Why IT fails

If success is meeting or exceeding business and customer expectations, then the probability of failure of business IT investments is staggeringly high.

In fact, if the outcome of a trip by air was comparable to the business outcome of many IT projects, no one would even think of using aircraft routinely.

In my book "The Critical Factors for Information Technology Investment Success", I identify the seven factors causing failure.

These factors are a synthesis of my observations and experience of IT success and failure over a career of two-and-a-half decades in the application of IT in business.

During this time I have been involved in projects that have succeeded dramatically and also in projects that have failed. I have also observed some dramatic failures that have come close to putting the host business out of business.

The most significant factor causing failure is what I term "IT mythology": the tendency to ascribe mystical or human attributes to computer systems. IT advertising, IT specifications and IT "speak" frequently speak about computer software and systems as though they have superhuman characteristics and have the ability to perform intellectual and creative functions that exceed the ability of human beings. There is a broad-based tendency to speak about major integrated systems as though they will compensate for diverse human inadequacies.

Yet, in reality, computers are high-speed adding machines that do little more than add 0s and 1s and switch processing in accordance with binary switches. They do this at phenomenal speed but, in core terms, this is all they do. In my experience, IT mythology accounts for about 30% of IT failures.

The second factor causing failure is a lack of executive custody and inappropriate policies. By executive custody I mean a proprietary sense of ownership by the chief executive and other executives and managers.

This is coupled with insufficient knowledge of the capability and limitations of the system to ensure a realistic approach to its application, including ensuring that policies are appropriate for the technology being applied in the business. This factor accounts for a further 20% of IT failure.

The most significant factor causing failure is what I term "IT mythology": the tendency to ascribe mystical or human attributes to computer systems.

Dr James Robertson, independent management consultant

The third factor causing failure is a lack of strategic alignment. This accounts for another 15% of failures. By strategic alignment I mean a clear, robust definition of what differentiates the organisation in its core markets and how it goes about achieving growth and profit. This is NOT an airy-fairy wish list document but a concise and robust definition of how the organisation differentiates itself and what its fundamental drivers are.

This includes clear definition of economic, human resource, service and other drivers with simple definitions such as "we serve manufacturers who operate on a `just in time` manufacturing model by supplying a comprehensive range of superior quality chemicals at the best possible price, delivered with the minimum possible lag between order placement and delivery". From such a concise strategic definition a succinct, clear definition of every aspect of business operation can be determined. Once this is in place, the proposed improvements that a new IT investment will bring about can be mapped out in the context of every core operational area of the business together with a description of the journey to required business improvement.

The fourth factor causing failure, amounting to 12% of the total, is the lack of what I term "an engineering approach". By this I mean a robust, systematic, highly detailed analysis and design approach which seeks to "design for success by engineering against failure" and which recognises that "engineers do NOT design bridges to stand up, they design bridges NOT to fall down".

This engineering approach includes meticulous attention to detail, rigorous specifications, checking and double-checking of specifications, use of multi-disciplinary professional teams, and acceptance of liability and accountability for failure.

The fifth factor responsible for failure, amounting to 10%, is what I term poor data engineering where I define "data engineering" as the classification and taxonomy of the data in such a way that the codes used for validation data, master data and such like are highly structured and accurately reflect expert human understanding.

This data classification starts with a strategic, highly structured design of the chart of accounts and extends to every code in the system. In practice, the design of the chart of accounts is frequently a major source of operational software problems.

People and "soft" issues of psychology, the management of change, training, motivation, leadership and other human characteristics are the sixth factor contributing to failure, rated at 8%. The percentage here is low because, in my experience, the first five factors contribute more to failure.

In reality, this factor is substantial. Human beings do not respond well to change, particularly when they have been hired to maintain standards and rigour in existing systems.

The final factor, technology issues, amounts to only 5% of what causes failure. Today the core technology is far more advanced than the average organisation or human being knows how to effectively utilise.

In fact, the computer industry is about where the aircraft industry was about 30 years ago. The Concorde was technologically the most advanced passenger aircraft around, but the industry could not apply it viably commercially and, in a commercial sense, the Concord never "flew". The Boeing 747 was a much less sophisticated aircraft than the Concorde and only came into service about four years after the Concorde. Yet it has shaped and dominated the transcontinental airline industry for the best part of 30 years.

The question today regarding technology is "what technology is REALLY appropriate to your business requirement and what do you need to do to fit it effectively to your business".

In my next Industry Insight I will discuss the seven critical factors for a successful IT investment. In the interim, write to me care of ITWeb and tell me of your experiences of IT investment failure.