How to identify an IT project at risk of failure

At a time of financial cut backs, the cost of abandoning a project is difficult to ignore. It means a complete write-off of the project budget. And often there is reputational damage, both within the organisation and with customers and suppliers.

In 2003 a research project by Oxford University in collaboration with Computer Weekly found that organisations abandoned 8% of IT projects before they were complete. At the time, not much was made of this data - perhaps the probability of having an abandoned project was too low to raise alarm. With more than 50% of completed projects running over budget, over schedule or under-delivering, IT departments had more pressing issues to worry about.

But a follow-up study has turned the spotlight back on abandoned projects. At a time of financial cut backs in most organisations, the cost of abandoning a project is difficult to ignore. It means a complete write-off of the project budget. And often there is reputational damage, both within the organisation and with customers and suppliers.

I worked on the study with my colleagues, Professors Andrew Gemino, and Blaize Reich of the Simon Fraser University Canada. We collected data from project managers in the UK who read Computer Weekly and from global members of the Project Management Institute's Special Interest Group in IT Project Management. The 250 responses, collected in 2010, showed that the proportion of abandoned projects has stayed roughly constant, at 7%. More significantly, it revealed marked differences between the abandoned projects compared to those that went through to completion.

The research shows that problem projects look very much like successful projects at the beginning. It found no difference in the complexity of the projects or of the number of departments involved. However, organisations reported significantly greater difficulty in establishing the project requirements when projects were later abandoned.

 


 

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These troubled projects also suffered from internal volatility. They had significantly higher turnover rates for project manager, client manager and executive sponsor. On average, in abandoned projects there were three changes of key personnel compared to just one for completed projects. Organisations do replace key staff when projects go off the rails, but the differences are so clear that we conclude that high staff turnover is a key contributing factor to these projects losing their way.

Other critical success factors were in shorter supply in the abandoned projects. Project managers reported that they received less of the necessary resources for the project from the project sponsor. And they used fewer project management methodologies, tools and techniques.

It's hard to know exactly why this is the case but it is easy to imagine a sponsor distancing him/herself from a troubled situation or a project manager struggling to create the processes needed to effectively monitor a struggling project.

Project managers of abandoned projects reported much lower levels of trust between the technologists and business members of the project team. There was less sharing of knowledge in the team, and less support for identifying and developing the information needed to make the project a success. They had less knowledge and less expertise at the start of the project.

The alignment of the technical design with the organisational change plan and the business objectives was poorer in the abandoned projects. Combine this with a perceived disconnect with the business units and it is clear that these projects were ill-equipped to deliver successfully.

The abandoned projects ran on average nine months longer than completed projects, although they were not significantly larger. Perhaps they were left to struggle; perhaps there was hope for success even in the face of indications to the contrary; the answer is difficult to discern from the data. What is clear is that they were not abandoned early.

The data are pretty consistent over time - a small but significant proportion of projects fail to deliver any benefits to the organization. The key issue for businesses is whether they are able to spot these problem cases and act on what they see.

Based on our research and experience, we'd suggest careful attention to three areas:

  • If a project is struggling badly with requirements;
  • If its relationship with the business is poor;
  • If you see key staff leaving.

When your project requires decisive intervention. Step in and either turn it around or cut your losses and abandon it early. Turnaround costs a lot of management time and resources. Abandonment throws away the proposed benefits. But either is better than letting your project drift in the hope that it will come right.

 


 

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