We have all read the headlines about failed IT projects which appear to be endemic in all industry sectors from financial services to telecoms, but why do we keep reading about these problems? The simple reason is we are not getting the basics right. Unless we all change what we do, and in particular how we manage these projects we cannot expect success.
Better team work
Many suppliers and customers have internet teams and advisers who negotiate deals on their behalf. In most cases the team negotiating the deal is not the same as the delivery team. The difficulty is that the delivery team suddenly inherits a complex contract with little or no background knowledge to what was negotiated and why. The initial aims of the transaction and why particular structures were chosen has not been communicated and therefore the history is lost and the route to the goals is no longer clear. In an outsourcing deal this happens in the transition phase, which is the riskiest point. The more complex the deal is, the greater the need for a coherent and smooth transfer between the deal and delivery teams.
Stick to your long term goals
Project sponsorship and consistent long term goals are fundamental if a project is to succeed. The temptation to tinker with things leads to a culture where customers shift their ground and either undermine their own position or make the whole deal untenable. Yes, mistakes are made on transactions and yes, some deals will need to be re-negotiated or unpicked. If a major change is required then the CIO should be sanctioned by the board to ensure that the corporate objectives and goals are still being met.
Purpose first, structure second
Much is made of the need to establish why companies outsource or carry out other transactions. Clearly the deal should reflect that commercial purpose. However, astonishingly, mechanisms in contracts often completely cut across that commercial purpose. For example, if you want to reduce costs, incentivising the supplier to save costs by sharing the savings is a better solution than seeking all the benefit of all that saving yourself. Leaving a supplier to seek an acceptable amount of profit from a far smaller cash flow can only mean a reduced service.
Fester or fix?
Many problems are made worse by being left to fester. What started as a small issue becomes critical and positions become entrenched because insufficient focus was given to it at the outset. Opportunities to use some of the less aggressive tools to steer the project back on track will have disappeared. Delivery teams need to be trained on how best to handle issues of this type before the litigators are called in.
All of these issues are symptomatic of a lack of team work. None is inherently difficult to deal with, but the amount of attention paid to these issues remains remarkably low. If businesses are going to invest in IT projects and maximise their chance of success, they need to spend time ensuring that they are not doing tomorrow what they did yesterday.
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