15 October 2015 blogs Matthew Carr 6 min read
As an outsider, you might think that the IT industry is the goose that lays golden eggs and asks for nothing in return. And why shouldn’t you? So many countries have tax deductions for IT employees and employers alike, and all those who work in the field seem to live prosperous lives. While the industry seems to be thriving, the harsh truth is that it has its own problems, just like many other industries. Expensive projects fail everywhere and it’s often hard to pinpoint the cause or, better said, to pinpoint a single cause. In fact, research shows that only one in eight projects can be deemed successful; granted, in this context, successful projects are those that meet the deadlines, the quality requirements and the budget, so one might argue that even those that fail at one or all these categories can still bring in revenue.
How much does failure cost the IT industry?
The usual metric by which projects are judged as failed is leaking money, even those that see the light of day and are launched on their respective markets. Make no mistake, the sums are quite hefty; for instance, one study shows that by 2009 only the global cost of failed IT projects was as high as 6 trillion USD.
When analyzing failure costs, it is important to keep one thing in mind: we speak of failed IT projects, but they can affect all industries. Today, no company can run properly without a good IT system in place and every industry is susceptible of paying the high IT failure costs.
Bad project management – the root of IT failures
As previously stated, it is hard to pinpoint a single cause for these very expensive failures. Yet, there is one thing that keeps being named when analyzing the least successful of endeavors: project management. The task of an IT project manager is never an easy one – processes, Gantt charts, hundreds of emails per week and tens of different reports to internal and external stakeholders leave very little room for the actual team management.
The most common tendency is to blame the people in charge (i.e. the project managers) for poor performance. While it might be tempting to believe that simply replacing one person can have a dramatic positive impact upon the whole service management process, this is rarely the case. Often times, the root causes of failure are either outside the project manager’s control, or need more than just commitment from a project manager in order to be changed. Bad decisions can be made at every level, and they range from overestimating the benefits of a technology or underestimating the complexity of its deployment, to simply putting the wrong people in charge of implementation.
But it is easy to name another underlying cause of why project management seems to be always the scapegoat: most people see project management and service management as separate entities that have nothing in common and don’t influence each other. This is far from the truth; ITIL – one of the three frameworks of IT Service Management, clearly underlines the need for project management to be involved in all the other aspects of any business.
What is there to be done?
A recent study conducted by PricewaterhouseCoopers shows that out of 10,640 projects reviewed from 200 companies located in 30 countries and various industries, only 2.5% of the companies have successfully completed all of their projects. This implies that failure is extremely common – but the numbers also hint at a more subtle fact: a lot of projects fail before they even reach a minimum amount of visibility – in fact, it is not uncommon for them to be considered failed and be buried before they are even deployed.
Oftentimes, Achilles’ proverbial heel is a subtle problem that is traditionally considered solved, such as service monitoring. All major sections of an IT infrastructure are monitored; however, many companies find that, as soon as they attempt to scale their infrastructure or introduce new processes, systemic failures become difficult or outright impossible to diagnose with limited, per-application monitoring services. On paper, it seems like nothing is wrong: tools and procedures for monitoring and error recovery exist, so the project should be fine – but it’s not.
Successful projects recognize problems like these and even apply formal methods, such as ITIL, in order to deal with them. One of our customers, a personal and business banking company, did not even need to extract more information from their system in order to meaningfully tackle this problem. They focused, instead, on better aggregation – faster, better-organized error reporting, with immediately-available geographical information. Not only did this allow them to respond more quickly to outages or security threats, but they even found that early, efficient reporting helped them to correct an issue before an outage even had a chance to occur.
Other times, the problem has more to do with unequal development, especially when recent technologies are involved. A lot of cloud-based IT projects failed back when cloud infrastructure was more of a buzzword than a real, widely-adopted solution, because special monitoring tools were not available yet, and traditional ones were not adequate. In fact, this is even seen even today – but not because special monitoring tools are not available, but because they are not employed, either as a consequence of lack of know-how at the IT ops level, or due to management disinterest or lack of awareness.
The Service Strategy phase of ITIL, comes to rescue here by ensuring that all the elements of a process are completely aligned with the general objective that needs to be attained. By implementing this phase, companies can easily learn how each step of the project benefits them from two main points of view: financially and from the client’s perspective.
ITSM through ITIL can have multiple benefits for the entire organization, not just for the timely completion of the IT projects. The ability to measure progress and calculate ROI of IT projects is an important part of ITSM. Without a clear idea of project costs, organizations can’t plan for the future and choose projects that would add the most strategic value at the lowest cost. Coupled with efficient and goal-oriented project management, ITSM can very well be deemed as the key to project success in any industry.