Project failure is the bane of every IT manager — cost overruns, poor ROI, staff time wasted. Here are some guidelines to consider as you embark on your next project.
By Rob Prinzo of The Prinzo Group
It is time to face reality. The spending cuts caused by the recession have lead to gaps between your enterprise software applications and the most current releases. The longer you wait to upgrade, the larger the gap, the larger the gap, the bigger the project. Although most organizations have accepted and plan for application upgrades, over 60% of technology projects result in missed implementation dates, cost over-runs or fewer features and functions than originally planned.
With such high failure rates, even the thought of a large scale enterprise application upgrade is enough to give any executive heartburn.
To prevent against project failure, it is important to understand that project failure can happen early in the project lifecycle, causing a ripple effect on your project. Consider these key findings from the report, The Impact of Business Requirements on the Success of Technology Projects from IAG Consulting, a professional services firm focusing on requirements definition and management:
- Companies with poor business analysis capability will have three times as many project failures as successes.
- 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis.
- Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects; and
- Over 41% of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.
When planning your project, you have calculated your project budget, resource and staffing needs, and your projected ROI. However, if there is a gap in your requirements that causes delay during the acquisition phase of your project (or worse yet, you leave out key requirements from the strategy phase because of a rushed assessment) the resulting impact will be seen downstream causing the extension of subsequent project phases.
The ripple effect of missing project gaps early in the project will not only create vulnerability and weakness in the project plan integrity, it affects the timeline, the overall project cost, realized benefits, ROI calculations and the project team’s credibility.
For example, project delays can be measured as follows:
Internal and external resources cost – A three month project delay resulting in the extension of two internal resources at $120,000 a year, plus the extension of three consultants at $175 per hour, results in over $300,000 in extra project costs.
Read the rest about improving project management at CIO Update.