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Overcoming ICT project failures - A practical perspective

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In today's global economy, exploiting competitive advantage, increasing market share, enhancing efficiency, reducing costs and eliminating bureaucracy are becoming common objectives on the agenda for business owners and organizations. Through the proper implementation and adaption of Information and Communications Technology (ICT) projects, organizations are recognising the ability to realise such goals more effectively. Notwithstanding the strategic recognition of implementing ICT projects however, the ICT industry is consistently faced by a high level of ICT project failures, which is of deep concern to all the business owners, board of directors as well as project managers. The motivation of this paper is to critically analyse the performance of ICT projects whilst establishing the various factors leading to such situations. This is achieved by undertaking a comprehensive and holistic review of prominent reports on a multitude of scenario cases together with in-depth identification of effecting issues leading to reported failures. To add value to the current research a number of suggestions are finally presented that, together with the implemented project management strategy, will assist in ensuring a successful ICT project delivery.
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978-1-4799-0462-4/13/$31.00 ©2013 IEEE
Overcoming ICT Project Failures – a Practical
Perspective
K. Fenech and C. De Raffaele
Middlesex University Malta
Pembroke, Malta
kfenech@gmail.com, cliffordderaffaele@stcmalta.com
Abstract
In today’s global economy, exploiting competitive advantage,
increasing market share, enhancing efficiency, reducing costs and
eliminating bureaucracy are becoming common objectives on the
agenda for business owners and organizations. Through the
proper implementation and adaption of Information and
Communications Technology (ICT) projects, organizations are
recognising the ability to realise such goals more effectively.
Notwithstanding the strategic recognition of implementing ICT
projects however, the ICT industry is consistently faced by a high
level of ICT project failures, which is of deep concern to all the
business owners, board of directors as well as project managers.
The motivation of this paper is to critically analyse the
performance of ICT projects whilst establishing the various
factors leading to such situations. This is achieved by
undertaking a comprehensive and holistic review of prominent
reports on a multitude of scenario cases together with in-depth
identification of effecting issues leading to reported failures. To
add value to the current research a number of suggestions are
finally presented that, together with the implemented project
management strategy, will assist in ensuring a successful ICT
project delivery.
Keywords-ICT project success; ICT project failures; ICT
Governance; ICT project execution; Risk Management
I. INTRODUCTION
Despite the strategic importance and trust placed in
implementing ICT projects, organizations are being faced by
an exorbitant high percentage of ICT project failures. This fact
has been of deep concern for both academics and industry alike
with various studies held by prominent decision makers,
project managers and researchers to identify potential causes
[1-3]. Despite the investment and progress made within the
ICT arena, the high level of ICT project failure rate is still on
the rise and cannot go unnoticed [4-7].
ICT projects pose a unique set of challenges to the project
managers which differ substantially from the characteristics of
traditional non-ICT related assignments [8]. The consistent
advancements in technology in which the ICT projects are
expected to operate leads to a considerable increase in risk and
uncertainty when compared to the non-ICT counterpart which
operate on existing and well-established
technology/infrastructure [9]. Furthermore, apart from the
conventional management of resources such as equipment and
people, ICT projects are also heavily dependent on continuous
user involvement, appropriate risk management strategies and
adoption of the right project management methodology [10].
Another major characteristic assigned with ICT projects is
the dynamic approach adopted due to ever changing scope and
requirements which inherently increase project risk levels
throughout project duration [11]. This high instability and lack
of tangible delivery expectations present a considerable
challenge in order to predefine the criteria which will constitute
project success [12]. This matter has been heavily debated
within literature and a general consensus on the underlying
core dimensions that symbolize project success have converged
to three main criteria of adherence to established timeframes,
allocated budget and compliance to established quality and
specifications [13-15]. These three factors are commonly
referred to as the ‘Iron Triangle’ [16]. Nevertheless, various
alternate studies postulate that such criteria are consistently
evolving and other non-standard metrics like client satisfaction
and cooperation are continuously gaining recognition. This
reflects the fact that individual stakeholders within ICT
projects verify project success from uniquely different personal
perspectives.
Project success is also being affected through the added
complexity of noticeable different elements driving the
implementation of ICT projects within the private and public
sectors. These domains exhibit different characteristics and
challenges which further demand separate and peculiar
approaches due to the different practices and norms in each
respective domain [17].
