IT business alignment — Page 2 — John Levy Consulting

IT projects often don’t get done. Not just done late, but not done at all. Industry statistics show that over 50% of major IT projects are not regarded as successful. They get abandoned because they’re too late or because they’re so far over budget that the sponsors give up. Many more deliver something, but not what the sponsors really want, and not on time within budget.

Why do these projects fail to complete? Here are three major causes of IT project failure.

1. They’re not defined well

If the sponsors don’t define the project well, the people implementing it will apply their own ideas to define the outcomes. This usually leads the project astray, because no matter how technically competent the implementers are, they are not mind-readers and they rarely have a clear idea of the business purpose of the project.

The best way to define an IT project is to start with the end – defining the measurable impact on business parameters that the project is intended to have. From these, derive criteria for completion including demonstrations of the key capabilities and measurable test results. If this seems hard to do, then you need to review why the project is being done.

2. The people doing the work are not a team

People implementing the project need to behave as a team. If they don’t, the project is likely to fail.

You need good teamwork to get a project done. What’s good teamwork? It’s good communication with blaming; it’s clear acceptance of accountability for doing what each member said he or she would do; it’s working cooperatively to solve the inevitable problems that come up.

If your implementation team is split across town or across continents, there needs to be active management of the communications so that the teamwork criteria are met. Agile development, which relies a lot on self-directed teams, requires outstanding teamwork before any benefit from the Agile principles will pay off.

For example, a client company I worked with had parts of its web implementation team split between two facilities 750 miles apart. When not enough results were coming through, the manager decided that Agile methods would solve the problem. But the two parts of the “team” did not trust each other and each blamed the other part for the lack of results. Only after bringing the top dozen people together in one room for two days per month did they begin to work out their common goals and start to solve the problems.

Leadership is also required in a self-directed team. Leadership in this context means actively managing the team process and the management.

3. They don’t have enough resources or the right resources

The effort needed to complete an IT project is often underestimated. A combination of implementer optimism and wishful thinking on the part of the sponsor conspires to make the budget for many projects inadequate. This causes an unpleasant surprise when the project is nowhere near complete when the budget is spent.

You also need the right resources. People who have the skill and competence to plan, design, code, test and deploy the program are necessary. If any part of this sequence is weak, then a lot of time and effort can be lost during the project.

The implementers need the right tools, including software tools and a work environment in which they can use them properly.

Under-estimation of the scope of a project may lead it to grow too big for a single team to accomplish within the time required. That can lead to further complications, because multiple-team projects require segmentation of the effort into coherent modules, and then the integration of the whole project has to be done by an integration team. So when you discover the realistic effort needed to accomplish the project, you may also have to rework the whole management structures used to implement it.

If you want to insulate your company from IT project failures, you need to pay attention to project definition, team formation and adequate resources. Then you have a chance to beat the odds and reap a successful conclusion to your IT project.

“Now more than ever, IT must invest the time to understand specific business goals and translate IT metrics to reflect an impact against these business goals. Often there is a gap between what IT reports and what is of interest to the business.” — An Introductory Overview of ITIL V3, itSMF, 2007, p. 38

There’s been a lot written about how IT and business are misaligned. See for example, Susan Cramm’s excellent book.[1] But how do they get that way? One cause is that many IT people don’t understand business. Another is financial invisibility of IT due to budgeting processes. But these are not the big killer causes.

I believe there are three major causes: physical distance, psychological distance, and IT overload.

Physical distance of IT from the business leads to isolation in many ways. One of my client companies had their IT people in a city 750 miles away from the home office. Not only did this impose communication barriers, it meant that the IT people were living in a different culture from the home office people – even though both locations are in the United States. Of course, when you add in the distance to some of the offshore contractors who are handling some IT services, physical distance means even more cultural distance.

Psychological distance can be caused by having objectives that don’t relate to business goals and by being managed in a “silo.” For example, IT may report in to the CFO, and management metrics may relate only to financial performance. As long as IT is budgeted as an operational expense, then no amount of encouragement will get IT managers to view what they’re doing as a strategic investment. This can be aggravated by failing to include IT people in business planning. Finally, I’ve seen IT organizations where the business tools used by the rest of the business are not in use in IT.

IT management overload is the third major cause of misalignment. Beyond the usual overload caused by rapidly changing technology and shifting responsibilities (associated with Cloud services, for example), IT management is typically trying to do more with less budget. As the pressure to perform increases, IT management concentrates on operational measures rather than business metrics. In addition, technology shifts are raising the cost and complexity of legacy system support. So IT managers tend to focus on reducing these burdens, rather than looking for new initiatives to support.

Where can we start to correct the lack of alignment between IT and business? After addressing physical location and reporting structures, the most productive way to get alignment is with common metrics. Look for business metrics that are relevant to concrete business results and are particularly dependent on IT service delivery. Then make sure that IT managers understand the business metrics. Finally, make sure that they buy in to being measured by these metrics. To do that, of course, it is best to include them in business planning processes – and not just as number-providers.

What are your experiences with IT – Business alignment? I welcome your comments.

[1] 8 Things We Hate About IT by Susan Cramm, Harvard Business Press, 2010 http://www.eighthates.com/

Three causes of IT project failure

How can IT management fail to understand business goals?