven, socio-technical, project management, and knowledge management approaches that support ITPM. ?Define what a project is and describe its attributes. ?Define the discipline called project management. ?Describe the role and impact IT projects have on an organization. ?Identify the different roles and interests of project stakeholders. ?Describe some common approaches to structured systems development and iterative systems development. ?Describe the project life cycle (PLC), the systems development life cycle (SDLC), and their relationship. ?Describe extreme project management. ?Identify the Project Management Body of Knowledge (PMBOK®) core knowledge areas.

3. IT and Modern Day Project Management 1940s First Electronic Computer 1950s 1960s 1970s 1980s 1990s 2000s 2010s EDP Era PC Era Network Era Globalization

4. Introduction ?Information Technology (IT) projects are organizational investments that require • Time • Money • And other resources such as people, technology, facilities, etc. ?Organizations expect some type of value in return for this investment ?IT Project Management is a relatively new discipline that attempts to make IT projects more successful andcombines traditional Project Management with Software Engineering/Management Information Systems

5. An ITPM Approach ?Organizational resources are limited, so organizations must choose among competing interests to fund specific projects ?This decision should be based on the value a competing project will provide to an organization

6. Which Situation is Worse? ?Successfully building and implementing a system that provides little or no value to the organization? Or… ?Failing to implement an information system that could have provided value to the organization, but was underdeveloped or poorly managed?

7. Why Do IT Projects Fail? ?Larger projects have the lowest success rate and appear to be more risky than medium and smaller projects • Technology, business models, and markets change too rapidly so projects that take more than a year can be obsolete before they are completed ?The CHAOS studies also provides some insight as to the factors that influence project success

8. The Software Crisis ?The CHAOS study published in 1995 by The Standish Group found that although the U.S spent over $250 billion on IT projects, approximately… • 31% were cancelled before completion • 53% were completed but over budget, over schedule, & did not meet original specifications • For mid-size companies, average cost overruns were 182%, while average schedule overruns were 202%!

9. Has the Current State of IT Projects Changed Since 1994? ?The Standish Group has continued to study IT projects over the years. ?In general, IT Projects are showing higher success rates due to • Better project management tools & processes • Smaller projects • Improved communication among stakeholders • More skillful IT project managers ?But there is still ample opportunity for improvement!

10. Figure 1.1 - Summary of the Chaos Studies from 1994 to 2006 Successful Failed Challenged

11. Table 1.1 Summary of CHAOS Study Factor Rankings for Successful Projects Sources: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) &hCp://www.infoq.com/arGcles/Interview-Johnson-Standish-CHAOS Rank 1994 2001 2006 1 User Involvement Execu:ve Support User Involvement 2 Execu:ve Management Support User Involvement Execu:ve Management Support Clear Statement of Requirements 3 Experienced Project Manager Clear Business Objec:ves 4 Proper Planning Clear Business Objec:ves Op:mizing Scope 5 Realis:c Expecta:ons Minimized Scope Agile Process Standard SoFware Infrastructure 6 Smaller Project Milestones Project Management Exper:se 7 Competent Staff Firm Basic Requirements Financial Management 8 Ownership Formal Methodology Skilled Resources 9 Clear Vision & Objec:ves Reliable Es:mates Formal Methodology Standard Tools and Infrastructure 10 Hard-working, focused team Other

12. Table 1.2: Project Performance and Internal/External Customer SaJsfacJon. Source: Marchewka, J.T. (2008). n = 114. Much Worse Much BeHer Worse Same BeHer Ability to meet project schedules Ability to meet project budgets 0.0% 12.3% 40.4% 41.2% 6.1% 1.8% 10.5% 44.7% 37.7% 5.3% IT Project Performance Over the Past 3 Years Ability to complete project scope or system requirements 2.6% 7.0% 41.2% 41.2% 7.9% Overall sa:sfac:on of the customer 1.8% 13.2% 34.2% 39.5% 11.4% Customer saJsfacJon over the past 3 years (Customers can be internal – e.g., HR department or external – e.g., a parJcular client) Perceived value of the delivered product to the customer 0.0% 9.6% 39.5% 38.6% 12.3% Poten:al for future work with the customer 0.9% 3.5% 42.1% 38.6% 14.9%

13. Table 1.3: Summary of Factor Rankings for Challenged and Failed (Impaired) Projects Source: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) Rank Factors for Challenged Projects Factors for Failed (Impaired) Projects 1 Lack of user input Incomplete requirements 2 Incomplete requirements Lack of user involvement 3 Changing requirements & specifica:ons Lack of resources 4 Lack of execu:ve support Unrealis:c expecta:ons 5 Technology incompetence Lack of execu:ve support 6 Lack of resources Changing requirements & specifica:ons 7 Unrealis:c expecta:ons Lack of planning 8 Unclear objec:ves Didn’t need it any longer 9 Unrealis:c :me frames Lack of IT management 10 New technology Technology illiteracy

14. Tata Consultancy Services 2007 Report ?Included 800 senior IT managers from the UK, US, France, Germany, India, Japan, & Singapore: • 62% of the IT projects failed to meet their schedules • 49% experienced budget overruns • 47% experienced higher-than expected maintenance costs • 41% failed to deliver the expected business value and ROI

15. Improving the likelihood of success ?A Value-Driven Approach • Plain & Simple: IT Projects must provide value to the organization ?Socio-technical Approach • It’s not just about the technology or building a better mouse trap ?Project Management Approach • processes and infrastructure (Methodology) • resources • expectations • competition • efficiency and effectiveness ?Knowledge Management Approach • lessons learned, best practices & shared knowledge

16. The PMBOK® Guide’s Definitions for Project and Project Management ?A project is a temporary endeavor undertaken to create a unique product, service, or result. ?Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Managing a project includes: • Identifying requirements • Establishing clear and achievable objectives • Balancing the competing demands for quality, scope, time, and cost • Adapting the specifications, plans, and approaches to the different concerns and expectations of the various stakeholders

17. The Triple Constraint Figure 1.3

18. The Project Life Cycle and IT Development ?Project Life Cycle (PLC) • A collection of logical stages or phases that maps the life of a project from its beginning to its end in order to define, build, and deliver the product of the project – i.e., the information system ?Projects are divided into phases to increase manageability and reduce risk • Phase exits, stage gates, or kill points are decision points at the end of each phase to evaluate performance or to correct problems or cancel the project • Fast tracking is the overlapping of phases to reduce the project’s schedule • Can be risky!

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