Understanding Information Technology System Project Failure

By: Michael BuryMIS4-22-10

Abstract Over the last 20 years failure has become

synonymous with Information Systems (IS) Projects.

This research is aimed to understand the reasons for IS project failure.

IS project failure does not occur in any single industry and can happen anywhere at anytime.

IS Failure is not caused by just tech failures but organizational and functional problems in a business.

20 Critical Success Factors (CSF) are introduced that are vital to the success of a project.

Introduction Case Studies chosen from the last

fifteen years from Ireland, UK, and USA will act as examples to show that IS project failure can occur anywhere and anytime.

Four case studies of Information System development are analyzed (Taurus, DIABHS, ISIS, and NATS)

Information System (IS) Serves to coordinate the work of different

organizational functions and is the core of any business.

Aims to increase efficiency and effectiveness of business practices.

Implementation of an IS involves the design, delivery, and use of the software systems in the organization.

Information Technology (IT) is the enabling tool that powers the IS. IT is used by IS.

Defining an Information System The authors Definition:“An Information system is composed of

software, hardware, communication systems, and people. It is a critical investment for organizational survival. It increases the efficiency and effectiveness of daily business by integration organizational processes and structures”

Critical Factors for Project Success

Baker et. al.(1983)

Morris and Hough(1987)

Pinto and Slevin(1989)

Turner, J.R.(1993)

- Clear Statement of Requirements

- Proper Planning- Competent Staff- Clear Vision and

Objectives- Hard Working Staff- Leadership- Resources and

Funding- Low start-up

Difficulties- No Politics

- Clear Statement of Requirements

- Proper Planning- Competent Staff- Resources and Funding- Low start-up

Difficulties- No Politics

- User Involvement- Executive mgt.

Support- Competent Staff- Hard Working Staff- On time, under

budget- Satisfies owners

needs- Leadership- Teamwork- No Politics

- User Involvement- Executive mgt.

Support- Competent Staff- On time, under

budget- Satisfies owners

needs- Teamwork- No Politics

CHOAS REPORT(1994)

Wateridge, J.(1995)

Whitaker, B.(1999)

Boehm, B.(2002)

- User Involvement- Executive mgt.

Support- Clear Requirements- Proper Planning- Realistic

Expectations- Smaller Milestones- Competent Staff- Ownership- Clear Vis. & Obj.- Hard Working Staff

- Project achieved purpose

- Satisfactory benefit to owner

- Satisfied needs to owner

- Meets pre-stated objectives

- On time, under budget- Satisfied project team

needs

- Good Project Planning

- Strong Bus. Case- Tom mgt. Support- Schedule time

keeping- Within Budget- Good Estimates- Strong

requirements- Ability to meet req.

- Complete requirements

- User Involvement- Resources- Realistic

Expectations- Executive Support- No scope extension

Analysis of CSF Most occurring qualities of Successful

systems:-On time, under budget.-Project Delivers its functionality.-Clear Vision & Objectives-Executive Management Support

Understanding IS Project Failure 70% of large-scale IS investment fail. Project must meet a number of

objectives and goals. Important parameters to meet will be:

-Return on Investment-Profitability-Competition-Market Ability

Defining Project Failure Author believes in a degree of failure.

Category of Failure Description of Failure

1. Correspondence Failure2. Process Failure3. Interaction Failure4. Expectation Failure

-The IS fails to meet it’s designated objectives.

-The IS overruns it’s budget or time constraints-The users maintain low or non-interaction with the IS-The IS does not meet stakeholders expectations.

LEVEL OF FAILURE

LEVEL ONE(MINOR)

LEVEL TWO(MAJOR)

LEVEL THREE(CRITICAL

- Profitability- Poor Estimates- Unproven Tech.- Lack of Res.- Lack of Features- Lack of Usability- Lack of Project

organization- Transparency in IS

Project- Progress Meetings

- Goals not all achieved- Complex Solutions- Lack of Planning- Lack of User

Involvement- Lack of Resources- Lack of Commitment- Unrealistic

Expectations- Lack of Executive

Support- Changing requirements

and specifications- Schedule overrun- Budget overrun- Poor leadership and

management- Debugging incomplete- Lack of ownership- Too many vested

interests

- Scrapped Before Completion

- Vendor’s Inability to meet requirements

- Client consultation during development stage.

Levels of Failure Level one is considered minor. Final IS

project does still meet its objectives and is completed.

Level two failure is major. IS project does not meet all requirements and will not be achieved within budget and one time.

Level three is critical failure. IS project odes not meet any of its requirements and objectives. Most likely to be scrapped after running over time and budget.

Case Studies Two of the four case studies resulted in

failure (Taurus and ISIS) Two cases succeeded (DIABHS and

NATS)

Taurus Develop an automated transaction

settlement system for the London Stock Exchange.

Electronics submission would enable the securities Industry to eliminate paper transactions.

Project began in 1998. Aim to create a simple system for large

investment houses.

Design and Implementation An 18-month time frame was demanded

for completion. Involvement of new and untested

technology and project complexity made this deadline nearly impossible.

The Design Stage initially scheduled for two months lasted two years.

Lack of Leadership and the spread of ownership steered project toward failure.

Design and Implementation (Continued) Decision was made to use off-the-shelf

software to speed up development cycle.

The software was nearly 20 years old. The use of state of the art technology

and software on hardware that was twenty years old was illogical.

Project team believed that building the outward part of the system first would make interested parties happy.

Outcome Original budget = £6 Million Ending budget = £800 Main factors due to failure of project were

identified as power, politics, and responsibility. The persistence to deny failure dragged the

project on and is identified as a socio-economic problem rather than technological.

Lack of Leadership and Management had detrimental effect on the project/project team.

Taurus project was labeled a project 3 failure because the majority of the CSF were not achieved.