Why IT Projects Fail


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 According to a recent Gartner study, 59% of IT practitioners say IT projects fail due to a lack of organizational skills – not technical skills. CEDAR has been brought in a number of times by IT organizations looking to correct projects gone wrong. We’ve seen first-hand what the Gartner Study is referring to and have a ground level understanding of the issues -- and how to avoid them before they happen.

Displayed in the chart below, respondents of this study believe that non-technical skills have a large hand in the success of large, complicated IT projects.

                Why projects fail pie chart

 

Interestingly, a McKinsey Oxford study suggests that large IT projects would have a higher success rate and return on investment if they can involve an IT team with strategic and project management skills. The study found that in order to achieve effective IT project management, there must be established and tested processes in place. The chart below also displays other key factors necessary for IT project success, including experienced project managers, proven methodologies and tools, and a qualified project team.

 

CCM Project Success Factors

**Source: McKinsey & Company

Given these stats, how can IT managers better structure their projects for success? 

These studies confirm that IT projects require in-depth knowledge of the project and its purpose. With most of the failure rate associated with the lack of experience in cross-departmental management of IT projects, it’s critical for companies to take a hard look at each project before taking the next step. Rushing in without a solid plan could cost you lost time, cost overruns, and possibly even your job. While these studies didn’t specifically track  job losses associated with project failure, we all know it comes with the territory.

IT projects for customer communications management (CCM) often involve the types of complexity that these studies examined. CCM touches multiple IT platforms systems and functional departments. Cross-functional organizational skills are vital to any highly-integrated CCM solution. A truly seamless solution must be able to interface with multiple systems and communicate across multiple departments, from Finance to Legal to Sales to Marketing. This kind of integration requires a significant depth of experience in cross-functional program management. IT organization responsible for managing this type of project must have a multitude of implementations under their belt in order to fulfill a successful CCM implementation.

This is why many firms seek outsourced expertise for complex IT projects – including CCM solution implementation. Besides cutting costs, outsourcing can minimize risks, prevent unnecessary spending and exponentially increase the success rate of these IT projects. When identifying the right IT support, you need to make sure you look for the right combination of skills. External IT organizations have the technical discipline, the internal resources, as well as specialized project management skills necessary to implement complicated solutions.

Some reasons to consider outsourcing include:

> Alignment of technology and business goals

> Access to experienced specialists

> Ability to augment IT resources

> Rapid and assured deployment of new services

Though the McKinsey study suggests conducting smaller IT projects in order to achieve higher success rates, let’s face it, large projects are inevitable, so it’s important to consider your options.

Consider these steps:

1. Take a realistic assessment of your IT talent

Gartner’s Executive Program CIO survey reports that highly effective organizations account for less than one in eight of all IT organizations. Companies use outdated CCM processes, and often don't have the skill set to integrate these processes across multiple systems and departments. In addition, obtaining IT talent that specializes in new technology advancements and capabilities continues to be a struggle for most businesses. 

2. Take a realistic assessment of your organizational skills and experience 

A successful CCM implementation must involve an IT organization with strong cross-functional, cross-discipline and cross systems team skills. Examine the skill set of your team:

> Do they collectively have years of experience in organizational project management in implementations?

> Are they capable of working with multiple customer communication systems?

> Can they manage your IT project end-to-end with proven strategies and methodologies? 

3. Use your analysis to guide your selection of the right external partner

Outsourcing CCM implementation has benefits that reach far beyond financial costs. Ultimately it provides the assurance that a project will be completed promptly. Outsourcers that make their living doing these types of projects are more than trained to do them right- Failure cannot be an option - at least not for very long. Look for a provider with a long track record. 

Engaging an outsource provider, like CEDAR, can assure a higher degree of project success. Outsource providers possess project management skill and expertise critical to any successful implementation.

So before you conduct another large IT project, think about whether it’s time to invest in more internal IT talent or if outsourcing the project will give you a higher probability for success.

To learn more about The Outsourcing Revolution, download our white paper.