IT deployment: A matter for top management

On a worldwide basis, between 50 and 80 per cent of all information technology implementation projects, including enterprise resource planning and customer-relationship management systems, fail to meet their business, quality, cost or time objectives.

This number has not changed even though technology and implementation methodologies have advanced significantly over the last decade.

A common factor that contributes to the failure of complex IT projects is that top management often delegates the ownership to middle management or even to the IT Department, believing that everything can be taken care of by the so-called experts.

The project is then viewed narrowly as an "IT Project"; it doesn't get the right level of commitment and executive attention to make it successful by controlling scope and removing potential organisational barriers.

Having the right executive sponsor or owner for a major IT project can significantly increase its chances of success. High-level backing can, at very least, provide guidance to the following questions, if not direct answers.

Are we climbing the wrong mountain?

Business is moving fast, but IT projects usually don't. Business leaders often believe that their people understand current business strategies and more importantly, that they understand changes to those strategies. However, if the IT project team is not well informed about strategy or organisational changes, they may build the system based on obsolete assumptions.

For example, a retailer developed a new point-of-sale solution for its 10,000 branches based on the assumption that most of the branches had only dial-up access to the Internet. In the meantime, top management changed the format of all small branches to a partner model which made the dial-up requirement obsolete. The IT project team learned about the strategic change about six months after the decision had been made, wasting a significant investment of time and effort in building the functionality.

Are you using a Porsche to cross the street?

IT firms don't often have business consultants and therefore learn about most systems requirements by interviewing users. Because the cost doesn't come from their own pockets, users tend to ask the IT developer to build the system of their dreams. As a result, specifications are very complex, leading to inflated project costs and greater demands for change management and system maintenance. Top management can play an important role by asking about the real business value of system requirements.

For example, a logistics company implemented a new inventory system. However, the introduction of a new product category added so many requirements and such complexity that a standard software package couldn't cope. The project team had already started to build the complex requirements when top management discovered by chance that the expected gross profit of the new category would be less than the additional costs of modifying the IT system. The new product was discontinued.

Is the value of the IT project stuck in company politics?

Implementing IT systems is very complex because they typically impact end-to-end business processes and affect people across multiple departments. Experienced project managers will tell you that most project issues are people issues rather than IT issues because they are dealing with many different stakeholders. Often, project managers can't resolve people issues by themselves because they don't have the authority or the influence to do so. Therefore, strong leadership from top management is required to back up the project manager.

Will you get your money back?

Software licences have become more affordable over the past couple of years, so I believe that in many cases, the major losses of failed IT projects are opportunity costs rather than inflated project costs. For IT teams, work often finishes when "the system is installed, configured, tested and the users have completed basic system training". But does this mean that the system will really generate value?

For example, when we develop IT strategies, we first gather an inventory of the current IT systems, and in doing so we often discover applications that are available, but are hardly used by anybody. The reasons range from incomplete system set-up to insufficient training or users simply not knowing that a particular system exists.

When approving budgets for IT investments, top management should define the project objectives in terms of achieving real business value, rather than simple deployment of the system alone. The project team should aim to define and measure real business value into their project plans - covering such things as process reengineering and change management - and should not be released from their duties before those benefits have been achieved.

If you are planning significant investment in IT systems to boost your future competitiveness, then take a close and careful look at the above factors. The time it takes may be well worthwhile, as you may not only increase the effectiveness of your investment, but you will also ensure that your systems are well used for the benefit of the company.

Peter Theisen is the business-consulting director at Freewill Solutions.