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Written by: Hipatia Medina-Ágreda

IT hiccups and how to stop them without holding your breath or breathing into a paper bag

In the evolving world of technology, IT Management Projects are crucial for business growth and innovation. However, the high rate of failures in these projects is alarming, with the latest Standish Group's CHAOS Report 2020 indicating that only about 31% of IT projects succeed. This blog explores the common reasons for IT project failures, their impact, and how effective IT consulting can turn the odds in favor of success.

In the evolving world of technology, IT Management Projects are crucial for business growth and innovation. Yet, the high rate of failures in these projects is alarming. The latest Standish Group’s CHAOS Report 2020 states that only about 31% of IT projects succeed, while the remaining 69% either fail or are challenged (Portman, “Review”). The Gartner Group corroborates this statistic and adds that “on average 51% exceed budget by 189% while only delivering 74% of the originally stated functionality” (Meyer, “The top 10”).

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Apendix 1. Based on CHAOS 2020: Beyond Infinity by Jim Johnson.

This blog explores the common reasons for IT project failures, their impact, and how effective IT consulting can be in turning the odds in favor of success.

1. Common causes of IT project failures

Understanding why projects fail is the first step towards preventing them. According to the CIO’s report on IT project failures by Mary K Pratt, the primary causes include:

  • Poor planning and management: Lead to unrealistic timelines, delays, additional tasks, and budget overruns
  • Lack of clear objectives: Leads to confusing and unachieved expectations
  • Inadequate communication: Communication breakdowns between stakeholders and team members cause misunderstandings and delays
  • Insufficient risk management: Failure to identify and mitigate potential risks can derail a project at any stage

2. The impact of IT project failures

The repercussions of failed IT projects can be severe, affecting both the financial aspect and operational efficiency of organizations. KPMG’s Project Management states that “70% of organizations have experienced at least one project failure in the past year” (“Survey”). As a matter fact, the Harvard Business Review reports that failed IT projects cost companies billions annually in budget overruns and lost opportunities, as we can see in the following case studies in the article “Why Your IT Project May Be Riskier Than You Think” by Bent Flyvbjerg and Alexander Budzier:

  • “Hershey’s shift to a new order-taking and fulfillment system prevented the company from shipping $100 million worth of candy in time for Halloween, causing an 18.6% drop in quarterly earnings.”
  • Kmart “launched a $600 million project to update its supply chain management software. That effort went off the rails in 2002, contributing to Kmart’s decision to file for bankruptcy that year.”
  • The German government implemented a software “to help collect tolls from heavy trucks on roadways. The developers struggled to combine the different software systems, and in the end the project cost the government more than $10 billion in lost revenue.”

3. Lessons from high-profile IT project failures

Examining high-profile IT project failures provides valuable lessons, as seen in the following highlights of several significant failures:

  • The initial rollout of Healthcare.gov was overwhelmed by technical issues and lack of testing, leading to a highly publicized failure. The Affordable Care Act signed by President Obama in 2010 required to launch HealthCare.gov. Due to lack of leadership and experience, high traffic crashed down the site within two hours of launching and only six people were able to choose a plan. The initial budget of $93.7M increased to $1.7B to get these issues fixed (“The Failed,” 2016).

  • Meanwhile, IBM’s poorly managed census project that suffered from inadequate planning and technical failures, resulting in data loss and public backlash, costed $30M to Australian taxpayers. At the end, IBM had to reimburse the Australian government millions, the amount was not disclosed (Hutchens, “IBM”).

A rigorous testing before deployment can prevent issues. In addition, a strong communication channel ensures that all stakeholders are aligned and informed, reducing misunderstandings. These findings are pointing us toward a whole new approach to project management. It’s all about ramping up our skills like communication and knowing the ins and outs of the industry, such as power skills and business know-how.

Hence, choosing the right project management approach is key in succeeding; it can be overwhelming trying to select from an agile method, a hybrid approach, or a predictive methodology. According to PMI Pulse of Profession 2024 Report, “Information technology (55%), healthcare (53%) and financial services (53%) are most likely to use hybrid approaches” (8); However, there isn’t just one formula “how this blend looks will vary depending on factors like the project type (product, service, software, etc.), business environment, team dynamics, and more, as the previous report states (9). An IT Consultant can provide the necessary expertise and objective guidance to navigate challenging projects effectively.

4. The role of IT Consultants in preventing project failures

IT consultants play a pivotal role in steering projects towards success. Consultants bring expertise and an objective perspective that can be crucial in complex projects. Their unbiased assessments and suggestions come without any hidden agendas providing an objective analysis. Overall, IT consulting provides a strategic advantage by leveraging external expertise, objective analysis, and effective risk management to drive business success.

