Project Health Checks – Prevent IT Project Failures

Don’t wait for a heart attack! The risk factors are well known and the precautions are safe and inexpensive. Proper prevention involves both a change of habits – and regular checkups. We know what to do but we still don’t do it.

IT projects are well-known for having failure rates of more than 50%…
80% of projects are late, over budget, lacking in functionality or never delivered
– Gartner Group, May 2000
Few organizations have achieved the value they expected from their ERP investments
– Accenture, February 2003
Big four consulting firm sues big four bank for $38 million. Bank considers counter-suit.
– Financial Review 24 May 2002

IT project fatalities are equally preventable, yet we continue to ignore the root causes, and fail to undertake regular health checks.

Hardly a week goes by without some major systems project failure hitting the headlines of the daily press. Auditor Generals’ reports describe horrendous waste of public funds by projects gone amuck. Industry research demonstrates appalling statistics for customer satisfaction of major systems implementations, such as ERP or CRM solutions. Specialty solutions have an even worse track record.

Today’s integrated IT projects are increasingly complex, involving numerous technologies, diverse stakeholders and a broad range of security and confidentiality issues. Rapidly evolving technologies, often rushed to the market before they are mature, are part of the problem, but are rarely the major underlying cause of failure. Governance of the project is inevitably the primary culprit.

The disciplines of project governance have been well defined for many years. Every major vendor and consulting organization has their own project methodology. Qualified and accredited project managers abound, yet the problems continue unabated.
Increasingly, boards of directors are involved in the oversight of major technology system implementation. More is being spent on governance, but without noticeable improvement in outcomes being realized.

Is there a better way of providing business and public sector executives with sound, objective progress reports? Several consultancies believe that there is. The Auditor General of NSW concurs. “At least one ‘Health Check’ should be performed during major high risk projects”

So what is a project health check, and why aren’t more of them being undertaken?

Whilst methodologies and approaches to health checks may differ, several common themes emerge:
• An objective third party conducts the assessment
• The report goes to the top of the organization, not to the head of IT
• The assessment looks forward as well as backwards, raising issues which may not have hit the project status report yet
• A health check aims to make the project a success, not cast blame
• Costs are only a fraction of (original) project budgets, and significantly less than typical blow-out or abandonment costs

The objective of a health check is to identify issues early, before attitudes are entrenched, egos are committed and huge investments are wasted. They are not about second-guessing previous decisions, but neither are they above asking naïve questions – why is the emperor wearing no clothes? Sometimes they pose these questions on their own behalf – equally frequently they ask them for stakeholders too embarrassed to ask them themselves. And the questions are not just asked of the technicians, but of the business owners and users, the internal project management team and that of the vendor..

Posed in spirit of project enhancement, and with high level endorsement of an open and non-judgmental process, the questions asked should not threaten anyone. On the contrary, they often provide an opportunity to gain broader understanding by, and commitment from, senior management and other critical but more removed stakeholders. A fuller understanding of expectations, of all the parties, is generally apparent. Unreasonable or unfulfillable expectations can be addressed early – allowing the project to focus on the achievable. The process of open stakeholder engagement itself provides for a healthier project, regardless of the eventual diagnosis and recommendations.

Why do projects fail?
Some reasons for project failure
• Planning
• Governance
• Technologies
• Communication
• Change management
• Business case
• Benefits
• Unrealistic expectations
• Vendor / contract management
• Sponsorship
• Ownership
Projects fail for many reasons simultaneously. A project health check attempts to identify threats across the spectrum of technology, process, people and business drivers. A health check provides a 360 degree perspective on the objectives and expected outcomes, and the potential for delivery of them, across the stakeholder spectrum. It delves into the core issues – and demands answers to the nagging concerns and justification for the glib answers. Most critically, it recognizes that even small issues, if left unaddressed, can lead to major problems down the track.
For project team members, health checks provide another opportunity to re-think and discuss the rationale for their decisions – with the benefit of hindsight and with an early opportunity to advocate a change of approach.

Few processes provide so much opportunity for win / win solutions

For those charged with managing the contract, where outside parties are involved, health checks provides an opportunity to revisit contingencies while all parties still have an opportunity to meet their individual criteria for success. Few processes provide so much opportunity for win / win solutions.

Health checks are valuable at every stage of a project – from initiation through to sign-off and post implementation reviews. At initiation a health check can provide objective assurance that the business context and the contractual undertakings are based on a common understanding. It can ensure that the full complement of stakeholders has been identified and their needs considered. Once the project is underway, a health check can assess the governance structure against best practice. On-going health checks throughout the project can monitor the underlying mood of the project, reading between the lines of the project status report and escalating issues which may be simmering but not yet on the executive radar.

Health checks shouldn’t end with the completion of the project, however. Projects are not ends in themselves, but a means to business outcomes. A health check can ensure that the business owners actually achieve the benefits the project business case was based upon, or, as in every phase, suggest constructive actions for remediation.
Finally, a review of all the project health check reports can help both the provider and the client to improve every aspect of project governance of subsequent projects.

So why are Health-Checks not as common as project failures – or more common?

As with our personal health the attitude that ‘it won’t happen to me’ is rife within the IT community. Optimism is a virtue – but in IT domains it is a sin of excess. Without exception we all know we can do incredible things, if only we are allowed to. Don’t we all have the same goals and objectives? When these conditions turn out not to be true we expect, or hope, that things will change before it’s too late and/or we’ll personally work harder to make up for the deficiencies.

It’s this optimism, rather than more sinister motives which sinks many projects. This optimism is also, perhaps, the principle reason why health checks are seen as unnecessary by IT management and by vendors. The ‘she’ll be right’ attitude, however, seriously undervalues the benefit of an objective assessment and unbiased advice. And it can be fatal! – To projects, to careers and to the whole enterprise.

So why is senior business management so reluctant to buy in to the concept? Perhaps many are still reluctant to admit their own lack of understanding of the issues, the complexity and the technology. Or are they unwilling to be challenged to accept responsibility for the business’ role in ensuring the success of ambitious IT projects?
Perhaps the issue of IT governance has not attracted enough profile, amongst all the boardroom issues  business has faced in the last few years.

How many more high-profile failures will it take before simple prevention becomes a way of LIFE?

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