You are here

Five red flags your IT project is failing

public://pictures/John-Mello-Journalist.png
John P. Mello Jr., Freelance writer

Many organizations embarking on IT transformation bite off more than they can chew, with predictable results. A survey last year by IDG Research Services found that just about half of the polled organizations (51%) had portions of their transformation initiatives that were either stalled or abandoned entirely.

Steve Dodenhoff, president of Insight North America, the global systems integrator that commissioned the survey, said in a statement that the findings provide a clear outline of the red flags to avoid.

“The results of the IDG survey show that IT transformation is a business-wide challenge, and a majority of organizations are unsure how to map out their journey." 
Steve Dodenhoff

What are some of the traps snaring these initiatives? How do you get out of them once they're sprung? Here are five tips for preventing your IT transformation projects from jumping the rails or running out of steam.

[ Digital transformation can be a costly failure without proper controls. Find out how IT4IT value streams can help in this Webinar. ]

1. Inadequate changes in process, ops, and tech can bog down a project

You've got your digital transformation projects under way when you find that your changes in processes, operations, and technology fall short of what's needed. That's not unusual, although it isn't typically the primary cause of a transformation failure, said Peter Kraatz, Insight's portfolio director for CDCT consulting services.

However, when it is a primary hang-up, he said, it’s either because the organization tried to change too much too fast, or because it did too little or nothing at all.

"We are constantly asked how to evolve a client's ITIL processes to meet a new model's needs post-transformation," Kraatz said. "I usually tell clients to focus on a limited number of areas that are going to be front and center in your brave new world. That's almost always incident management, change management, and financial management."

"Focus on the important pillars, get them right, and revisit the rest when you have solid footing."
Peter Kraatz

Bobby Cameron, a vice president and principal analyst at Forrester Research, recalled a life and investment company he advised that wanted to combine two business units and go digital with them. It hired a chief digital officer to make it work, got the CIOs from the units to work together, and thought that was enough to get the project to work. It wasn't.

After spending a lot of money and not getting the results the company was expecting, Cameron said, it stopped thinking that that was all it took and started to do an analysis of the capability changes it had to make.

"They started to change how they designed their solutions. They changed the process for understanding what's going to work. Instead of forcing on the organization what their subject-matter experts thought was the right approach, they went out and engaged and modeled."
Bobby Cameron

[ Also see Dr. Mik Kersten: Why the fast pace of IT is outpacing project management ]

2. Legacy systems can undermine a project

Another hang-up that can sink or stall digital transformation projects is dealing with legacy systems. Those systems don't always play nice with those in the new projects, but scrapping the old systems may not be possible. For example, many banks use a core system made by Hogan that's over 40 years old.

"When banks do the financial analysis to replace it, it can cost $80 to $100 million to replace it, with no new value."
—Bobby Cameron

What banks have been successful in doing is creating an abstraction layer between the back-end legacy systems and the newer, front-end, customer-facing systems. The APIs and microservices in that layer can talk to the legacy systems. "The concept of the abstraction layer and building out a transformation plan on the basis of that is important," Cameron said.

But he said there are clear actions to take in response.

"If the legacy technology is truly sick—I can't get the data out of it and even if I did, I couldn't do analytics with it—then a legacy replacement is an absolute necessity."
—Bobby Cameron

Victor Pearson, a PMP Instructor with Cybrary, an online cybersecurity training provider, said the need to keep the legacy technology needs to be assessed to determine why it is still used and can it be replaced.

"Legacy technology can undermine IT projects in many ways—space, performance, security, to name a few."
Victor Pearson

The company should assess the long-term costs and benefits of scrapping the legacy technologies for the newer technologies, said Pierce Owen, research director for industrial solutions at ABI Research, a technology advisory company.

