August 9, 2008

IT Project Failures and Enterprise Architecture

Based on a number of studies done in the last 10 years (such as The KPMG Canada Study, The Chaos Report and others), it has been established that more than 50% of IT projects fail outright!

Why do IT projects fail? More often than not, it’s because managing IT has become a by the seat of the pants proposition—where things get decided by gut, intuition, politics, and subjective management whim. And we know that is not how to manage IT.

The way to make order out of IT project chaos is through enterprise architecture and IT governance.

EA is how we plan IT, synthesizing business and technology information, and driving business process reengineering, improvement, and the introduction of new technologies.

Governance is how we administer structured, consistent, and collaborative decision making, so managing IT is no longer a black box affair.

Together EA and IT governance provide for sound IT investment decision making, where EA serves as a strategic information asset to guide and influence capital planning and investment control activities of select-control-evaluate to ensure more successful IT project delivery.

Interestingly enough, Federal Times, 4 August 2008, corroborates the true high failure rate of IT projects.

According to the GAO, “Baseline adjustments hide the truth on OMB’s IT projects.”

“OMB considers a project to be over budget and off schedule [i.e. at risk] if it is projected to miss its targets by more than 10 percent.”

The reason though that all the IT projects missing the mark don’t show up on the OMB high-risk list is that “nearly half of the 180 IT projects surveyed by GAO have been rebaselined at least once. Of those, half were rebaselined twice and 11 percent were rebaselined four or more times,” according to David Powner GAO’s director of IT management issues.

What exactly does rebaselining mean?

“Nearly all of the rebaselined projects altered their cost and schedules because of changes in requirements or funding,” according to Karen Evans, OMB’s IT administrator.

So, if your changing the projected IT cost and schedule to match the actual—well then guess what? Naturally, more of your IT projects magically seem to meet their cost and schedule goals, and the true IT project failure rate is obscured.

Note that OMB is only looking at cost and schedule overruns and that doesn’t even take into account missing the mark on IT project in terms of performance parameters—one of the most important aspect of IT projects true success.

Perhaps, if we focus more on truly investing in better enterprise architecture and IT governance, then organizations wouldn’t need to rebaseline their cost and schedule projections to make for faux IT project success.


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