Spending on information technology is a significant aspect of corporate investments. Advanced and appropriate systems give firms a competitive edge in the dynamic business environment. They also promote value creation. However, the rate of project failures is a worrying trend. Firms are now determined to explore the factors that lead to project failure or success. Research shows that the larger the IT project, the higher the risk involved. It is important to note that there is no universal definition of project failure or success. The paper will describe project failure, how the risk can be reduced, the cost of protecting against project failure and factors that contribute to project success.
Project Failure
Projects of information systems have a high rate of failure. The rate is mainly attributed to the lack of proper planning. Project failure can be termed as the inability of a project to deliver its expectations. Some of the causes of project failure are as follows. The first factor that leads to project failure is the lack of a structured development methodology. Organizations usually ignore methodology and focus on the coding process. Secondly, working backward from the project deadline is another way to contribute to project failure. Realistic deadlines should be set while considering the challenges involved. Lack of a data model is the third factor of the failure of a project. A data model is an essential part of a system. Notably, the models should be designed by a technical expert and thoroughly audited (Dorsey, 2015). Many organizations skip the testing phase to meet the set deadlines. This can adversely affect the system. The main aspects used to measure project failure or success includes cost, time, and quality. A project that has overspent time and money can be considered a failure in terms of its process. Secondly, a project is a failure if it does not meet its objectives or stakeholder expectations. A project can also fail in terms of interaction if it does not meet user satisfaction.
How the risk of project failure can be reduced
A risk can be defined as something that may happen and can have a profound impact on the project. The level of risk is mitigated by developing a risk management plan. The process of reducing risk entails identifying risk, quantifying it, response, and the final step is monitoring and control. Risk identification can be done in workshops with IT and business people. Mitigating risk requires organizations to understand the type of risk involved. Risk quantification involves assessing the impact of the risk. A risk can have a high or low probability with a low or high impact. The response to identified risk can be in various forms. Some project teams may choose to avoid the risk by finding an alternative. The second response is transferring the risk to another party, for instance, by outsourcing certain operations. Thirdly, strategies can be formulated to overcome the risk. Finally, a team can accept the risk if it is insignificant. Risk control is achieved by continuously monitoring a project (Turbit, 2009). Several risks are associated with project failure. They include a lack of stakeholder involvement, low team commitment, inadequate user involvement, and ineffective communication among others. Although risk management can mitigate process-related risks, it is imperative to consider the outlined risks. Increasing user and stakeholder involvement is crucial in reducing the risk of project failure. This is because the project will likely meet their expectations. Low team commitment can lead to project failure, as quality will be ignored. Poor commitment results if the management prioritizes its practices rather than people. Failure to consider the psychological aspects of their employees increases the risk of project failure. Team commitment can be enhanced by setting clear goals and providing motivation. Effective communication among stakeholders can also reduce the risk of project failure.
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The costs of protecting against project failure
The warning signs of project failure comprise confused stakeholders, missing the set milestones, and negative metrics as well. Most of the organizations strive to ignore such signs to meet project deadlines with the set budget. This can lead to adverse outcomes after project completion. One of the main costs of protecting against project failure is a lack of user satisfaction. Users can reject a project if they consider it unfriendly or unable to meet their expectations. Alderton (2019) highlighted some of the canceled projects. An airport project worth $13 billion was canceled in Mexico City at 37% completion. Another project failure was California’s high-speed rail. Its cancellation was attributed to doubling of costs for over ten years. The author noted that at least 15% of projects were considered failures in 2018 while 37% fail to meet their objectives according to PMI. Protecting against project failure can attract frequent meetings by the project team. The hidden costs of such meetings should be considered; for example, the team might be meeting more often than they are working. Project teams may also choose not to inform the management in case the budget exceeds. This can have adverse effects, for example, cancellation of the project or rejection by key stakeholders. The cost of protecting project failure is not always financial (Aranyossy et al., 2017). Some projects such as faulty airplanes can lead to massive casualties. Some organizations also experience data breaches. This is often caused by the lack of project teams to pay attention to the details. Litigation issues are also a cost; for example, users may sue a firm if personal data is breached. Protecting against project failures also has opportunity costs. This means that the resources employed to facilitate the success of the project can hinder the development of a more promising project.
Factors that lead to project success
The main factors that contribute to the success of a project include technical leadership by someone who has conducted a similar project, a sound methodology, and the support of top management. A successful project requires the acknowledgment of a technical leader to be in control of the architecture. A sound methodology is essential as it involves paying attention to the whole process. Little information can lead to project failure.
An example is the ignorance of user requirements. The success of a project dramatically relies on the methodology used. The top management of an organization should be prepared to face challenges in any project. Objective auditors can be engaged to assure the managers of a project’s progress. Project managers are the main determinants of a project’s success. Adequate training of project managers can improve the chances of project success. The project manager should have competencies such as flexibility, conceptual thinking, information-seeking, initiative, and should focus on the needs of clients. Other factors that determine the success of a project are data migration and implementation (Dorsey, 2015). Data migration should be planned for early in the project and should be treated as independent. The cost of data migration should be considered, as it is often ignored. A skilled individual should be assigned to the task. This is because investing in limited resources can lead to project failure. A good project design does not guarantee the success of a project. Its implementation determines the success of such a project. This can be achieved by adequate training of the users, appropriate transitioning of the system, and better support of the users for the new system. Project managers should understand that more team members do not always produce quality projects. Few developers with the necessary skills and adequate supervision can lead to project success.
Conclusion
Project failures in information technology should be addressed to prevent the costs associated with them. The risks involved in developing projects can be mitigated through risk management plans. Project teams should ensure users and other stakeholder’s involvement in the project. This can reduce the risk of rejection and cancellation. Improving the commitment of teams is also important for quality assurance. Successful projects usually have sound methodologies and data models. The technical leadership of the project is critical to increasing the probability of success. The support of top management is also a key element in the success of a project. Other factors that lead to project success are the training of project managers and thorough auditing. Appropriate data migration is also important in achieving project success. Individual attributes mainly cause the failure of projects. Understanding these factors can help develop more successful projects.
References
Alderton, M. (2019). Silver Linings: Capturing Lessons Learned Can Help Teams Turn Project Failure into Long-Term Project Success. PM Network, 33(6), 56–63.
Aranyossy, M., Blaskovics, B., & Horváth, Á. A. (2017). How universal are IT project success and failure factors? Evidence from Hungary. Information Systems Management, 35(1), 15–28. https://doi.org/10.1080/10580530.2017.1416943
Dorsey, P. (2015). Top 10 Reasons Why Systems Projects Fail. Harvard Business School, 1–9. Retrieved from https://pdfs.semanticscholar.org/81a1/73d4b860b08e87cf4acd9db4f17df4cecf86.pdf?_ga=2.41037922.1115128929.1572063398-1202479876.1572063398
Turbit, N. (2009). Risk Management Basics in the Project Perfect. White Paper Project, 1–3. Retrieved from http://www.projectperfect.com.au/downloads/Info/info_risk_mgmt.pdf
