Why Projects Fail: Obstacles and Solutions

Total failure worldwide: trillions of dollars (SWAG*) *silly wild ass guess based on independent research wild-ass http://blogs.zdnet.com/projectfailures/?p=6142 © Copyright 2009 Asuret Inc. All rights reserved.

Nightmare Ni ht Scenario Levis can’t fill orders for one week = 98% decline in quarterly profits http://blogs.zdnet.com/projectfailures/?p=917 http://blogs.zdnet.com/projectfailures/?p=935 © Copyright 2009 Asuret Inc. All rights reserved. Image © LS&CO

Understanding failure

Process is not enough  Failures persist despite ITIL, PMI, CMM, and other methodologies  Project management tools do not stop failure  Nor does Project Portfolio Management  Projects f d d ith t b i P j t funded without business case, executive ti sponsorship and so on  Distortions: poor j g p judgment, p , politics, silos, , , and personal agendas  Extreme case: “Successful” process / failed outcome © Copyright 2009 Asuret Inc. All rights reserved.

Oak Park: Complete abandonment  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: C  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 http://blogs.zdnet.com/projectfailures/?p=1304 http://blogs.zdnet.com/projectfailures/?p=1358 © Copyright 2009 Asuret Inc. All rights reserved.

Alignment mismatches drive poor decisions Poor communication, hidden agendas, and conflicting measures of success create gaps  Information silos  IT / lines of business  Internal / external groups  Business needs become disconnected from strategy and planning t t g d l i g  Execution then suffers © Copyright 2009 Asuret Inc. All rights reserved.

J.Crew: Management accepts blame  Cost: $3M plus lost sales and dissatisfied customers  Failure: Impaired ability to capture, process, ship, and service orders  Causes:  Aggressive i A i internal planning and schedule l l i d h d l  Insufficient testing of new system before replacing old  Management accepted responsibility  Plausible scenario: management pressured IT to accept aggressive schedule http://blogs.zdnet.com/projectfailures/?p=1015 © Copyright 2009 Asuret Inc. All rights reserved.

Devil’s Triangle Dysfunctional industry structure creates overlapping and conflicting agendas g g

Devil’s Triangle Conflicts of interest are embedded in the enterprise software industry (customer gets fleeced) Confused buyers Silos and internal conflicts Wacky system integrators Customer success vs. consulting revenue Schizophrenic software vendors Loyalties split between customers and integrators © Copyright 2009 Asuret Inc. All rights reserved.

LAUSD payroll broken: teachers suffer  Budget: $95M; Expected: $135M  System integrator: Deloitte Consulting  Software vendor: SAP  Goal: Replace payroll system  Failure: Teachers not paid  Causes:  School 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 http://blogs.zdnet.com/projectfailures/?p=130 http://blogs.zdnet.com/projectfailures/?p=436 http://blogs.zdnet.com/projectfailures/?p=576 © Copyright 2009 Asuret Inc. All rights reserved.

Preventing failure

Observe warning signs  Ambiguous or diffuse project ownership  Stakeholder complexity  Who’s calling the shots?  Conflicts of interest  Inconsistencies (hardest t discern i advance) I i t i (h d t to di in d )  Are stakeholders engaged?  Is management in denial? g  Business case clear? © Copyright 2009 Asuret Inc. All rights reserved.

Governance beyond IT  What problem does the project solve?  Who is the project champion?  Are stakeholders committed?  What PM toolbox are you going to use and what drives it (procurement i ( t issues)? )?  How will the project be governed (who, how, when)?  How will the project be controlled (planning monitoring, (planning, monitoring reporting)?  How will success be judged or measured? (who when, how) © Copyright 2009 Asuret Inc. All rights reserved.

Extending into the enterprise…  Share knowledge and lessons learned to improve success rates  Embed innovation around IT project success in the organization  Evaluate your organization’s collaboration capabilities organization s © Copyright 2009 Asuret Inc. All rights reserved.

And beyond  Increase appropriate communication to reduce information silos  Connect social networks to support continuous organizational improvement  Facilitate rapid effective and ethical decision-making rapid, effective, decision making  Align IT with measurable business results  Change p j g project culture, not corporate culture , p © Copyright 2009 Asuret Inc. All rights reserved.

Which all sounds good…

Talk T lk is cheap

Preventing failure Is easier said than done

First, recognize that vulnerabilities exists

Facilitate consensus across silos Use non-threatening techniques to:  Avoid bias  Remove emotion and political pressures e o e e ot o a d po t ca p essu es  Create organizational consensus and enhance collaboration  Leverage collective intelligence inside the organization © Copyright 2009 Asuret Inc. All rights reserved.

Evidence-based planning  Raise profile of success factors  Target specific issues for focus a get spec c ssues o ocus  Create concrete plans  Coordinate action against plan  Rinse and repeat as needed

Key Lessons  Governance: people, collaboration, and responsibility  Measurement and diagnosis are prerequisites for future success  Consolidating / aggregating lessons learned is essential to achieve continuous improvement  Pinpoint specific recommendations  Drive toward consensus  Long-term solution  Look beyond project management  Raise awareness of real vulnerabilities  Engage stakeholders and sponsors © Copyright 2009 Asuret Inc. All rights reserved.

For more information contact: Michael Krigsman, CEO Email: mkrigsman@asuret.com Web: http://asuret.com Blog: http://blogs.zdnet.com/projectfailures Twitter: http://twitter com/mkrigsman http://twitter.com/mkrigsman + 1 (617) 905-5950 © Copyright 2009 Asuret Inc. All rights reserved.

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Why Projects Fail: Obstacles and Solutions

by Michael Krigsman on Dec 12, 2009

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