IT project delivery must improve

Morris Pentel: Most technology projects go wrong, and practice is to blame

According to a study by the US-based Standish Group in June, recession-related budget slashing and IT layoffs have taken their toll on IT project success. Twenty-four per cent of IT projects were considered failures, having been cancelled before they were completed, or delivered but never used.

Forty-four per cent were considered problematic, in that they were finished late, over budget, or without the required features and functions.

We recently found, while polling 100 UK contact centre operators on behalf of Empirix, lax practice is the root cause of increased IT project costs. The consequences are not purely financial, of course, but also affect the customer experience, brand and overall success of the business.

We believe that project delays and budget overruns have become accepted when rolling out new technologies.

Forty-eight respondents – ranging from project managers to technical and business stakeholders – told us that technology projects often go wrong. A further six said they nearly always go wrong, and three maintained that technology projects always go wrong.

Just eight said their technology projects almost never failed.

Typical IT projects last just under a year, with delays adding 7.1 months in time and 90 per cent to the original budget, on average. A £1m project may blow out to £1.9m. This figure is a long way from the 10 per cent ‘safety net’ that IT managers traditionally build into their project plans.

Worryingly, 77 respondents confessed to either not knowing cost impacts or only tracking some.

Our respondents seemed prepared to risk a high proportion of their customer interactions while rolling out new technology in their contact centres. Twenty-nine respondents cited call impact rates of between 50 per cent and 100 per cent as a result of IT project delays.

The most serious delays were caused, they said, by stakeholder issues, poor planning, a lack of focus from senior management, lack of resources, poor testing and supplier issues.

Often, no significant post-project review happened, and where they were, concrete data was the exception rather than standard practice. None of the respondents felt that their organisation was properly monitoring this. In particular, the return on investment (RoI) or capital used was not recorded.

The survey also identified other classic mistakes companies make when rolling out new technologies. These included lack of thorough testing, project reviews and senior executive sponsorship.

The impact of overruns was considerably less for companies that avoided these errors and applied best project management practices. These companies still saw budgets blow out 30 per cent and delayed 3.6 months, on average.

However, for companies in the ‘bad practice’ category, delays and additional costs were four times higher: an extra 14.3 months and £1,150,000 for a typical £1m project.

Testing was found to be a widely undervalued element of good IT project practice management. Of the 100 contact centre operators sampled, only 20 initially cited lack of testing as the cause of delayed project roll-outs. However, on interrogation, respondents conceded that testing was a much bigger issue.

Factors such as late supplier deliveries, system conflicts and network issues could all be traced to a lack of testing capabilities. Poor testing also affected project plans and resource availability, because delays meant that resources were re-assigned and unavailable when needed.

Most of the project management mistakes IT departments make boil down to either a lack of adequate planning or breakdowns in communication – either among the project team or between the project team and the project sponsors. These mistakes can be fatal. They can also be avoided.

Organisations must focus on overall quality management throughout the project deployment lifecycle, focusing on planning, assessment, development, testing and ongoing monitoring of systems once they are in production.

Morris Pentel is chairman of contact centre think tank the Customer Experience Foundation (CEF)