It’s a sobering statistic: nearly 70 per cent of IT projects fail in some important way, putting the economic impact worldwide at three trillion dollars, which corresponds to 4.7 per cent of global GDP. This, according to a two-part report published by ZDNet, affects all industries – including telecommunications.

The report even refers to failed CRM programs as an example of just how bad things can be. Over ten years the majority of these have failed and in virtually every case of failure, management failed to anticipate serious problems.

“IT failures happen when managers exercise insufficient judgment, possess too little experience, hire the wrong people, ignore warning signs and, crucially, fail to involve affected employees in a way that eases the path to success.”

All too often senior managers ultimately responsible for IT projects are too distant from them, lack sufficient experience or skill to mange large complex projects and are often stuck managing multiple projects as program managers. This effectively dilutes their capabilities and provides a perfect environment for them to miss critical details that may point to a project failing, before it’s too late.

One damning quote from the article is that “too many executives expect technology to magically solve business problems, an almost delusional misconception that leads to unhealthy risk.” Oh dear, there’s that dreaded four-letter word again – risk. It seems no matter how much is written in the subject, how many warnings go out regarding the repercussions of ignoring it businesses continue to ignore the dangers. And that’s despite organizations like the TM Forum, producing guidelines and process standards useful in big IT transformation projects that are happening in almost every telecoms’ operation worldwide.

Also high on the ‘risk scale’ are conflicts of interest among CSP IT departments, vendors and integrators. Implementing enterprise software typically involves multiple groups, each with its own set of interests, goals, and measures of success. The more parties involved, the more chance of conflict, risk and finger-pointing if, or more likely when, something does go amiss.

That makes sense when you consider that a CSP is undertaking transformation with the ultimate goal of becoming more efficient and reducing costs (and providing a better customer experience, of course). Vendors are doing their best to get their solution up and running as quickly as possible to get acceptance and, subsequently, payment. Systems integrators may benefit from on-time, on-budget delivery of a project but they can also benefit from project over-runs, change requests and disruption.

That’s not to say that this is the norm, but it does happen and it’s a certain bet that anyone involved in IT projects has seen a scenario like this at some point in their career. For those claiming this is a sweeping generalization the answer would also be yes, after all, this is a blog. However, the issues cannot simply be swept away because they all add to project risk.

The conclusion drawn by the ZDNet report is that “responsibility and accountability for IT project success or failure lies with senior management – transferring blame to project managers or third parties is ultimately a misguided effort that will not solve this massive problem. It is time for the business community to expose IT project failures as an important source of economic waste and take steps to fix the problem.”

Perhaps if less time were spent writing reports on the progress of projects, and making excuses for failures, and more time mitigating the risks in the first place, maybe we would see a lowering in the percentage of failure. Too much time is spent subjectively measuring project success, rather than quantitatively measuring a project using KPIs, scorecards and dashboards monitoring simple and recognizable success factors, e.g. proper business case built, identification of correct staff and how they will be utilized and milestone success rate.

Who knows how many millions of dollars the simplest measures could save the industry as a whole?

First published at TM Forum as The Insider, 19 April 2012