This paper seeks to identify the main causes which lead to
ICT project failures and proposes a number of practical
initiatives in order to assist stakeholders in overcoming such
difficulties. The remainder of this paper is structured such that
a comprehensive literature review to establish project success
and failure rates is critically analysed within Section 2. Section
3 elicits and combines the sources of such failures on which the
suggestions in Section 4 are founded. Finally concluding
comments are presented within Section 5.
II. ANALYSIS OF ICT PROJECT PERFORMANCE
The concern for lack of ICT project success, which is
becoming the norm rather than the exception [18-20], has been
recognized and researched by various entities which constantly
highlight the difficulties ICT projects are encountering both in
the public and private sectors irrespective of the project
dimensions, organisation, target audience, domain, project size
or geographical location [21]. Notwithstanding the vast range
of criteria that define a successful project it is commonly
established within academia and industry to employ the well
accepted criteria of cost, time and quality/specifications as a
common yardstick for all projects [22]. The study done for the
Harvard Business Review [23] concludes that 16% of the
projects analysed, incurred a cost overrun of over 200% whilst
delivery date was extended by 70% on the original timeframes.
This is corroborated by another independent study by
McCafferty [24] which reveals that 25% of the projects will not
succeed in meeting the requirements, amounting to around $63
billion annually spent on such failed initiatives.
A study commissioned by KPMG [25] on success and
failures of ICT projects in over six hundred organizations
within twenty two different countries resulted in 49% having at
least one project failure during the previous year, 86% of those
analysed lost up to 25% of expected project benefits whilst
only 2% realised the intended ICT project objectives. This
study highlights that such trends are identical for entities within
the public sector which accounted for ninety six organisations
or 16% of the targeted organisations studied.
Whitfield [26] on behalf of European Services Strategy
Unit analysed failed UK ICT projects within the public sector
over a period of ten years. His study on 105 outsourced
projects concluded that 33% suffered a considerable amount of
delays, 30% had their contract prematurely terminated and on
average projects had a cost overrun of 30.5%. Additionally,
57% of projects witnessed an excessive cost overrun
amounting to a total cost of GBP 9 billion [21]. Similar failure
rates were also derived by the OASIG study [22], performed by
45 experts with an average of 20 years of experience within
their field who are employed within Universities or
Consultancy firms. They concluded that a failure rate of 70%
existed in over 14,000 ICT organisations analysed [27].
A domain specific study commissioned by Bull Survey UK
[28] in 203 ICT, telecommunications, finance and business
manufacturing companies transpired that the project
requirements were not met by 37%, whilst 55% went over
budget and over 75% exceeded the established project
timeframe. Considerably, similar figures were attained by the
Tata Consultancy Services which analysed over 800 ICT
projects within 8 different countries. The study revealed that
49% incurred cost overruns, 62% missed established deadlines,
41% failed to achieve the established business value or attain
the expected return on investment and 33% did not meet the
agreed level of expectations [29].
The periodically conducted Chaos report by the Standish
group consistently highlights that within various studies held
over a 15 year period, the success rate criteria were adhered in
respect to cost, time and delivery only in 32% of ICT projects
[30]. From the remaining projects, 44% only succeeded
partially whilst 24% were deemed outright failures. The study
further highlights that such figures alter minimally throughout
the years as evidenced during seven independent studies held
from 1994 to 2009. Such trends seem to be consistent with
similar analysis conducted in Australia, where Murphy [31]
analysed various public sector ICT projects. This study
concluded that actual project cost regularly doubled the
allocated budget, whilst a number of projects experienced
substantial delays where in certain instances this amounted to
200-300% of the original planned timeframes. This frequently
resulted in a lack of materializing project objectives and
expectations. These findings were concurred by Young [32] in
his report targeted towards Australian ICT projects where 15-
28% of ICT projects were abandoned prior to implementation,
around 30% experienced significant cost overruns sometimes
up to 189% and less than 20% had achieved all the established
performance objectives.
These results were further substantiated with the global
study held by Gartner [33] for 845 ICT companies employing
more than 1000 employees and soliciting the assistance of
specialized External Service Providers. This report concluded
that 44% of the analysed projects exceeded budget allocations,
42% failed to be delivered within agreed timeframes and over
42.5% lacked in achieving all expected benefits by the end of
the project.
III. ICT PROJECT FAILURE CRITERIA
As highlighted within each of the concrete industry study
analysed, ICT projects do not fail to achieve success due to a
specific reason, but normally a combination of issues and
factors that were not identified and tackled in due time [20]. In
depth analysis of the reasons mentioned within independent
studies explicitly illustrates a high degree of correlation within
predominant failure factors in ICT projects. Unfortunately, the
provided descriptions tackle such issues from a predominantly
narrow perspective, failing to grasp the holistic implications
each concern delivers.
