is failures - state of the art ?

© Jan Devos - 1

Mislukking of succes?

Stand van zaken

Jan Devos• ELIT-Lab & Industrial Management

• Faculty of Engineering• Ghent University

• Graaf Karel De Goedelaan 5• BE-8500 KORTRIJK - BELGIUM

• T: +32 56 24 12 72• F: +32 56 24 12 24

• e-mail: jan.devos@howest.be• e-mail:  jgdvos.devos@ugent.be

• linkedIn: www.linkedin.com/in/jangdevos• website: http://ela.howest.be/jdevos

Projectbeheer: kan het beter?

IS Failures

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•Recent paper (18 May 2010)

•Project failure en masse: a study of loose budgetary control in ISD projects

• K. Conboy (NUI Galway, Ireland)

• This paper represents a case of extreme information systems development (ISD) failure en masse, where all but two of the 22 projects in a business unit went over budget, causing senior executives to refocus their strategic priorities and cancel all current and potential projects that followed. This study focuses specifically on the two best performing (12 and 4% under budget) and worst performing (223 and 320% over budget) of these projects.

• European Journal of Information Systems (2010) 19, 273-287. doi:10.1057/ejis.2010.7; published online 18 May 2010

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Project/Company Damage Year

London Ambulance Service (LASCAD) £1,1 - £1,5 mio 1992

Denver International Airport $2.000.000.000 1995

Sydney Water AU$61.000.000 2000

Feniks (Belgium) €12.000.000 2007

Hershey’s $112.000.000 2000

Fox-Meyer Drug Company $18.000.000 1994

Confirm (Hilton, Mariott, Rent-A-Car) $125.000.000 1988

TAURUS (UK Stock Exchange) £75 - £300 mio 1993

Accounting System at Cambridge University £10.000.000 2001

Royal Melbourne Institute of Technology (RMIT) AU$47.300.000 2001

Cambridge University (accounting system) £10.000.000 2001

Hit Parade of IS Failures

• Best kept (public) secret worldwide ?

• A lot of research for almost 45 years • 1967, Management misinformation systems, (Ackoff)• 2010, Project failure en masse: a study of loose budgetary control in

ISD projects (Conboy)

• Much is known - less is done !• 1975 / 1995, The mythical Man-Month (Brooks)

• Failure to learn ? CIOs - IS-Researchers• 1999, Learning failure in information systems development (Lyytinen

& Robey)• MISQ, EJIS, ISR, JAIS, …

IS Failures

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What are IS Failures ?

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Engineering Failures?

What are IS Failures ?

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An IS Failure is an outcome of a human process

1994 1996 1998 2000 2004

Failed projects 31% 40% 28% 23% 18%

Challenged projects 53% 33% 46% 49% 53%

Succeeded projects 16% 27% 26% 28% 29%

Standish Group

Research on IS failures

What is an IS Failure ?

What is an IS Success ? Does the ‘iron triangle’ BTS measures success ? Does it prevent from failure ?

Failure ≠ NOT(Success)

How do we measure failures & successes ?

How do we prevent from failure ? Or how do we conduct successful IT projects ?

Research on IS failures – WHAT ?

Expectation failures (Lyytinen & Hirschheim) = the inability of an IS to meet a specific stakeholder group’s expectations

Termination failures (Sauer) versus Perpetual beta (calculation of ∏ ?)

Project Runaways (Ewusi-Mensah, Keil) & Project Abandonment• IS Project Runaways = Escalation of commitment• IS project abandonment is defined as a phenomenon that

concerned with the anticipated failure of the project prior to its full implementation

Outsourcing failures (Devos)• Moral Hazard: lost of trust • Adverse Selection: Lemon Markets

Engineering failures ? MTBF ?

Research on IS failures – WHAT ?

