Many months ago I quoted IBM and McKinsey when I wrote about the influence personal behavior has on IT project success and direction. Recalling those two quotes:
- According to an IBM study, only 40% of projects meet schedule, budget and quality goals. Further, they found that the biggest barriers to success are people factors.
- McKinsey found that ‘while an increasing number of non-IT executives give IT a score of 61% for basic services like email and laptop support, only 26% rank IT high in the most vital area of proactively engaging with business leaders on new ideas or systems enhancements.’
Recently two more articles have been written by McKinsey which identify other — and less obvious — influences of human behavior on IT projects.
In their McKinsey Quarterly, they report on the Board’s role in the technology agenda and on delivering large-scale IT projects.
Drawing on the key points which identify the influence of individuals — which I believe is the primary source of IT project failures — it’s clear that the notion of the role participants play (as opposed to the technology itself) is perhaps gaining some notoriety.
From “Elevating Technology on the Boardroom Agenda:”
- We know from other research I’ve reported on that there is not a close integration of IT and business planning. Thus, “Boards are also beginning to take a strategic view of how technology trends are shaping their companies’ futures…Deeper board involvement is also serving as a mechanism to cut through company politics and achieve endorsement of larger, integrated technology investments.”
- Boards are having a ‘more frequent and more constructive role in IT strategy.’ Conversations are changing with ‘executives suggesting that a significant gap exists between the conversations their boards ideally should be having and the ones the boards actually were having.’ In a sample of nearly 1600 respondents, nearly half of boards discussed IT topics only once or twice a year.
- 12% of boards do not address technology or IT issues at all! This compares with only 28% who discuss how technology will affect the industry, though they agree an ideal rate of frequency is twice as often at 53%.
- Clearly, given the importance of technology, ‘many companies are considering a more structured approach to board engagement.’ In fact, some national governance bodies agree. For example, South Africa’s ‘code of company governance mandates regular interactions between boards and executive management on technology topics.’
- Because boards are becoming more involved in technology matters, ‘it means that corporate directors, just like their CIOs, have to raise their game, are seeking to better understand technology issues and their business implications.’ In their survey, McKinsey found that by having at least 1 person on the board knowledgeable about technology, 47% said it led to incorporation of ‘technology considerations into strategic discussions.’
And from “Delivery Large-Scale IT Projects on Time, on Budget and on Value,” the key points I’d like to extract are:
- “On average, large IT projects run 45% over budget and 7% over time, while delivering 56% less value than predicted.” This is simply dismal. Imagine if we had these results from marketing or finance projects!
- McKinsey identified four groups (quoted below) of issues that cause most project failures — and I believe nearly all of these are people related:
- Missing Focus — due to unclear objectives and lack of business focus
- Content Issues — shifting requirements and technical complexity
- Skill Issues — unaligned team and lack of skills
- Execution Issues — unrealistic schedule and reactive planning
- Good stakeholder involvement — which means having excellent interpersonal skills and establishing successful coalitions — ‘involves foresight when it comes to selecting vendors and negotiating contracts with them.’
- Building effective teams is essential. “Project teams need a common vision, shared team processes and a high-performance culture. To build a solid team, members should have a common incentive structure…in contrast to individual work-stream goals.” Doing this demands exquisite HR execution and a recognition that technology and the way people work are inextricably linked.
People indeed matter when evaluating, planning, implementing and examining technology projects. With the obviously critical role IT projects and technology itself play in a corporation’s success, excellent outcomes can only be achieved by IT and business joining forces and working as an integrated team.