Following our previous work presented in more detail in
[34], thousands of ICT projects were collectively examined
within 13 independent prominent reports which elicited 109
non-unique failure criteria. In [34], each of the failure criteria
highlighted from the various practical case-studies were
analysed and grouped under three groups which are evidently
largely responsible for project failures. These fundamental
failure pillars of Project Planning and Direction, Project
Management and Execution, and User Management, although
intrinsically related are distinct enough to provide a universal
understanding of challenges faced within the various tasks of
an ICT project life cycle.
The percentage contribution of identified project failure
criteria under each respective category as derived from [34] is
depicted in Figure 1. This study resulted in 44 identified issues
being predominantly related to tasks within the Project
Planning and Direction remit. Failure criteria arising due to
lack of appropriate Project Management and Execution
amounted to an additional 37. Furthermore, User Management
was responsible for the other 31 criteria that hindered project
success.
Figure 1. Ratio of aggregated project failure characteristics within the three
identified fundamental pillars [34]
The derived results imminently portray the fact that the
majority of project failures are attributed towards issues in
appropriate Project Planning and Direction – 39.28%. Despite
the researched advancement within Methodologies for Project
Management and Execution Strategies, 33.04% of recognized
issues that compromised project success, are endorsed within
this classification. A further 27.68% relates to lack in properly
managing project stakeholders a task that is performed in User
Management.
IV. MITIGATING ICT FAILURES
The rate of ICT project failures is known to far exceed that
of success [20] and this is usually due to the conflicting
requirement for project teams to simultaneously focus on a
variety of attributes and criteria to ensure project success [33].
Thus, the performed study provides a number of valuable
recommendations extracted from the core triggers of project
failures in each of the fundamental identified project pillars.
Together, these will complement the adopted project
management methodology to enhance project success
assurance, whilst assisting management in ensuring that the
recommendations are implemented in a number of manageable
objectives and tasks.
A. Project Planning and Direction
Project Planning is a core task within any project
management methodology projecting a roadmap to ensure
alignment of project deliverables with the business strategic
objectives [35]. Often, it transpires that due to tight delivery
schedules project planning will be one of the tasks where time
savings will be done and therefore high level plans are
prepared without assessment of the necessary detail.
Attention should also be given to the project scope, which
must be concise, clear and unambiguous and endorsed by the
project sponsor/champion whilst communicated to all project
stakeholders. This must be accompanied with an exhaustive
detailed set of requirements derived from the feedback
acquired through the active and continuous collaboration from
all the relevant stakeholders. Moreover, it should clearly
include a comprehensive set of requirements and serve as a
core resource for further project planning and management
leading in the establishment of a comprehensive ICT project
plan.
The derived ICT project plan should furthermore include
much more than the traditional Gantt chart, and ensure that the
assumptions taken when formulating such a plan are well
highlighted while providing a description of the dependencies,
project cost, agreed measures of success, required
skills/resources/expertise, project quality procedures, change
management and applicable communication strategies. All
these must be given due importance because they affect the
stability of the ICT plan [36]. A well-developed ICT project
plan should improve efficiency, increase understanding, and
consequently aid to reduce uncertainty for all stakeholders.
This is commonly achieved by minimizing the use of
buzzwords, abbreviations and technical jargon within the
document. Furthermore, the project plan must be split up into a
number of manageable tasks with a Work Breakdown Structure
(WBS) to ensure the delivery of milestones result well within
the approved framework. The planning of each milestone
should be performed with a strategic checkpoint scheme to
enable the monitoring of progress at key instances throughout
the project duration. For each task the relevant resource
requirements including timeframes, activities, assigned
responsibilities and deliverables must be established and
communicated to all relevant stakeholders.
The project plan must acknowledge that the ICT project
will be subject to a number of factors affecting its course
alignment. These project risks can be mitigated by establishing
various contingency strategies at both technical and operational
levels within a risk assessment framework. This should be
further reflected by allocating an appropriate budget and
timeframe overheads within the project plan. Together, these
account for issues which would not be completely or possibly
identified during the planning stage, but will invariable arise
due to the dynamic nature of the operational environment.
B. Project Management and Execution
Despite that the planning phase is an integral part of any
project methodology, project management is considered as a
fundamental discipline and process which includes a set of
tools to assist and facilitate the implementation, sustainment,
monitoring and assessment a number of activities that are
targeted to achieve established goals and vision [37]. This
technique is recognized as the concrete stage which optimizes
the right balance of processes, people and technology to
achieve the expected outcomes and objectives.
