Despite some improvements in IT project delivery, IT investments are still failing. As we enter further into the digital age the stakes will only increase and as such we need to improve our digital investment performance.
At the heart of digital disruption and digital transformation is an inherent reliance on technology and the consequent consumer experience. For better or for worse, we have all come to accept that technology fails us from time to time.
Such failures can be minor including the occasional reboot of our most treasured smart device, or failures can be catastrophic with major disruption to commercial or public services.
Organisations embarking on digital transformation are obligated in the eyes of their customers to get the technology right and to deliver a great digital experience. Failing to do so usually results in consumers exercising their digital democratic right to voice their displeasure to the world.
IT failures continue
The (dis)honour board of monumental IT project failures continues to grow. The recent announcement of the Transport for NSW $425M IT upgrade being off the rails (pardon the pun) may or may not come as a shock to those in government circles, however to tax payers and commuters who ultimately foot the bill for these failed projects, the news is assuredly unwelcome.
This latest IT misadventure adds to a long list of failed IT investments in Australia and worldwide.
The Project Management Institute’s 2017 Pulse of the Profession survey reported that 28 per cent of strategic initiatives were deemed outright failures, although this has improved since the 2016 survey. Analyst Stephen Elliot, from research firm IDC, estimates that up to 35 per cent of IT projects are failures.
Poor governance at the heart of IT investment failure
There can be numerous reasons for failed IT projects, but a common factor is poor governance, usually associated with poor decision making. IT (or digital) governance is complicated and covers many facets of organisational decision making and behaviours.
However, once a decision is made to invest in technology enabled business change, organisations all too often fail in their governance of these in-flight investments.
A key governance control associated with the performance of an IT project is the establishment of a project or a program steering committee. The role of such a committee is to provide oversight of the project or program to ensure resources are properly allocated, the risks and issues are dealt with, and objectives are met.
But are these steering committees effective? In the case of these failed projects you would have to answer no and furthermore that these committees are negligent in the discharge of their responsibilities.
Lack of focus
One of the reasons for this failure is a lack of focus. I have sat in many a project or program steering committee where members of the committee are generally unprepared and subsequently are easily distracted by the constant barrage of emails, text messages and other interruptions readily presenting themselves on their smartphone, tablet or laptop. Sometimes they are using all three devices!
Some steering committees are so dysfunctional that the only enthusiasm on show happens when the coffee order is taken. This disruption is then amplified by the shear anticipation of the coffee then arriving. So is coffee to blame for IT failures? Probably not, but hopefully you get my point.
So how can it be that a presumably intelligent and senior group of professionals fail in their governance duties?
The right committee membership
Firstly, the membership of the committee is critical. Should the committee membership be representative of stakeholders or should it be skills based? The answer of course is ideally the two are not mutually exclusive. You do however need some of the members to be experienced in overseeing technology-enabled projects. It may also be prudent to include an independent, external expert on the committee to provide impartial and experience-based advice to the committee.
Importance of project sponsor role
Secondly, don’t confuse the role of the committee chair with that of the project sponsor. The role of the sponsor is critical to the project’s success and taking on this role requires more than just turning up for monthly steering committee meetings.
Being the project sponsor requires investiture of that person with appropriate structural authority to have ultimate accountability for the outcomes of the initiative. The sponsor has to commit themselves 100 per cent to the success of the project and that requires a commitment of time, intellect and emotion.
Thirdly, the committee must have an effective terms of reference so that each member is crystal clear about their role on the committee and their responsibilities and obligations.
The terms of reference should clearly outline how meetings are to be conducted and the information that is expected to be discussed. Ideally, both the committee, and whomever the committee reports to, will hold the committee accountable for their performance.
Ignore the coffee
And finally, ignore the coffee and focus committee discussions on the issues that need discussing. All too often committees spend 90 per cent of their time listening to the project manager discuss the amazing performance of the project or program over the earlier period.
This is not an effective use of the committee’s time. Ideally the committee should spend 90% of their time on the project risks and issues, determining how the committee can assist the project team and provide them with clear direction.
From a governance perspective, there are many other factors that can contribute to failed IT investments. A lack of focus by project steering committees is often matched by a lack of organisational focus on digital investment benefits and outcomes.
This article is the first in a series of articles discussing digital governance and further exploring why digital investments continue to be a huge risk for organisations. Next time, I will discuss why “benefits management” must be a dark art as very few organisations do it and even fewer do it well.
Dr Malcolm Thatcher is CEO of Strategance Group – a consulting firm focussing on assisting organisations with Digital Strategy and Governance. Previously, Dr Thatcher has served as CIO for Queensland Health and for the Mater Hospital Group in Brisbane. Dr Thatcher has recently published “The digital Governance Handbook for CEOs and Governing Boards”, available from Amazon.
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