Decoding the IT Value Problem: An Executive Guide for Achieving Optimal ROI on Critical IT Investments

CHAPTER 2

Why IT Projects Fail

EXECUTIVE SUMMARY

Almost all IT projects require teamwork and collaboration across multiple functional areas of the company. The success of an IT project depends less on technology than it does on managing a smooth transition from an old business process to a new business process.

Technology Is Not the Problem

It is not unusual for IT projects to fail. Some estimates put the failure rate as high as 90 percent. I think we can agree that a failure rate of that level would be considered unacceptable in almost every other part of a company. Why such a high rate of failure is considered “normal” for the IT organization is too deep a question to resolve here. So let's focus instead on a simple problem: Why do IT projects fail?

The simple answer is this: lack of adequate governance. That's it in a nutshell. IT projects don't fail because of bad technology. Almost every IT project I've ever worked on has relied on established, proven, and highly stable technology.

Technology is not the problem. We are the problem.

When I say we, I mean those of us who have not insisted on putting a robust IT governance process into place before agreeing to move forward on an IT project.

I recently spoke with Vallabh Sambamurthy, a global expert in digital business innovation and competitive strategy. Vallabh is chairperson of the Department of Accounting and Information Systems (AIS) at Michigan State University's Broad College of Business. He spoke to me about the link ...