The careful selection and adaptation of the most suitable
project management methodology by all stakeholders is of
utmost importance within an ICT project, as this will assist the
project manager in steering, controlling and managing the
project in the right direction. Moreover, such a technique will
aid project governance by establishing a set of policies,
standards and procedures that ensure quality consistency
during project execution whilst reducing conflicts and
misinterpretation.
The ability to adopt ‘customer centric’ techniques, which
provide the key facility to embrace project changes throughout
the project duration, are evermore proving indispensable for the
achievement of success throughout current evolution of ICT
projects. In contrast to traditional project management
techniques which envisaged change as a disruption to the
predefined project plan [38], modern methodologies recognize
that change is inevitable and should be embraced and handled
within a strict and structured framework to eventually result in
added value to the delivered product.
This adaptable approach is also being reflected in software
development methodologies which promote flexibility within
their processes and focus on frequent, iterative and incremental
results. Such agile approaches are providing positive results in
development projects with studies in 2011 indicating a 28%
registered increase in successful projects when compared to
highly rigid development techniques [39].
The successful execution of a project management
discipline features the continuous active involvement of
numerous stakeholders within pre-defined roles and
responsibilities which are clearly communicated across the
project team including the respective reporting structure and
dependencies. The appropriate assignment of such roles is
frequently iterated in prominent methodologies such as
PRINCE2 [40], nevertheless it is imperative that apart from
defining roles, the establishment of required skills and criteria
to fulfil each role are well understood. This will in turn assist in
ensuring that the right person to fit such role is selected and not
contrarily. Moreover, individual roles must integrate within a
team work approach during project execution. Apart from
facilitating stakeholder communication, this will ascertain that
participation and commitment will create the right synergies
for the exchange and sharing of ideas and knowledge required
to achieve the project objectives.
A common issue regularly leading to project failure lies in
the appropriate control of project changes due to ever-changing
environmental factors [41]. This can be mitigated by having a
defined Change Control System, that while analysing the
impact on the current project plan, provides the project team
with an ability to raise and properly evaluate changes prior to
acceptance. Approval of requests should ensure a thorough
evaluation by an interdisciplinary board within a pre-defined
process. The latter must reduce bureaucracy and be time
effective whilst instigating the need for keeping the project
deliverables in line with business strategy and direction.
Furthermore, the board should ensure that change in
requirements will not lead to problematic scope creeps [42],
which would affect cost, resources, quality, as well as
increasing uncertainty and lengthening project delivery.
An inherent key success criterion in project delivery is the
ability for a project to reap the intended benefits. It frequently
transpired however that the project closure phase is usually
overlooked and the project transition - from production into
operational phase, occurs without establishing the relevant post
project support level agreements (SLAs). Apart from
monitoring and managing the system performance, security,
resource utilization, backup/restoration strategies and system
continuity, this should also entail a comprehensive end-user
training to ensure effective use of the delivered product.
Finally, acting as a post mortem exercise, project
management should enrol all stakeholders to formulate “a
lessons learned report” with the ability to identify and analyse
project execution whilst establishing a list of recommendations
to assist future projects to be undertaken by the firm.
C. User Management
The underlying foundation of any ICT project, directly
affecting the level of achieved success is dependent on the
commitment and sponsorship of project stakeholders. Effective
user management must ensure that this remains present
throughout the entire project life cycle irrespective of any
change occurring either at the executive and operational levels.
This particular source of failure is highly common within the
public sector where projects are frequently subject to
substantial alternation in scope, direction and commitment due
to political changes.
Throughout project execution the management of
stakeholder conflicts must be properly performed to ensure a
smooth delivery [12]. Understanding and managing conflicts is
usually a complex process since these arise due to various
factors such as personality issues, diverging priorities, trade-off
capacity, misunderstandings, resource commitments and
responsibilities. It was commonly noted that mismanaged
conflicts frequently lead to excessive levels of anxiety, stress
and frustration, thus stressing the importance of adopting
adequate mechanisms where issues can be escalated and
resolved accordingly with the assistance of a Project Conflicts
Resolution Board (PCRB). This concept should be further
supported with the promotion of a positive attitude with
consistent open and trustful communication throughout the
project structures.
