Large-Scale IT Projects: Beating the Odds

Transformation

By

August 8, 2019

Why are large-scale IT projects so prone to challenges? What makes public sector IT transformations particularly vulnerable to project failure? And, most importantly, what steps can your organization take to make your next major IT initiative successful?

To unpack these questions, we looked at a few real-world examples of well-documented public sector IT project failures. By extracting critical lessons learned, North Highland has identified specific tactics that your organization can apply to overcome common obstacles to IT project success.

The initial roll out of HealthCare.gov faced significant capacity issues and incomplete functionality, causing the site to crash within hours of launch. The project required substantial rework and exceeded its $93.7 million budget by roughly 1700 percent to reach an ultimate cost of $1.7 billion. Factors that hindered project success include:

  • Absence of clear, formally recognized project leaders
  • Physical separation of core project teams and the resulting sense of disunity

Lessons learned from HealthCare.gov point to the importance of strong, visible leaders who firmly communicate direction-setting decisions, a collaborative environment, and a one team mentality. To avoid similar pitfalls:

  • Designate accountable Program and Project Sponsors. Provide role descriptions that clearly outline the expectations for the positions, including meetings they are expected to attend and decisions for which they are responsible. Stand-up a governance framework to aid the sponsors in identifying and preparing for crucial decision-points.
  • Collocate teams or establish a central command center-style office space to act as a hub for separated project teams. Facilitate continuous communication and knowledge sharing.
  • Limit the use of artificial distinctions based on vendor associations or team assignments that disaggregate the project team. Promote a collaborative culture where individuals working on the project operate as a single team, regardless of employer, task, or title.

One state’s massive datacenter consolidation effort began in 2006 with a goal of reducing the number of servers across the state by moving IT operations for 27 state agencies to two new datacenters. After multiple delays in delivery, failures to meet contract obligations, and disputes over project scope, the project was terminated in 2010. At the time, the project had spent 88 percent of the original budget and was only 12 percent complete. So, why did the project fail?

  • Uncertainty around escalation and decision-making procedures
  • Inconsistent and misleading status reporting

The halting effects of these obstacles underscore the importance of well-defined procedures, accurate project reports, and overall project visibility. How can organizations overcome these challenges?

  • Create a graphic that represents the project’s decision-making and organizational structures and highlight channels for escalation. Include this information in project onboarding and regularly reference the graphic during all team meetings to reinforce retention.
  • Seek input from project leaders and stakeholders to design a status report that tracks project performance measures that are most meaningful to project decision-makers. Distribute status reports on an ongoing basis to convey the overall health of the project.

Another state’s initiative to upgrade its operational software was comprised of three separate projects totaling approximately $444.6 million. The projects aimed to transform the IT infrastructure used to support the state’s accounting, procurement, and HR activities. Each project had execution problems that resulted in schedule slippage, unanticipated rework costs that exceeded $5 million, and the roll out of systems with limited functionality and performance issues. The projects’ success was undermined by:

  • Poorly engaged Executive Sponsors
  • Inadequate requirements gathering and subsequent scope creep

To address and mitigate the impact of similar challenges:

  • Assign Executive Sponsors who are committed to project goals and have the influence and authority to increase buy-in and enforce compliance with project plans.
  • Design and implement a process to rank project requirements by importance and urgency, in turn, increasing the likelihood that the most critical requirements are met in case of project cost or schedule overruns.

At the highest level, lessons learned from these project failures highlight the importance of four areas:

  • Project Leadership – Effective sponsors actively communicate project value to stakeholders, facilitate deliberate decision-making, and act decisively to manage project scope.
  • Collaborative Culture – This helps to reduce competition and antagonism between vendor(s) and clients, while pushing teams to work together to advance project goals.
  • Status Reporting – Regular and transparent reporting increases visibility into the project, enables informed decision-making, and allows leaders to take proactive steps to mitigate the risk of project failure.
  • Scope Management – Thorough requirements-gathering and the prioritization of project scope reduce the likelihood of drawn out scope-related disputes.

Learn from these high-profile project failures and arm your organization with these takeaways to put your next IT project in a position to beat the odds.


This blog was co-authored by:

Austin Williams 

Austin Williams is a management consultant at North Highland. He has seven years of experience working with diverse public and private sector organizations on problems ranging from employee training effectiveness and engagement, to public sector IT system procurement strategy.

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