Benefits of IT Consulting:

  • Concentrate on core business functions: Employees excel when they focus on their primary strengths. By engaging an IT Consultant, your staff can dedicate their time to their essential tasks

  • Benefit from specialized assistance: Utilizing an IT Consultant means tapping into the expertise of professionals who have worked on projects similar to your current needs. Knowing that your business is guided by an industry expert not only provides assurance but also enhances the prospects of achieving success

  • Gain fresh insights into operations: Bringing in an IT Consultant offers a new viewpoint based on their experience across various projects and industry standards, enabling your organization to foster growth and streamline operations

  • Cost-effectiveness: Engaging an IT Consultant for addressing specific challenges within a defined timeframe allows for a more efficient and economical use of resources

  • Boost productivity and efficiency: IT Consultants specialize in leveraging new technologies to enhance productivity and streamline operations, making them invaluable assets for companies aiming to improve efficiency

  • Leverage experience and expertise: Identifying opportunities to streamline business processes requires insights gained from prior projects with similar features, highlighting the importance of leveraging the experience of IT Consultants

  • Access to diverse knowledge: IT consultants offer access to broader knowledge

When IT projects go south, they can really hit your wallet and disrupt everything. Consider a scenario where a building is erected without the guidance of architects, blueprints, or other essential tools for project success. How many of these structures would withstand the test of time?

5. This is US! We thrive on Excellence, Honesty, Accountability, and Community

Teaming up with an experienced IT Advisor can provide the fundamental know-how and impartial advice needed to transform your IT challenges into avenues for advancement and accomplishment.

Inside View Global prioritizes value and precision. We consciously implement IT solutions after thoroughly understanding your organization’s goals and objectives. Our proactive approach ensures that solutions align with your needs, mitigates risks, maximizes efficiency, and reduces financial losses. We are dedicated to surpassing industry standards through the application of proven architectural principles and patterns, ensuring reliability and innovation in every solution we deliver. By forging strong partnerships, we aim to catalyze success and establish ourselves as the premier choice for transformative IT consulting services across Canada and beyond.

Our approach in four steps and four weeks:

  • Your Vision: You know your business inside out –your pain points and your goals. Let’s make your vision a reality together. IT should empower, not control

  • Sustainable: We’re all about lasting solutions that truly meet customer needs. Forget the trendy tech fads. Our goal? Keep it simple, effective, adaptable, and user-friendly for the long haul

  • Our Expertise: With experience ranging from point-of-sale operations to global rollouts, we are familiar with a wide range of challenges. Our expertise is committed to helping you achieve your desired outcomes, no matter how complex they may appear

  • Scalable: Our solutions are built to scale with your business. As you grow, we’ve got you covered. Plan for success with solutions that evolve alongside you

We’re all about helping you overcome those obstacles and come up with solutions that work. Our guiding principles revolve around passionate excellence, where every team member is fueled by a genuine love for their work, seeking growth and embracing challenges. We prioritize accountability, taking ownership of our actions and commitments, while upholding honesty and transparency. Empathy guides our interactions with both customers and colleagues, fostering understanding and connection. Through a sense of community, we work together towards common goals, amplifying our impact. Our unity is characterized by loyalty, collaboration, and mutual respect, nurturing strong bonds and shared objectives among team members and clients.

Contact us today and let’s turn those IT challenges into opportunities for big wins!

Bibliography:

“The Failed Launch of www.healthcare.gov.” Harvard Business School Case Collection, 18 Nov. 2016.
Flyvbjerg, Bent, and Alexander Budzier. “Why Your IT Project May Be Riskier Than You Think.” Harvard Business Review, 2011. Gartner Research Report. Gartner, 2023.
Hutchens, Gareth. “IBM Has Paid Many Millions for Census Debacle, Says Turnbull.” The Guardian, 25 Nov. 2016.
Johnson, Jim. CHAOS 2020: Beyond Infinity.
”Survey.” KPMG. Project Management Survey. KPMG, 2019.
Meyer, Pieter. “The Top 10 Reasons Why Projects Fail.” ITWeb, GijimaAst, Johannesburg, 11 Jul 2001.
PMI. Pulse of the Profession 2024 Report.
Pratt, Mary K. “Why IT Projects Still Fail.” CIO, 16 Oct. 2023.
Portman, Henny. “Review: Standish Group CHAOS 2020 Beyond Infinity.” Henny Portman’s Blog, 6 Jan. 2021.

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