Technical projects. We all have them going on right now in our businesses. As business owners we want and need our businesses to run smoother, faster and our employees to be more productive. With that, we often turn to technology to help us with this goal of being more efficient and to work more effectively. As business owners we have all been in the situation where we had technology based projects that went great and we see huge rewards from them. We have also had them where they don’t go so well or the results were not what we expected. So then what? We have all thought to ourselves or in some way expressed our thoughts of how long do you stay with an IT project that is failing? What caused it to fail? Then at what point do we just abandon the project altogether if success is this difficult and is going to cost so much.
According to ZDNet, a technology research firm, 68% of technology projects fail. This is alarming based on the cost and impact that technology has on our businesses today. The reasons behind such a high failure rate would make you think the reasons are fairly obvious. However, it seems to allude most business owners. The number one reason technology projects fail starts with a poor business analysis and business justification around the needs and objectives of the project to begin with. That is often followed up with the ownerships unwillingness to accept the results because a course of action had previously been determined regardless of the analysis results. I routinely coach and encouraged our clients to go through a detailed and sometimes painful business discovery process before they ever talk to a vendor about technology based projects. To really understand the needs of your business, and to have the ability to explain your business practices to others that may not be familiar with your business operations, it is imperative to go through a needs and features analysis. It has always amazed me how much business owners actually don’t know about the true operational processes within their company. This basic discovery and documentation process on how your business operates today will help you discover, define and manage how you want your business to grow in the future.
The second most common reason technology failures happen according to ZDNet is due to the competency level, expertise and experience of the team members who are involved. Technology project success is heavily reliant on the team’s ability to gather, analyze, prioritize and interpret the data collected throughout the process. Along with the ability to remain objective in the overall process and with having the ability to trust and accept the results of the analysis. In my more than 30 years of coaching clients through this process another hurdle that you often have to overcome is what I call the trusted advisor syndrome. As owners we all have those people we trust to give us advice and we often place them in roles that give them a lot of exposure to the overall operations of our businesses. These trusted advisors are a necessary role that often keeps our business running and allows us owners to focus on building the business verses running the business. However, as owners we have to have an understanding of the overall expertise of our trusted advisors. Know their limitations, and what is their experience and frequency of selecting, managing and implementing technology based products to a successful completion? We want to believe that these trusted advisors have the skill level and understanding to lead and guide this project. However more than 70% of the time they do not according to ZDNet and that often leads to projects that fail.
“When as an industry you have almost 70% failure or dissatisfaction with technology based projects there must be something wrong.”
The process that I have used for the 35 years of managing technology based projects, and having done thousands of them, is based around the simple fact that no project is a technology project. In reality they are business projects that need to be justified on a business level in support of a business objective with measurable results leading to a solid return on investment. It is imperative that everyone on the selection team has the business improvement process in mind because these technology investments can have a long term and far reaching impact on the bottom line. Losses may not be evident in specific line items on the profit and loss or in the budget. The discovery process is as much to uncover the actual operations of the business, as it is to look forward into the future on how the business is going to grow and operate moving forward. Everyone on the selection team has to go through this in order to get to know your business, your policies and practices along with how you intend to use new technology to drive your business.
Seven Reasons Why Technology Projects Fail
Poorly Defined Projects – This is really based on how clearly you are setting objectives, goals, outcome expectations, and clearly outlining how do you know when or if the project is going to be successful? Have you clearly outlined what your needs are? The improved features? The basic workflow outlines so you can define and manage to the milestones are you using to measure success which is driven by your business goals and objectives. This is why I always coach my customers to know what outcome you want from a technology project before you ever go looking for technology to solve your problems.
Lack of Leadership – According to a Project Management.com survey they found that 81% of people who responded felt that strong executive leadership is critical to the success of projects. Project leadership is extremely important. Specifically, executive leadership is important to the decision making process. Clarifying strategic objectives, project funding, securing project resources specifically human resources, governance, project buy-in and risk management. Executive leadership must be involved and speak for the overall operations of the business and have a willingness to make the hard and unpopular decisions to insure business success.
Lack of Accountability - Once a technology project is labeled as such, then typically the expectation of the ownership switches from a business process to an IT process. And IT will just take care of it from this point. This is a sure fire recipe for failure. IT people are great at trying to make things work. But they are typically not good business people. All projects especially software projects must have an operational control aspect to them. I have asked many times if our customers wanted the IT guy to determine the operations of their business. The statistical fact is, they are the least likely people to understand the operations of your business and make decisions that are going to operationally improve your business. IT obviously must be part of the team, and understand the objectives and the goals. Make sure that you put together a team that can insure that all aspects of the project are managed and hold the team accountable for the results.