Project Managers should also ascertain that the
maintenance and promotion of a positive change culture is
present within an ICT project as this paves the way in ensuring
project results and excellence. This highly sensitive area within
team dynamics can be assisted by providing adequate training
and knowledge to ensure that dependents are knowledgeable
about the process in which suggestions are performed and the
manner in which these are handled. Moreover, a project
manager must ensure that the appropriate user management
skills are utilized to induce such change. This also entails the
careful assessment and selection of the delivery methodology
as well as the venue and timing in which communication is
achieved. Furthermore, a successful change demands that the
affected stakeholders are consistently informed about the
manner in which they shall be affected and any uncertainties
from their end are reassured. This will be supported by an
updated ICT project plan which will include changes in budget,
timeframes and quality, if any.
An effective manner in which user management can assist
the facilitation of project execution is to ensure that resources
engaged internally or externally outsourced, are knowledgeable
in the project delivery domain. This will reduce resource
efforts in acquiring domain familiarization and knowledge.
Furthermore it will aid the project team to understand better the
project dynamics and enhance decision making with the
possibility of employing useful ideas.
User Management should also assist in providing the right
resources to identify capture and share knowledge within the
project team. The implementation of an appropriate knowledge
management strategy will not only assist in producing better
quality requirements, but facilitate communication in team
collaboration, promote innovation, and assist in producing
more accurate estimates, timeframes and the appropriate
resource allocation. Furthermore the promotion of an
intellectual collaborative strategy will assist the project team in
paving the way for smoother project execution by increasing
confidence in achieving the project objectives and
subsequently enhance the chances of ensuring overall project
success.
V. CONCLUSION
Throughout the years the ICT industry has been doomed by
an exceptionally high percentage of ICT project failures.
Unfortunately, despite the consistent rate of technological
progression, advancements in project management
frameworks, a considerable number of well researched studies
demonstrate that, ICT projects are still failing at an alarming
rate. Such situation is of extreme concern to business owners,
decision makers and project managers which are commonly
faced with cost overruns, project delays, unsatisfied clients,
unreached objectives and even abandoned projects as
consequences of such failures.
This paper presented a number of recommendations that
can assist project management in mitigating and pre-empting
such project failure. The methodology adopted derived from
the holistic research of thirteen studies authored/commissioned
by well-established entities or organisations eliciting the
various criteria leading to project failure. Such criteria were
structured under three fundamental effecting categories where
this assisted the complexity reduction related to the multitude
of intricate issues currently faced by project management when
dealing with the multi-faceted problem of ICT project success.
The paper rationally illustrates that ICT project success is
not something impossible to achieve, but can be realised if the
proper approach to preparation, planning, management and
execution is undertaken. By considering and adopting the
proposals highlighted within this study together with the
established project management methodology undertaken,
management will be assisted in allocating the adequate and
proper resources effectively to attain the required objectives.
It is finally undeniable that in a fast-paced developing
world, heavily dependent on ICT, the demand for more
complex and reliant ICT-related projects will continue to
augment in the future. It is for such a reason that ICT
excellence, effective project governance and successful project
actualisation should not just be desirable but also attainable.
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... The findings of past research (e.g., [18]) have shown that projects encounter a large number of challenges and problems during implementation, and solutions are sought to minimize the obstacles and increase project success [19]. Therefore, organizations can achieve a competitive advantage through the proper implementation of ICT projects, increasing market share, enhancing efficiency, and lowering costs [20]. To execute the strategies of organizations and produce strategic value, it is essential to have successful projects [21]. ...
... However, according to some theory-based articles (e.g., [9]), none of the main primary PDSs is considered ideal and appropriate for any project because each project is unique. Numerous reports (e.g., [1,11,20]) have identified PDS selection factors and assessed project risks. This study employed a survey method on existing sources; ICT industry experts were interviewed, and a questionnaire was used to identify the selection factors. ...
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... The situation is worsened by the unrealistic expectations of the customers (Adam and Danaparamita, 2016). The project scope must be comprehensive, concise, clear, and unambiguous, and endorsed by project sponsors; it should be communicated to all stakeholders (Fenech and Raffaele, 2013). The success or failure of a project depends on how the project scope is managed (Fashina et al., 2020). ...
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... One of the main causes why Information and Communication Technologies projects fail has its origin in stakeholder management [5]. To minimize the potential failure of this initiative, the principle of co-creation is followed, in which the interested parties are actively involved in the implementation of the project, receiving the appropriate training, and making the community members maintain the solution by themselves. ...
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... the user's availability and bandwidth are always a challenge. To mitigate such risks and challenges, and appropriate PMM is crucial(Fenech & Raffaele, 2013).200% budget overruns. ...
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