why projects fail: obstacles and solutions

Why Projects Fail:y jObstacles and Solutions

Michael KrigsmanAsuret, Inc.617-905-5950

k ig @ tmkrigsman@asuret.com

Twitter: @mkrigsman

Failure is common:30-70% of projects are

late, over-budget, ordon’t meet expectations.

Total failure worldwide:trillions of dollars (SWAG*)

*silly wild ass guess based on independent research

*silly wild-ass guess based on independent research

http://blogs.zdnet.com/projectfailures/?p=6142

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

We ignoreWe ignorewarning signs

Cost to projects is highCost to projects is high.Impact on the businessImpact on the business

is higheris higher.

Ni htNightmareS c e n a r i oS c e n a r i o

Levis can’t fill ordersfor one week = 98% decline in quarterly decline in quarterly profits

http://blogs.zdnet.com/projectfailures/?p=917http://blogs.zdnet.com/projectfailures/?p=935

Understanding failureUnderstanding failure

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 P j t f d d ith t b i ti Projects funded without business case, executive

sponsorship and so on Distortions: poor judgment, politics, silos,p j g , p , ,

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 problemscause 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 C Causes:

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

http://blogs.zdnet.com/projectfailures/?p=1304 http://blogs.zdnet.com/projectfailures/?p=1358

Alignment mismatches drive poor decisionsPoor communication, hidden agendas, and conflicting measures of success create gaps

Information silos IT / lines of business Internal / external groups

Business needs become disconnected from t t g d l i gstrategy and planning

Execution then suffers

Managementvsvs.

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:

A i i l l i d h d l Aggressive internal planning and schedule Insufficient testing of new system before replacing old Management accepted responsibility Plausible scenario: management pressured IT to accept aggressive

schedule

http://blogs.zdnet.com/projectfailures/?p=1015

Devil’s Triangle

Dysfunctionalindustry structure createsindustry structure creates

overlapping andconflicting agendasg g

Devil’s TriangleConflicts of interest are embedded in the enterprise software industry (customer gets fleeced)

Confused buyersSilos and internal conflictsSilos and internal conflicts

Wacky system integratorsCustomer success vs. consulting

revenue

Schizophrenic software vendorsLoyalties split between

customers and integrators

[W]hen you’re marching through hell[W]hen you re marching through hell,just keep marching.

Charles BurbridgegLAUSD’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=130http://blogs.zdnet.com/projectfailures/?p=436http://blogs.zdnet.com/projectfailures/?p=576

Preventing failurePreventing failure

Observe warning signs Ambiguous or diffuse project ownership Stakeholder complexity Who’s calling the shots?

Conflicts of interestI i t i (h d t t di i d ) Inconsistencies (hardest to discern in advance) 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

( t i )?(procurement issues)? How will the project be governed (who, how, when)? How will the project be controlled (planning monitoring How will the project be controlled (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 Evaluate your organization s collaboration capabilities

And beyond Increase appropriate communication to reduce information

silos Connect social networks to support continuous

organizational improvement Facilitate rapid effective and ethical decision making Facilitate rapid, effective, and ethical decision-making Align IT with measurable business results Change project culture, not corporate cultureg p j , p

Which all sounds good…

T lkTalkischeapcheap

Preventing failurePreventing failure

Is easier saidsaidthan donethan done

First, recognize that vulnerabilities exists

Factual data is essential

Facilitate consensus across silosUse non-threatening techniques to:

Avoid bias

Remove emotion and political pressurese 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 indirectlySimple questions, range of responses, and importance

Evidence-based planning

Raise profile of success factors

Target specific issues for focusa get spec c ssues o ocus

Create concrete plans

Coordinate action against plan Coordinate action against plan

Rinse and repeat as needed

Simulationand

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 improvementachieve 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, CEOMichael Krigsman, CEOEmail: mkrigsman@asuret.comWeb: http://asuret.comBlog: http://blogs.zdnet.com/projectfailuresTwitter: http://twitter com/mkrigsmanTwitter: http://twitter.com/mkrigsman+ 1 (617) 905-5950

why projects fail: obstacles and solutions

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