GartnerGroup recently predicted that three out of four e-business projects around the world will fail due to poor planning and unrealistic expectations of new technology. Research director Joe Sweeney said he thought that Australian e-business projects could have an even higher failure rate, exacerbated by poorly defined objectives, internal politics, and overly optimistic perceptions of benefits.
That's a pretty sobering message because while in the old days your project might fail comprehensively, at least the bad news would most likely stay within the confines of your own organisation. Now that your systems are being used by external parties -- now that your users are in fact paying customers -- failure promises to be a very public affair.
Even success can get you a black eye. Take the example of eBay, the online auction company, which certainly has succeeded in attracting hordes of customers but whose system outages have been very widely publicised, and have encouraged competitors to attack them. Or consider Encyclopaedia Britannica. When it decided in late October to allow free access to content on its site, the resulting rush of traffic overwhelmed their system and the CEO had to post a message apologising for the meltdown. So on top of everything else you need to cater for wild success by making sure your solution is highly scalable.
We can define the successful IT-based project as one that delivers promised business benefits within a designated timeframe and budget. A small slippage in time and budget usually is not critical, provided the project does end up adding significant business value -- achieving higher customer retention rates, a shorter sales cycle, faster inventory turnover, or whatever dimension of business has been targeted.
So what makes projects fail? Over the years, I've seen many times that one of the chief reasons projects flop is the "big bang" factor. Setting out to do an IT "mega project" is just asking for trouble. We saw this in the early 90s when Australia's largest banks attempted very ambitious projects that produced almost uniformly disappointing results. More recently it's been evident in the stampede by big companies to implement ERP (enterprise resource planning) projects, most of which have been late and way over budget. If you possibly can, chop e-business projects into smaller, doable pieces, and keep your teams of manageable size. According to management consulting firm Compass America, the most productive projects are roughly six months long and have a maximum of 10 people on the development team.
The IT field is sometimes contrasted adversely with older areas of endeavour like engineering that seem to do projects more successfully. But can IT professionals simply emulate what these older subjects have done? Only with difficulty, according to Gopal Kapur, founder and president of the US-based Centre for Project Management, who points out a few key differences in IT projects.
The first, says Kapur, is that there is often no clearly defined "end state" with IT projects. Before a typical engineering construction begins, the project is very clearly defined through architectural models and engineering drawings and specification lists; not so most IT projects. Engineering products are fabricated from predesigned and pretested components; in IT projects most code is still written from scratch, not reused. Engineering projects can draw upon established databases of costs which make project estimation easy; these are not usually available in IT projects, which often have to rely on guesstimates. And lastly, IT vendors use non-standard terminologies whenever they can, which creates market differentiation for them but confusion for developers.
In any IT project, the challenges always involve numerous non-technical issues, and e-business projects are no exception. Most large projects will involve change management, proper communication of the project's goals, adept managing of user expectations, skilful managing of business relationships with third parties, and attention to organisational culture.
If you take all these normal project challenges, and square the degree of difficulty, then you'll have an idea of why e-business projects will call for the very best people and partners you can lay your hands on. Here's hoping you succeed.
Steve Ireland is general manager of media company IDG Communications
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