Learning From  Failure  - A Tale of Three Projects
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Learning From Failure - A Tale of Three Projects

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Lessons to be learned from Project Failure

Lessons to be learned from Project Failure

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Learning From  Failure  - A Tale of Three Projects Learning From Failure - A Tale of Three Projects Presentation Transcript

  • Learning from ‘Failure’ or ‘A Tale of Three Projects’ Some observations from personal experience Peter M Salmon, C.A . 26 June 2009
  • Corporate Governance
    • Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting.
    • http://bit.ly/A8qZO - the reference is to a more detailed presentation I gave to the ISACA Governance event last October
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Governance Model – ISO 38500 Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd Source-ISO 38500
  • IT Governance Principles
    • Responsibility
    • Strategy
    • Acquisition
    • Performance
    • Conformance
    • Human Behavior
    • Source:ISO 38500
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Three projects
    • Project A – sale of a software package from a small vendor to a major corporation, vendor had previously only built custom software on smaller scale
    • Project B – systems integration project involving supply of third-party application to a new venture, personal relationships a key factor
    • Project C – customisation of overseas software application to meet needs of a major new customer, in an operational outsource
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Project A
    • Small vendor with limited capability sells package to large company, based 3000 miles away.
    • First sale of package
    • Agrees to customise application for purchaser needs
    • Business owners, experienced professionals, let development head and team lead them into the deal
    • All starts well, but after a few months there is a team in the client and a team at home base, two versions of the package are emerging
    • No contract with client is in place
    • Development head quits
    • Problems begin to emerge both at client and at home base
    • Client executives at ‘war’ with each other
    • Relationships deteriorate – bills not paid
    • Vendor manages to put contract in place
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Project B
    • New client won by a systems integrator
    • Deal involves using third party application and database software to implement new, high volume transaction system for new market entrant in highly competitive business sector
    • Personal relationships initially strong
    • Problems start to emerge
    • No contract in place
    • Relationships begin to deteriorate
    • All parties bring in new management, new client management wants internal cheap solution
    • Third party sub-contractor begins to play rough, no back to back in place
    • Client starts to build internal solution
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Project C
    • Major BPO deal both parties for various reasons wanted to do deal
    • Package customisation turned out to be materially mis-scoped
    • Legal, regulatory and market requirements much more complex than initially understood
    • Vendor unable to meet time-frames
    • Customer proved extremely difficult to manage and refused to make timely decisions
    • Customer business processes poor
    • Customer had history of failed projects
    • Constant scope creep
    • Poor contract
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Outcomes
    • None of the projects met their original objectives
    • Each cost all the participating parties more than forecast
    • Neither A or B were ever delivered and the parties disengaged
    • C was delivered but in a much different form from that originally envisaged
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 1- Responsibility
    • Individuals and groups within the organization understand and accept their responsibilities in respect of both supply of, and demand for IT. Those with responsibility for actions also have the authority to perform those actions.
    • In each case responsibilities were not understood
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 2- Strategy
    • The organization’s business strategy takes into account the current and future capabilities of IT; the strategic plans for IT satisfy the current and ongoing needs of the organization’s business strategy .
    • Broadly satisfied in each case as regards the 3 projects
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 3- Acquisition
    • IT acquisitions are made for valid reasons, on the basis of appropriate and ongoing analysis, with clear and transparent decision making. There is appropriate balance between benefits, opportunities, costs, and risks, in both the short term and the long term.
    • My opinion looking back is that each case there was failure in this area, both from the viewpoint of the acquiring organisation and the supplying parties
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 4- Performance
    • IT is fit for purpose in supporting the organization, providing the services, levels of service and service quality required to meet current and future business requirements.
    • For A and B this proved not to be the case. In C the eventual outcome was adequate.
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 5- Conformance
    • IT complies with all mandatory legislation and regulations. Policies and practices are clearly defined, implemented and enforced.
    • This was not the case
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Principle 6– Human behaviour
    • IT policies, practices and decisions demonstrate respect for Human Behaviour, including the current and evolving needs of all the ‘people in the process’.
    • From my perspective this was not the position.
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Lessons learned
    • Strong governance should be in place as part of organisational culture
    • Failures in the areas of Responsibility and Acquisition meant that each of these projects were ‘doomed’ from the outset
    • The signal shortcomings in Performance further compounded the issues, though much of this was due to the cultures of the acquiring organisations involved and the failures in the area of Responsibility
    • Consequently Conformance and Human Behaviour fell short.
    • If appropriate governance had been in place these projects would either have not got off the ground or, would have been very different.
    • Ego and individual desires for business success were key elements in each of these projects and were material factors in the problems which emerged. Various players in each of the dramas could be said to have taken excessively optimistic views of the circumstances.
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Lessons learned
    • Monitoring was lacking, compounded by
    • Failure to adequately Direct and Evaluate
    • Business pressures and perceived business needs overwhelmed the personnel involved, due to the absence of a vigorous governance model in each case – which model should be understood by all involved.
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd
  • Peter Salmon– Principal - Manning Charles & Associates Ltd
    • Peter is a senior executive and consultant with an extensive business management, professional services leadership and delivery background. He combines this with significant organisational change, business assessment, and resource management experience. This is complemented by having worked in a number of countries and a varied range of business sectors.
    • Peter's consulting experience includes IT consulting, general consulting, financial investigations and valuations, and litigation support. His other experience includes:- practice development, practice management including service economics and profitability, quality assurance and resource management.
    • This knowledge and expertise is combined with a strong record of achievement. For many years Peter has worked with CxO level executives, management and staff to provide business focused outcomes to issues .
    Learning from Failure © June 2009 Peter M Salmon & Manning Charles & Associates Ltd