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Despite their strategic importance to organizations, a large percentage of information systems (IS) implementations still fail to deliver benefits or solve the problems for which they are intended. The latest Chaos Report from the Standish Group (2009) indicated that only 32% of software development projects were delivered on time, within budget, and with the required features and functions. Forty-four percent of projects were late, over budget, and/or delivered with less than the required features and functions. Twenty-four percent were outright failures. Projects plagued with budget and schedule overruns have cost billions of dollars to corporations and governments (Gorla & Lam, 2004).
The abandonment of IS projects has been costly. Oz and Sosik (2000) reported that the resulting financial damage in the United States alone was about $100 billion annually. The authors found three major factors affecting IS project failures: (a) the lack of corporate leadership, (b) inadequate skills and means, and (c) poor project management. Shore (2005) argued
While leadership may be singled out as an individual contributor to failure, it transcends all organizational factors. Leadership affects corporate culture, IS culture, IS strategy, and IS staff commitment. It affects business process reengineering, systems design and development, software selection, implementation, and maintenance. Without appropriate leadership, the risk of project failure increases (p. 1).
Failed IS projects often are the result of management and organizational issues (Liebowitz, 1999). Scholars have suggested that the human side of software development is more critical for successful project outcomes than the technology (André-Ampuero et al., 2010; Colomo-Palacios et al., 2010; Trigo et al., 2010). Gorla and Lam (2004) identified several team-related factors that affect software development project performance. The factors include the personality composition of members, team leadership, and intra-team communication and coordination. Sumner, Bock, and Giamartino (2006) suggested that the psychological orientation of IT professionals tends to influence their project leadership effectiveness. Why? According to the authors, a considerable amount of research indicates that IT professionals have traditionally lacked soft skills, such as the ability to manage people and communicate effectively.