Since the appearance of the modern computer, managers, politicians, and the public have become accustomed to believing that investment in information technology is the automatic path to success and progress. It is now a fundamental notion in management literature that nations and organizations that know how to take advantage of IT will gain a competitive edge over others. Yet success is neither automatic nor guaranteed. This chapter explores the many challenges that are typically encountered and offers advice on how to overcome the obstacles that threaten IT success.
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Information technology has great public relations. The public and even elected officials believe that technology is the engine of administrative efficiency and progress. IT’s dirty secret, however, is that information technology projects very often are either late, over budget, do not achieve original functional objectives, or are simply canceled. While this is not unique to the public sector, the public sector’s greater emphasis on accountability and lower acceptance of risk-taking makes failure particularly a concern for public managers. Moreover, since in recent years governments have given priority to larger and larger projects of a more comprehensive nature, the costs of failure have risen correspondingly. As Nelson (2005, p. 93), writing about the increasing number and size of governmental IT projects, has noted, “these large-scale IT projects are particularly prone to failure...increasing commitment to success yields subsequent project iterations that are both increasingly costly and increasingly less likely to succeed.” Ironically, according to Nelson, failure in large-scale projects often actually leads not to project cancellation but rather to greater commitment.
IT organizations such as the Gartner Group, Meta Group, and the Standish Group have long reported astonishing rates of IT failure in both public and private sectors. A study of Fortune 500 firms found over half of their users either underused or had entirely abandoned the software that was supposed to increase their productivity on the job (Watt, 1989). Similarly, back in 1990 the Gartner Group’s study of Fortune 500 companies found that 40% had experienced “runaway” or near-runaway IT projects (Mehler, 1991). In 1994, the Standish Group (1994). consulting firm found that more than 80% of IT projects were late, over budget, lacking in functionality or never delivered; three of four projects were late, with schedule overruns averaging above 200%; two of three projects ended without implementing originally scheduled features/functions; three in ten projects were cancelled; and cost overruns averaged nearly 200%. The Standish Group study estimated that some $75 billion was wasted through IT project failure in a recent year. A 1999 study of Enterprise Resource Planning (ERP) software projects found that fully 90% wound up late or over budget (Fryer, 1999).
In the Standish Group has been collecting collects statistics on IT project success rates since the early 1990’s. They isolate projects based on the three gold standards of project managers—on time, on schedule, and with desired features. In 2000, some 23% of IT projects were canceled outright. Interestingly enough, the study was repeated in 2009 and found that “only 32 percent of all projects succeeding which are delivered on time, on budget, with required features and functions” (http://www1.standishgroup.com/newsroom/chaos_2009.php). Figure 1 provides an overview of the percent of successful, challenged, and failed projects over time.