Why Projects Fail: Obstacles and Solutions

Why Projects Fail:
y j
Obstacles and
Solutions

Michael Krigsman
Asuret, Inc.
617-905-5950
mkrigsman@asuret.com
k ig @ t
Twitter: @mkrigsman

© Copyright 2009 Asuret Inc. All rights reserved.

Failure is common:
30-70% of projects are
late, over-budget, or
don’t meet expectations.


Total failure worldwide:
trillions of dollars (SWAG*)

*silly wild ass guess based on independent research
wild-ass
http://blogs.zdnet.com/projectfailures/?p=6142


Failures persist despite millions invested
in
i prevention. Wh ?
ti Why?


We ignore
warning signs


Cost to projects is high
high.
Impact on the business
is higher
higher.


Nightmare
Ni ht
Scenario
Levis can’t fill orders
for one week = 98%
decline in quarterly
profits

© Copyright 2009 Asuret Inc. All rights reserved. Image © LS&CO

Project management is not enough


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


Three root causes of failure
 Business vulnerabilities
 Alignment mismatches
 Devil’s Triangle relationships


Business vulnerabilities, not technology,
cause the problems


Case study: Oak Park, IL
 Change management
 Project management
 Third party relationships


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


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


Management
vs.
vs
IT and testing


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



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


[W]hen you’re marching through hell,
you re hell
just keep marching.
Charles Burbridge
g
LAUSD’s CFO
(LA Times, 3/19/07)


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=576 © Copyright 2009 Asuret Inc. All rights reserved.

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?


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)


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


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


Preventing failure

Is easier
said
than done

First, recognize that vulnerabilities exists

Factual data is essential


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


Key drivers of success


Measure indirectly
Simple questions, range of responses, and importance


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

Simulation
and
Analysis


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


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


Why Projects Fail: Obstacles and Solutions

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