it failure and waste
DESCRIPTION
This presentation describes causes of failed IT projects, provides examples, and discusses solutions. Presented 10/5/09 at the Center for Global Business Law & Ethics, at Suffolk University's Sawyer Business School (Professor Lydia Segal, Program Coordinator).TRANSCRIPT
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© Copyright 2009 Asuret Inc. All rights reserved.
Michael KrigsmanAsuret, [email protected]
IT waste:A world-class problem
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Failure is common:30-70% of projects are
late, over-budget, ordon’t meet plan.
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Total failure worldwide:maybe $6 trillion (SWAG*)
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*silly wild-ass guess
http://blogs.zdnet.com/projectfailures/?p=6142
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Many of usignore the warning signs
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“That’s the IT Department’sproblem, not mine.”
So What?
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NightmareS c e n a r i o
Levis can’t fill ordersfor one week = 98% decline in quarterly profits
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http://blogs.zdnet.com/projectfailures/?p=917http://blogs.zdnet.com/projectfailures/?p=935
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Understanding failure
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IT Project Success
Business Case
StakeholderInvolvement
Executive Sponsorship
Project Management
Change Management
Third-Party Relationships
Resource Availability
Business vulnerabilities, not technology, cause the problems
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Managing pain was part of the plan.Adrian SannierUniversity Technology Officer, ASU(Wall Street Journal, 9/25/07)
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Guns at Arizona State University
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http://blogs.zdnet.com/projectfailures/?p=412http://blogs.zdnet.com/projectfailures/?p=418
Expected: $70M; Plan: $30M Typical schedule: 4 yrs; Plan: 1.5 years Software vendor: Oracle Project goal: Replace payroll system Failure: Incorrect paychecks cause severe morale
problems, including need for armed guards on payday Causes: Complexity of university payroll Primary project strategy: maintain schedule at all cost Accepting high error rate, with plan to fix over time
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American LaFrance:Custom emergency equipment
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ALF blames IBM for bankruptcy
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http://blogs.zdnet.com/projectfailures/?p=583
Cost: Unknown, but IBM listed as $5.5M creditor Goal: Outsource ERP to IBM (financials, inventory, etc.) Background: ALF spun out of Freightliner Failure: Software problems interfere with inventory
tracking and other issues, causing late deliveries, customer service issues, and quality control
Result: Bankruptcy filing Causes: ALF distracted by deteriorating relationship with Freightliner, problems
with constructing new facility, and economic downturn Poor project planning and oversight by IBM
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[W]hen you’re marching through hell,just keep marching.
Charles BurbridgeLAUSD’s CFO(LA Times, 3/19/07)
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LAUSD payroll broken: teachers suffer
http://blogs.zdnet.com/projectfailures/?p=130http://blogs.zdnet.com/projectfailures/?p=436http://blogs.zdnet.com/projectfailures/?p=576
Budget: $95M; Expected: $135M System integrator: Deloitte Consulting Software vendor: SAP Goal: Replace payroll system Failure: Teachers not paid Causes: University payroll is inherently complex Roll out and testing were likely flawed (Union: system not
run in parallel) Complicated work rules Deloitte did not press LAUSD for complete information SAP did not want to interfere with Deloitte’s account
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Interlocking and conflicting agendas Customer System integrator (consultants) Technology vendor
Confused buyers Silos and internal conflicts
Wacky system integrators Customer success vs. consulting revenue
Schizophrenic software vendors Loyalties split between customers and integrators
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Devil’s Triangle relationshipsConflicts of interest are embedded in the structure of the industry (customer gets fleeced)
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Oak Park Angst
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Oak Park, IL: Complete abandonment
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http://blogs.zdnet.com/projectfailures/?p=1304 http://blogs.zdnet.com/projectfailures/?p=1358
Cost: $2M Time frame: complete abandonment after 5-year project Software vendor: PeopleSoft Project goal: Replace payroll and financials Failure: Accounting and finance errors, such as vendors
paid twice Causes: Lack of Oak Park sophistication regarding enterprise software
process, scope, costs over time, management, and so on Low-skill finance employees, lacking basic computer skills, did not
enter data into system Insufficient change management and user training
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Project Ocean: Philadelphia’s biggest and most complex IT system.
Kumar KishinchandFormer City Water Commissioner (Computer World, 8/10/06)
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Project Ocean: IT overrules experts
http://blogs.zdnet.com/projectfailures/?p=220http://blogs.zdnet.com/projectfailures/?p=250
Budget: $9M; Actual: $18M Schedule plan: 1.5 yrs; Actual: 3+ years Software vendor: Oracle Failure: Late, over-budget project Causes: Water billing is complex: off the shelf software requires customization Oracle inexperienced: selected by IT department Project manager / executive sponsor turnover Finance dep’t in charge; Water dep’t was customer Politics and empire-building Separately: consultant billing irregularities
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Alignment mismatches drive poor decisions
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Information silos IT / lines of business Internal / external groups
Distortions: poor judgment, politics,and personal agendas
Extreme case: “Successful” process / failed outcome
Poor communication, agendas, and different measures of success create alignment gaps:
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Managementpressure
and the IT divide
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J.Crew: Management overrules IT?
http://blogs.zdnet.com/projectfailures/?p=1015
Cost: $3M plus lost sales and dissatisfied customers Failure: Impaired ability to capture, process, ship, and
service orders Causes: Aggressive internal planning and schedule Insufficient testing of new system before replacing old Management accepted responsibility Plausible scenario: management pressured IT to accept aggressive
schedule
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Industry analyst / vendorpay to play game
Subtle, insidious, and real
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Solving the problem
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Sweeping changes are needed Detect weak signals
Early warning systems Locate problems, amplify message, and communicate to management
Create feedback loops Increase management awareness Create a culture of continuous improvement Management must listen and act
Distortions interfere with success Denial is the handmaiden of failure Political agendas push against success Poor judgment is endemic in failure situations
Industry structure contributes to repeated failure Devil’s Triangle Analyst conflicts
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Detect weak signalsWork across departments to leverage the collective intelligence and experience of all stakeholders.
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Avoid bias Remove emotion and political pressures Create organizational consensus and enhance
collaboration
Facilitate consensus across silosUse non-threatening techniques to:
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Identify vulnerability hotspots
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Pinpoint top management priorities
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IT department view:Business case haslow vulnerability
Executive management view:Business case has
high vulnerability
Reveal mismatched expectations
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Identify critics / championsAnalyze differences in stakeholder opinion acrossthe organization, helping management target areas needing communication, training, and support.
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Critic Champion
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Deliver comprehensive reporting
Identify critical health indicators Highlight specific vulnerabilities Target immediate and actionable next steps
Suitable for Board, management, staff, and partners:
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Trusted, objective advisor Independent authority on IT success Absolutely vendor-neutral
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For more information contact:Michael Krigsman, CEOEmail: [email protected]: http://asuret.comBlog: http://blogs.zdnet.com/projectfailures+ 1 (617) 905-5950