Why IT Transformations Fail
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CIO Online recently published two articles, Why IT projects still fail and 10 common ERP mistakes to avoid. Both look at the same issue, IT’s notoriously poor record of success. Why IT projects still fail cites three separate studies that report over 70% of IT transformation projects fail. In 10 common ERP mistakes to avoid, several additional individuals provided their insights in the common delivery issues related to large application implementations.
I have helped several firms, ranging from $500,000 in revenues to Fortune 20, successfully execute transformation initiatives through enterprise application implementation (HR, Finance, CRM, etc.) and M&A integration. Based on this experience, I believe the causes listed in both articles can be consolidated into three overarching ideas.
Support Wanes Over Time
Senior Leadership’s responsibility is to always be looking forward. Once a transformation initiative is underway, their role changes from direct involvement to oversight. They expect you to be able to deliver. Unfortunately, with that shift, other key players begin to redirect their efforts and, without intention, spend less time supporting IT. It is also common for funding to become an issue as limited resources move to newer initiatives. When taken to the extreme, this redirection can be described as ‘the new, bright, shiny toy’ syndrome.
Digital Transformation is Described as a Project Rather Than a Process
Describing transformation initiatives as a project is a fundamental mistake. Genuine transformation initiatives include activities and projects, large and small, that combine to change the business. Many of these may not IT efforts. Fully transforming business operations may also require some foundational steps be to create the environment for change. For example, to digitally transform industrial processes using sensors or other Internet of Things (IoT) components may require building a private 5G network in your facilities. It may also be necessary to renegotiate supplier and service contracts to support the new processes. If the focus is on the IT project, these other activities may not get the attention they require
IT Fails to Tell a Compelling Story Over Time
Too often, the only measures of IT success focus on IT activities rather than business outcomes. The most objective of any transformation project is improved business performance. Over the life of the transformation effort, IT must tell and retell the story behind the status reports. Status reports tend to focus on three basic elements scope, time, and resources. The initial project charter balances these elements to make commitments on deliverables and timing. To often, the initial promise becomes the only measure of success or failure regardless of changes in the initial business drivers. IT must effectively tell the evolutionary story that is part of any large and lengthy initiative. As business conditions change the implementation change. IT needs to manage expectations with leadership and key stakeholders. They are the ones who determine success or failure. Success needs to be defined based on delivered improved business outcomes rather than the degree of match to the original charter.
Keys to Success
Successful transformation initiatives require two things all-inclusive roadmaps and strong governance. Comprehensive roadmaps let you share with confidence when new IT services will be delivered. Governance controls changes to the roadmap so that the full impact of new initiatives can be understood. When a new project is added to the roadmap, it may require that other projects be rescoped or delayed. A well-designed roadmap, let you tell a story without using IT speak about things like taxonomies, architectures, and data models. All are very important but lengthy discussions about them will cause stakeholders’ eyes to glaze over. They get in the way of the simple story of what will they get, when will they get it, and what changed and why.