Expectation failures (Lyytinen & Hirschheim) = the inability of an IS to meet a specific stakeholder group’s expectations

• Correspondence failures

• Process failures

• Interaction failures

•de patiënt:

• wordt snel afgeleid• schenkt weinig aandacht aan zijn omgeving• kan niet goed zijn aandacht bij één zaak houden

(concentratiegebrek)• geeft onvoldoende aandacht aan details• lijkt vaak niet te luisteren als hij/zij direct wordt

aangesproken• antwoordt vaak al uit voordat de vragen afgemaakt• verstoort vaak bezigheden van anderen of dringt

zich op (bijvoorbeeld mengt zich zomaar in gesprekken)

Managerial Attention Deficit & Disorder (MADD)

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Research on IS failures

Cover-UpOrganization

Deaf, Dumb and BlindOrganization

Healthy Organization

Ostrich Organization

Mum Effect

Deaf Effect

high

high

low

low

Blowing the whistle on troubled software projects (Keil, 2001)

bad news is transmitted less frequently than good news

reluctance to hear bad news

•Moral Hazard (Opportunistic behavior)▫Trust versus Control

•Adverse Selection (Lemon Markets)

• 2009, IT Governance in SMEs: Trust or Control? (Devos et al.)• 2011, The Theory of the Lemon Markets in IS Research (Devos

et al.)

Outsourced IS Failures

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Lemon Market

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= €1

= €0.1

ICT

Lemon Market

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€1

€0.1?

Lemon Market

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€0.55

€0.55 - €1 = -€45

€0.55 - €0.1 =

€0.45

Lemon Market

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€0.55

€0.55 - €0.1 = €0.45

€0.55 - €0.1 = €0.45

€0.55 - €0.1 = €0.45

Lemon Market

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€0.23

€0.23- €0.1 = €0.13

€0.23 - €0.1 = €0.13

€0.23 - €0.1 = €0.13

Research on IS failures - HOW?

• Resistance against change

• 1983• Power, Politics and MIS implementation (Markus)

• 20 years later:• - 2003, "Computers can land people on Mars, why can't

they get them to work in a hospital?" - Implementation of an Electronic Patient Record System in a UK Hospital (Jones)

• - 2004, Informating the Clan: Controlling Physicians' Costs and Outcomes (Kohli & Kettinger)

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Organizational Change

Nov. 2010

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Organizational Change

Research on IS failures - better ?

- Maturing the discipline of PM

- Alternative approaches to PM

- Real Options

- HRO

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Alternative approaches to PM

• PM does not guaranteed success nor eliminates failures• PM too much focused on ‘how-to-do’

• Management of meaning iso management of control ? • Critical perspective on projects: focus on values (technology is

not neutral), ethics and morality equally important than efficiency & effectiveness ?

• Research on SMEs: Trust vs Control ? (Devos, 2009)

• “Political” PLC

2003, The chimpanzees’ tea party: a new metaphor for project manager (Drummond & Hodgson)

2006, New Possibilities for Project Management Theory: A Critical Engagement (Cicmil & Hodgson)

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PLC and the ‘Political’ PLC

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InceptionConception

Requi

rem

ents

Design & Dev.

Implem

entat

ion

Term

inat

io

n

PLC Wild enthusiasm

Disillusionme

nt

Tota

l

conf

usio

n

Search for the guilty

Punishment of

the innocent

Prom

otio

n of

non-

particip

ants

“P”PLC

Alternative measures: real options

Real Options Pricing Models (ROPMs)

• Suitable for large IT infrastructure investments• Future revenue streams are unclear (unsuccessful ?)• Invest now – harvest later• An initial expenditure on IT creates the right, but not the

obligation to obtain the benefits associated with further development

• Management has the freedom to cancel, defer, restart, or expand the project

Benaroch, M. and R.J. Kauffman, “A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investments,” Information Systems Research, 10 (1), 1999, pp. 70-86.

John A. Campbell, Real options analysis of the timing of IS investment decisions, Information and Management, v.39 n.5, p.337-344, March 2002

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HRO concept

• High Reliability Organizations

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HRO concept

• Organizing for High Reliability: Processes of Collective Mindfulness (Weick, 1999)

• Preoccupation with failure (“Failure is not an option”)

• Reluctance to simplify interpretation (beware of ‘frameworks’, ‘models’, ‘mindsets’, …)

• Sensitivity to operations (“situational awareness”)

• Commitment to resilience (“continuous management of fluctuations”)

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HRO concept

• Lessons from HROs

• The expectation of surprise is an organizational resource because it promotes attentiveness and discovery

• Anomalous events should be treated as outcomes rather than as accidents, to encourage search for sources and causes

• Errors should be made as conspicuous as possible to undermine self-deception and concealment

• Reliability requires diversity, duplication, overlap, and a varied response repertoire, whereas efficiency requires homogeneity, specialization, non-redundancy and standardisation

• Interpersonal skills are just as important in HROs as are technical skills

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End

Questions ?

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