Insufficient Communication - As we have all heard before “The problem with communication is the assumption that it actually took place” (George Bernard Shaw). This is especially true when it comes to technical projects. Communication is mission critical to the success of the project. This role is basically public relations for the success of this project. The selection of who on your team is going to lead that communication process will drive the overall satisfaction with the end product. This team member has to be able to break down a complex technical issue into terms that can be clearly understood by non-technical people including managers and executives. People who don’t understand the problems or the questions posed to them, typically can’t or won’t make a decision that is positive to the outcome of a successful project.
No Plan or Timeline - This can be especially troublesome for technology projects. Planning around tasks, processes, documentation, expectation management and milestone achievements can make it very easy to wonder off what planning you did do and put at risk the entire project. If you short the planning and preparation processes than scope creep, increased costs, and ultimately poor results will plague the long term success of your project.
Lack of User Testing or Failure to Address Feedback - With any technology project you have to keep in mind the human factor and what impact that is going to have on your project. This is where the needs and features analysis comes into play. You don’t want the IT guy making decisions on how your business is going to operate. Even though we may think we know what’s best. Technology projects are really operation and business projects so treat them as such and have your business and operations people make the decisions on how you are going to run your business.
Solving the Wrong Problem - I have seen this many times over my career. Companies start an IT project to solve one issue and they end up creating ten others because they lose focus and end up trying to solve a problem that was never identified. Or the team has an expectation that they are going to solve all the issues not understanding that no software is going to solve all issues for everyone and it is a big picture process of what moves the entire organization forward not just one part. Then there is what I call, going rouge. Which is basically when an IT project gets high jacked and is singularly focused on one persons or departments needs verses the needs of the entire company. Either one of these issues can result in failure and high or never ending costs associated with the project.
Tips to Follow for IT Project Success
Now that we have looked at why technology projects fail look at how to increase the potential of success. As you might guess many of the reasons why technology projects succeed are just the opposite of why they fail. In some cases, that is true in other cases maybe not, depending on the project. According to 2018 RibbonFish Media, an IT watchdog agency, report here are some tips to follow that might help you with the overall success rate of technology projects.
Managing the Change - If you are not changing your failing. However, don’t overlook the power and impact of the change you are thrusting on your business. Again, although we may label them technology projects these are typically really human projects. We have to manage the human factor of the project in order for it to be successful. Some of the things we must do is communicate not just what we are doing but the expected change in workflow and culture within the business. Guidance and training on the change is always a human factor consideration. If there has been a high level of inclusion and process training, than the new technology will become accepted at a higher level and pace.
Project Scope and Business Case Development – Project scopes that are written in a clear and easy to read and understand format, for the non-technical person will have a higher level of acceptance and success. The project plan has to have goals, objectives and expectations that are both achievable and reasonable. These must be agreed to by the team and measured against the overall progress of the project to ensure that everyone remains focused on the outcomes of the plan. This is also where the business objectives and business arguments that justify the need for the project are developed and maintained. If you can’t make a solid business case for the need of the project, cut your losses before you go any further. If you can’t justify it up front you won’t be able justify it afterwards either.
Some Key Components of the Scope & Business Case are;
What is driving the project? Make sure that you can clearly state what problems you are planning to solve.
Goals of the project? Clearly identify the goals of the project. Why is it important and is it going to increase your profits?
Success criteria? What is success and how are you going to measure it.
Tasks and timelines? Who is going to do what and by when?
What resources, financial or human, are required to complete the project? Do you have the people internally to drive the project? Do they have the skill level, expertise, industry knowledge, and experience?
What is the cost of the project along with expected ROI? Short term costs, long term costs, reoccurring costs, and other factors that might have a long term budget impact.
What is the Schedule? When is it going to start and when is it going to end?
Financial - both hard dollar and soft dollar benefits or costs.
Project Governance - This is where you setup the overall structure, reporting and management of the project. It also could be based on your business. You may have to work with State, Federal or other governing bodies. So some method of coordinating those efforts may be required to insure that project setup is in compliance with regulations. Create the overall project framework, policies, procedures and accountability processes that you will follow until project completion.
Communication Plan - Again this is something we all think we do well. When in reality we don’t. It is critically important to setup the communication expectations right up front. Good communication should be upward. It should outline the progress of the internal and external meetings. Outline and reinforce the scope and goals of the project, and it will outline the decisions and whom is to make these decisions throughout the project. As with any public relations campaign, part of the communication plan should be how to keep people energized and focused on the positive outcome and benefits of the project. It should not shy away from dealing with the issues. Feeling good is great, but not dealing with and communicating the problems is going to result in failure.
