The recent report referred to by Computerworld citing IT project failure figures and costs may have been based on questionable methodology, but it did raise some ongoing issues for the ICT industry.
NZICT Group supports efforts to improve the standard of project management and governance in the New Zealand industry, on both the supply and client side.
See also: $5.4 billion a year - the cost of IT failure in NZ
Yes, some IT projects are delivered behind schedule and a few fail. We often hear the NZ Police project INCIS cited by politicians as a failure. Yet from a deliverables perspective, INCIS has proved to be successful, albeit after some very real teething problems and issues that were vented publicly, and linger long in the minds of the political leaders involved.
Successful projects, of which there are many, get fewer column inches and we therefore don’t capture the essence of why they are successful – typically because the client and supplier are aligned in their goals and governance.
In terms of struggling projects, we don’t tend to hear how errors could have been avoided from the outset.
It would be fair to say that IT projects don’t fail more than other business projects.
Because of the innately complex structure of IT projects and the cost of implementation, as well as the risk factor, IT projects simply have a different profile to that of other business projects.
It is the very structure of all business projects, including IT projects that need to be managed properly. Risk needs to be mitigated in all business projects. In the case of IT projects, the risk of implementing new technology increases because of the inherently complex nature of IT systems.
Governance and execution as well as due diligence (not just of the solution, but the general business case) and managing expectations are integral to all business projects. Weaknesses in the aforementioned significantly affect all business undertakings.
Those embarking on major undertakings, IT or otherwise, need to ensure they have sufficient governance and execution maturity and capability in place to support the particular project. This will help ensure those involved invest correctly in risk mitigation and benefits realisation. Many organisations continue to discount this when it comes to IT projects, despite being appropriately diligent with general business projects.
The use of third-party consultants by customers to lower execution risk can also be a two-edged sword. While consultants can temporarily add value with a third-party perspective, the opportunity to build up project management competency within an organisation can be lost.
Two large IT projects are looming in New Zealand. It looks likely that a shared service IT systems model will be implemented for the country’s 21 District Health Boards and that Auckland, as a super city, will amalgamate its IT systems and networking.
Considering the size and scope of these two large projects, both the industry and customers have a great opportunity to set industry precedents. While the process of winning these projects will be highly competitive, most would agree that there is a great opportunity to show leadership.
We also need to focus on successful IT projects and learn from these. Air New Zealand may have been in the press recently for a datacentre outage and the resulting impact, but the company and its suppliers have changed its business model with world-leading ICT in order to raise its competitiveness.
There are of course risks involved for both Air New Zealand’s technology partners and the company itself, but the airline is one of the standout companies that is using technology to step change its business model. Just look at the successful implementation of its online payments system and its mPass mobile ticketing solution, both of which have streamlined systems and improved the airline’s competitiveness.
This is just one of many examples of New Zealand companies using ICT to improve their business model.
Roger Sessions’ suggestion that we simplify IT projects is a good one. It is not just about simplifying the process of IT projects, but also simplifying the processes between clients and vendors, and building a shared body of knowledge around what makes a successful project.
People design and build IT systems, and people make the decision to implement projects. It is the relationships between decision makers, project managers, architects and a range of other personnel that is integral to the success of a project. Managing expectations, governance and execution among other things throughout a project’s life is as important as the technology itself.
NZICT Group and its members welcome the focus on project management and we want to hear about the stories, good and bad, so we can build up a body of knowledge on best practice to be shared with all of the stakeholders in our industry, and to continue to promote the economic productivity benefits of successful ICT projects.
In conclusion, it would be interesting to see proponents of methodologies like SIP to promote a cause by featuring examples of projects that have been successful, rather than using the negative to highlight an important industry issue.
O’Riley is CEO of NZICT Group, an industry body representing vendors of ICT products and services
Roger Sessions replies
I appreciate NZICT’s shared concern for IT complexity, although I think it is underestimating the cost of that complexity.
For example, it says that “IT projects don’t fail more than other business projects.” In terms of number of failures, this may be true, but it isn’t the number of failures that matter, it is the cost of those failures. And IT failures are typically very costly.
NZICT is correct when it says that IT projects are “innately complex.” But typically it is not the innate complexity of the projects that results in failure. It is the unnecessary complexity that is causing the great majority of IT failures.
NZICT is in a great position to help solve the problem of IT complexity. But we need to really understand the nature of the past failures we are to avoid failures in the future.
For example, NZICT mentions the upcoming Shared Service IT system that will be implemented across the country’s 21 District Health Boards.
This is, indeed, a very important, very expensive project. But we should understand that this project is almost identical in concept to the UK’s NPfIT (National Programme for Information Technology), a project that was a massive multi-billion dollar fiasco.
I analysed NPfIT in depth in my most recent book. If New Zealand doesn’t pay close attention to what went wrong on NPfIT, it is most surely doomed to repeat that failure in its own Shared Service IT system.
I would be happy to work with NZICT to help them solve this problem for New Zealand. New Zealand deserves cost effective IT systems. Together, we can make this happen.
— Roger Sessions