"If the new technologies will benefit the company in the long term, then sometimes the company has to totally scrap legacy technologies, even if it hurts in the short term."
Pierce Owen

Correcting problems with legacy systems after a project is started is almost impossible, maintained Robert Parker, a senior vice president at IDC, a market research company. When legacy technology, or technical debt, is preventing IT from having a reasonable success rate with its projects, all a CIO can do is document the problems and build a case for replacing the legacy systems.

[ Looking to bring innovation into your enterprise? Learn from others' Enterprise Service Management (ESM) implementations—and get recommendations for deployment. ]

3. Technology silos can impede project success

Often the benefits of a project become its sole focus. When that happens, a silo can develop. "They can't focus just on the benefits of the project," Parker explained. "They also have to focus on all the 'plumbing' and 'electrical' you need in order to make it fit into the rest of the portfolio."

"IT can't break those silos. It has to come from leadership."
Robert Parker

Kraatz agreed. "It’s up to leadership to break the model in order to fix it, set priorities, and build an operating model that can support the needs of the business effectively."

Some organizations have created "Tiger Teams" to break up siloed operations, but Kraatz noted that that solution is a temporary one at best. "Tiger Teams tend to make the silo problem worse over time because they create another silo—The Fixers," he explained.

"It’s a nice ego boost to be in that group at first, but once it goes on too long, it looks to the team like the problem-solving capacity of leadership is limited to throwing bodies at the problem."
—Peter Kraatz

4. Change fatigue can sap momentum behind transformation

When a transformation effort loses momentum, change fatigue can set in and have a dire impact on digital change. Apathy, lack of engagement, failure to meet critical path deadlines, and a lag in delivery are all signs of change fatigue starting to afflict a project.

Mark Simoncelli, global vice president for growth implementation solutions for Frost & Sullivan, a global research and consulting organization, said any transformation is tough because you're going to get resistance.

"You're going to get resistance from people as you try to change behaviors, but you've got to get them through the change adoption curve as quickly as possible—get them through denial, resistance, and out of the valley of despair and get them engaging with the solutions."
Mark Simoncelli

When signs of change fatigue appear, a change in approach may be in order. "Maybe you need to break things up into bite-sized chunks," Simoncelli suggested. "Create smaller cross-functional teams, get results, and build on successes."

"You've got to change it up. If your transformation is tanking and you don't, you're just going to plow more money into more frustration, and ultimately you're going to fail."
—Mark Simoncelli

[ Also see: Focus your IT Ops projects: How to become an 'outcome service provider' ]

5. Budget issues can threaten completion of the project

Addressing budget issues on a project in progress can be very challenging. "It's better to do smaller projects with smaller budgets than to get into the middle of a large project and run out of money," Parker said.

If the cause of budget problems is structural to the business, then there's not much that can be done by the project manager, added Kraatz. "If the budget is being overrun by unanticipated costs, or costs that were easily anticipated but not foreshadowed in planning, some hard decisions need to be made," he said.

"Ultimately, it comes down to controlling those overruns and retrenching your financial analysis so you know what's coming and can either de-scope some elements or reset stakeholder expectations. Where we've seen this happen, the budgetary shortfall almost always comes from overly optimistic projections provided by vested interests."
—Peter Kraatz

There are a number of tasks native to a project portfolio. An analysis of those tasks can reveal which tasks are being consistently underestimated. However, Parker said, From inside an individual project, it's very hard to resolve that. "What you often see people resort to is to reset the scope of the project," he said, "but that's just a stupid project manager trick to come in on budget."

"You don't have a lot of good options as a project manager except to skimp on things, and then you're probably going to have an unsuccessful project because it doesn't meet the requirements."
—Robert Parker

Insight Senior Vice President and General Manager Shawn O’Grady noted that his company knows from firsthand experience with clients that IT transformation is challenging, "from the difficulty of deciding where to begin to the gap between strategy and execution."

"Transformation requires a multi-step road map, deep culture change, and continual evaluation and adjustments spanning technology, processes, and people."
Shawn O'Grady

[ Get Report: The Top 20 Continuous Application Performance Management Companies ]