Availability of Ownership - All projects should be viewed as business projects with a technology component that helps make them work. All technology based projects should be designed to deal with business issues and objectives, along with the growth and strategy of the business. In order for a technology based project to be successful, it must come from the top down that the project has been reviewed and accepted by the ownership and that things are going to be changing. This does require that the owners have the fortitude to guide the business, make decisions, and stand by those decisions. In spite of end user complaints, or information that is in conflict with the trusted advisor.
Knowing When to Say When
We have now covered why projects fail. Now let’s look at one of the most interesting aspects that I have seen companies go through time and time again, not knowing when to say when, and abandon a bad project. We have all had them. If you have been in business for any length of time, you have had technology based projects that went great, and then those that didn’t go so great. The power of the human factor to keep owners and managers from admitting and changing course when a project goes south, or doesn’t meet the objectives they initially thought it would be tremendous. A lot of the time this is really based on the overall experience of the manager. in some cases, people’s internal process of simply not wanting to admit failure as a personality trait. I have seen both of these issues play out in my decades in this business and management of thousands of technology based projects and they can be tough to deal with.
There are many reasons that projects should be abandoned. Most of the time it simply goes back to the original scope and the understanding of the technical requirements of the project. Go back to the starting point of the needs and feature analysis. Was the scope clearly defined? More importantly did it change throughout the process of the project? If you continue to add to those objectives throughout the project, then it can easily set an unreachable expectation for success. This is typically driven by team members who can’t agree on the original scope but continue on regardless. In some cases, I have seen where there were hidden decisions, commitments and agendas that have been outlined and they were not expressed or communicated to the team. The process simply became an attempt to justify the decision. The business risk here, is that the business case and analysis outcome is going to be different than initially expected. The project then becomes a long term costly one.
Business justification and needs are often another underestimated aspect of technology projects. They can result in the desire or need to abandon a technology project. When you are justifying a technology based project on the wrong criteria. you may be solving the issues for one department while complicating the work processes of another. This can really drive down the long term overall benefit to the company while increasing costs. When solving business issues, you have to have long term vision. The ability to predict the needs of your business while understanding the direction of technology is vital. It’s likely that both are going to change over the long term. Justification for technology projects must be related to a current and relevant business plan that has to be formulated with long term sustainability, manageability and long term value to the organization.
There are major warning signs of a project that looks like it is going to fail. These signs may show up immediately, or they may show up over a long period of time. Depending on the data points that you are measuring. In most cases the signs will be obvious to you or they should be. The first clue is that if you continue to have the conversation around when is this project going to end? Or why does it continue to cost so much? If you are having those conversations than most likely the project is off the rails already. And it should be evaluated for its viability based on the business requirements. One of the biggest warning signs is you continue to run into technical road blocks. These road blocks will result in increased cost. Whether soft dollars or hard dollars they cost time and money to overcome. These technical road blocks may actually not be technical issues. They may be business process related, the technology may be working as designed but the process in which you are using the technology might be the problem.
Another sign might be managers that continue to force or hold to a process that is clearly not meeting expectations. They want the business to continue to go down a path that is not clearly defined, or not working. Worse case is they are so focused on not admitting failure, they will continue with no practical evidence that it will ever work to the expectation. Managers that find themselves in a trap and often revert to a basic thought process of no matter what, we are going to continue to go down this path. We have invested too much time, money and training to stop. Even when the evidence is clear that there is no justification or expectation that continuing is ever going to make business sense.
The management of successful technology based projects is a skill. First businesses have to understand that even though it is a technology based project, you are trying to solve business issues that have people attached to it. Not all projects are going to be successful. Sometimes you have to face the fact that a better decision could have been achieved that would have served the entirety of your business better. It is incumbent on the executives to listen to all points of view. Look at the data. Review the facts and the experience of the people who are on the team to objectively determine overall best course of action. Those tough decisions might put you at odds. Or they may be in conflict with other parts of your business or trusted advisors, but the overall impact of a poor technology based project can be felt for years within your organization. If you have a project that doesn’t meet your expectations, or that is under performing, you have to ask yourself, was this something that was predictable? Or was this something that came to light in the discovery and business modeling, and you simply ignored the facts. Or, was this an unexpected result of the project and limitations of the selected technologies? Regardless, at some point you have to determine the viability of continuing a process that is under performing. Or change course based on the grounds of sustainability and manageability based on desired business processes for the long term success of the organization.
By Scott M. Lewis, President / CEO Winning Technologies, Inc.
About the Author: Scott Lewis is the President and CEO of Winning Technologies Group of Companies. Scott has more than 30 years of experience in the technology industry and is a nationally recognized speaker and author on technology subjects. Scott has worked with large and small business to empower them to use technology to improve work processes, increase productivity, and reduce costs. Scott has designed thousands of systems for large, medium and small companies and Winning Technologies goal is to work with companies on the selection, implementation, management and support of technology resources. Learn more about Winning Technologies by calling 877-379-8279.
