Myth #1: Digital Transformation Projects Are Hard To Get Right – Part #1 (Lesson 1)
Since the dawn of civilisation, humankind has undertaken the challenges, reaped the rewards, and faced the failures of countless projects.
Endeavours have included those born out of the necessity to survive – for example, building shelter or constructing defensive works. And they have ranged from there to amazing feats of engineering, such as the Colosseum, the Great Wall of China, the Channel Tunnel, or Australia’s own immensely successful Snowy Mountains Hydro-Electric Scheme.
Some projects have ‘Big, Hairy, Audacious Goals’ that are started just ‘because they are there.’ (To paraphrase Hillary’s famous retort when he was asked why he wanted to climb Everest.)
Every day, in thousands of businesses around the globe, projects of all shapes and sizes are started, completed, or even cancelled, by countless executives like you.
According to Gartner, Inc., global IT spending will reach AU$4.62 trillion in 2017[1].
[1]Gartner, Press Release, January 12, 2017, “Gartner Says Worldwide IT Spending Forecast to Grow 2.7 Percent in 2017” (http://www.gartner.com/newsroom/id/3568917)
But many projects will inevitably end in failure
Of those projects that are actually completed, a disturbing majority of them are deemed to have failed to some degree. And a startling number of those are considered a total failure due to cancellation.
Projects, large and small, fail whether they are managed by internal or external teams – or a combination of both. The most spectacular failures seem to arise when behemoth global consulting organisations take on multibillion-dollar public sector projects. This is a heady mix that seems far too often to end in delay, debacle, and despair, costing the poor taxpayer billions of dollars each year.
The most infamous example in recent Australian history is probably the doomed AU$6.2 million payroll project undertaken by the Queensland government. This ended up costing AU$25.7 million, and the overall project cost ballooned into an AU$1.2 billion nightmare where 80,000 doctors, nurses, and health professionals were overpaid, underpaid, or not paid at all.
Following the Queensland Health Payroll Commission of Inquiry, the project earned the dubious reputation of being ‘the worst failure in the history of public administration in Australia’.
The statistics indicate that there are many more project failures we never hear about. These range from large project failures in private companies to the potentially devastating failures experienced by some of the two million SMEs (Small to Medium Enterprises) that comprise more than 95% of all businesses in Australia.
I have personally been brought in to rescue more than a dozen failing projects, several of which were multimillion-dollar blowouts.
At the other end of the scale, I have also seen the fallout from failed $10,000 projects that were inappropriately sold to small businesses who were promised the world. Instead, they were sold a dud.
The impact on these SMEs can be substantial, influencing both the company’s ability and appetite to invest further in technology for growth.
Why do such a terrifyingly high percentage of these projects fail?
The accepted wisdom is that technology projects are complex, wild, and scary beasts. They are difficult to control and impossible to guarantee successful outcomes for.
Further: that there is no end in sight to this madness, and nothing we can do about it.
It does not seem to matter how often, or how hard, organisations fail. The lessons learned from earlier mistakes soon seem to fall by the wayside, only to rear their ugly heads again on other projects.
History seemingly repeats itself, ‘the first time as tragedy, the second time as farce,’ as Karl Marx famously quipped.
The research statistics paint a grim picture too. Just type ‘project failure’ into your favourite search engine, and you will get more than 8,000,000 results.
If you then examine some of the results a little closer, you will find titles like ‘101 common causes of project failure’ here, ‘15 reasons why projects fail’ there, and another ‘7 sources of project failure’ or similar somewhere else.
The lists of statistics, root causes, ‘how to avoid…’ articles, etc. go on and on (and on… and on).
Advice for how to avoid failure is provided by big consultancies, ‘independent’ researchers, and the industry best practice and training organisations. Everyone is an armchair pundit in the post-mortem world of project failures.
Yet, these same organisations are responsible for the continued failure of so many projects!
The reasons behind the statistics are seemingly writ large. Technology transformation is extremely difficult, projects run a high risk of not achieving what they set out to do, and there is nothing we can do about it.
It is all just the luck of the draw. Digital transformation projects are so hard to get right, right?