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Reasons IT and Technology Projects Fail

A scary statistic: 30-35% of IT projects are failures (IDC 2017). Regardless of where you do your research - McKinsey, Gallup, HBR, Gartner, CIO, PWC, Wellingtone etc... the stats on tech projects rack up in a very similar way. IT projects are full of risk and rarely meet the desired outcomes.

At least 1/3 of them are big, fat-assed failures.

1/6 are 'black swans' - a project so rubbishy that it had a financial over run of 200+% and schedule overrun of at least 70%.

Last but not least - 17% of IT project suck so badly they can end the organisation.

Yet IT projects are essential to organisational change. We have had years now of becoming accustomed to ongoing, disruptive and fast change. Our organisations need to adapt to rapid and relentless change.... or die at the hands of more able competition.

So why are technology projects so bloody hard?

The most consistent reasons are:

1. Misalignment between IT and the wider business....and externals vendors.

Organisations fail to bridge the gap between strategy, design and delivery. Technology projects are wider than the IT team; but key stakeholders are often not included in the project team or are consulted about scope until late in delivery. The organisation does not invest in painting a vision of the future. While most research specifically references the business, external vendors and contracts also fall into the gap too.

2. Complexity and impact of change is not understood or visible.

Any new implementation of technology will require a view of the current internal technology environment (aka current state). This is important for scoping the new project but also determining the constraints, dependencies and risks involved. While some organisations seek to reduce risk by utilising external consultants (e.g. the big 4 or vendors) to write reports to explain the 'gotchas' so work with the limited information they already have. The time, expense and peoples patience involved can add up.

3. Executives don’t recognise that strategy is delivered through technology projects.

Change is constant but delivered in milestones; every project driving organisations closer to their goals. Without a clear understanding of how each prior project enables the next, it's easy to lose track of what the goal is and how each project is a step forward in achieving it. Executives (C-suite and the board) don't have a clear view of how technology enables their current business or it will continue to do so as the business changes over over time. (see Frankenview of Technology for more information on outdated mental models).

4. The project team.

Firstly, project management is essential to running a technology project; as is the composition of the project team. Many large organisations don't invest in a PMO, hire kick ass technology PMs or design the project team with success in mind. In many cases the team structure is not considered or worse the project team has day jobs as part of the IT Team. Organisations run the gauntlet trying to balance large projects along side business as usual work and trying to make their people stretch across both. Such situations will increase stress and create competing priorities which are recipe for burnout and overall project failure.

Looking for some ways to ensure your next project isn't part of the 30% of projects that fail? Contact STATE3 to chat about how we can help.


Tania Armstrong is the co-founder and CEO of STATE3 New Zealand. She is a dedicated business developer and strong relationship builder. Her focus is always on ensuring organisations get what they require from technology solutions, operationally and strategically. Tania is a Chartered Director with a strong affinity with data and governance and is currently completing a Masters in Information Governance.


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