Showing posts with label Black Swan. Show all posts
Showing posts with label Black Swan. Show all posts

August 28, 2011

Can't Live With Them, Can't Live Without Them

I remember years ago, my father used to joke about my mother (who occasionally got on his nerves :-): "you can't live with them, and you can't live without them."

Following the frequently dismal state of IT project performance generally, I'm beginning to think that way about technology projects.

On one hand, technology represents innovation, automation, and the latest advances in engineering and science--and we cannot live without it--it is our future!

On the other hand, the continuing poor track record of IT project delivery is such that we cannot live with it--they are often highly risky and costly:
  • In 2009, the Standish Group reported that 68% of IT projects were failing or seriously challenged--over schedule, behind budget, and not meeting customer requirements.

  • Most recently, according to Harvard Business Review (September 2011), IT projects are again highlighted as "riskier than you think." Despite efforts to rein in IT projects, "New research shows surprisingly high numbers of out-of-control tech projects--ones that can sink entire companies and careers."

  • Numerous high profile companies with such deeply problematic IT projects are mentioned, including: Levi Strauss, Hershey's, Kmart, Airbus, and more.

  • The study found that "Fully one in six of the projects we studied [1,471 were examined] was a black swan, with a cost overrun of 200% on average, and a schedule overrun of almost 70%."

  • In other words there is a "fat tail" to IT project failure. "It's not that they're particularly prone to high cost overruns on average...[rather] an unusually large proportion of them incur massive overages--that is, there are a disproportionate number of black swans."

  • Unfortunately, as the authors state: "these numbers seems comfortably improbable, but...they apply with uncomfortable frequency."
In recent years, the discipline of project management and the technique of earned value management have been in vogue to better manage and control runaway IT projects.
At the federal government level, implementation of such tools as the Federal IT Dashboard for transparency and TechStats for ensuring accountability have course-corrected or terminated more than $3 billion in underperforming IT projects.
Technology projects, as R&D endeavors, come with inherent risk. Yet even if the technical aspect is successful, the human factors are likely to get in the way. In fact, they may be the ultimate IT "project killers"--organizational politics, technology adoption, change management, knowledge management, etc.
Going forward, I see the solution as two-pronged:
  • On the one hand we must focus on enhancing pure project management, performance measurement, architecture and governance, and so on.

  • At the same time, we also need to add more emphasis on people (our human capital)--ensuring that everyone is fully trained, motivated, empowered and has ownership. This is challenging considering that our people are very much at a breaking point with all the work-related stress they are facing.
These days organizations face numerous challenges that can be daunting. These range from the rapid pace of change, the cutthroat global competition at our doorsteps, a failing education system, spiraling high unemployment, and mounting deficits. All can be helped through technology, but for this to happen we must have the project management infrastructure and the human factors in place to make it work.

If our technology is to bring us the next great breakthrough, we must help our people to deliver it collaboratively.

The pressure is on--we can't live with it and we cannot live without it. IT project failures are a people problem as much as a technology problem. However, once we confront it as such, I believe that we can expect the metrics on failed IT projects to change significantly to success.

(Source Photo: here)