The Dirty Half-Dozen

The Dirty Half-Dozen

Six ways IT projects fail - and how you can avoid them.

Stop the presses: IT projects fail OK, so you knew technology initiatives have been giving corporations fits. You may have read some harrowing numbers: fewer than a third of IT projects (a lot less, some say) are completed on time, on budget and with the promised functionality. Today, IT is so tightly woven into the fabric of the organisation that technology projects, successful or otherwise, reflect on the entire senior management team. "Global financial companies are spending 20 per cent to 40 per cent of their revenues on IT," says Thornton May, chief awareness officer and corporate futurist at Massachusetts-based Guardent. "If your management team is not facile at managing it, your board is guilty of malfeasance."

With such high stakes, it's no wonder lawsuits are now a routine part of the IT landscape - especially where outsourcers and system integrators are concerned. "For the typical contract IT operation, the ongoing cost of litigation is part of the budget," says Tom DeMarco, principal of the Atlantic Systems Guild, a technology consultancy. DeMarco often serves as an expert witness in IT-related suits. To illustrate the magnitude of current IT-project litigation in the US, he recalls a recent visit to the headquarters of a large system integrator, which he declines to name. "It's working on maybe 75 cases," he says. DeMarco has estimated that businesses can spend up to 15 per cent of their IT budget on such litigation.

Another expert, Wayne Bennett, an attorney at Boston-based Bingham Dana who often handles major IT contracts, finds it harder to pin a price tag on IT disasters, partly because their effects are so broad. In addition to money paid to vendors, integrators and consultants, Bennett says, the major components of an IT failure are time ("You get two-thirds through a project and find you've wasted 18 months working on the wrong solution," he says) and opportunity cost - that is, the potential competitive advantage you've blown by not working on the right solution.

IT projects offer unique obstacles. "You're doing something with technology that often hasn't been proven," says Stanley Portny, a trainer, consultant and author based in New Jersey. "And IT projects tend to touch so many parts of the organisation that it's hard to appreciate how pervasive they are."

To avert disaster, make your IT projects manoeuvre around these landmines.

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