After a Massive Tech Project Failure: What IT Can Expect

The bigger the failed IT project, the harder the CIO falls -- almost never to recover, says Chris Curran, partner and CTO of Diamond Management & Technology Consultants. His advice: To avoid catastrophic project failure, do projects in bite-sized chunks, set proper expectations and embrace transparency.

Your department—information technology—has just played a starring role in blowing a multimillion-dollar enterprise software project. The intense glare from the CEO, CFO and other business leaders is squarely focused on the CIO, VP of applications, project managers and business analysts charged with making sure that this didn't happen.

Of course, IT is never 100 percent at fault for any massive project—whether an ERP or CRM implementation, mainframe migration or networking upgrade. The business side usually plays its part (think: "Best Supporting Actor in an IT Debacle").

But the unfortunate and unfair fact is that because these initiatives are considered "technology projects," the business will most always look in IT's direction when there's blame to be tossed around.

That's just a fact of life in IT, says Chris Curran, who's both a consulting partner at Diamond Management & Techonology Consultants and its CTO. Curran has seen plenty of IT carnage over the years: CIOs who resist against changing implementation methods—holding firmly to the waterfall when agile is the best option—and killing projects and their careers; multi-vendor and system integrator "teams" that backstab each other and submarine IT's credibility; and project managers who get "splattered" because an implementation goes off the rails, Curran says. (He says with some wonder that failures never seem to affect the vendors involved: "It's never their fault," he says, "and the vendors tend to keep above the fray.")

Curran mentions one insurance company CIO who was betrayed by warring integrators and vendors working on a project and was relegated to "managing IT,"—and the CFO took the project reins. "The CIO was on the glide path to leave after that happened," Curran says. "They spent two more years on that project, and it went belly up." (To get the CFO on your side, read "How to Win CFO Friends and Influence Business People.")

In this instance, Curran says, the "CIO didn't have the credibility with senior leadership team [to show] that he could manage through rocky vendor issues."

The "Alignment-Accountability" Paradox

No sane executive would dismiss the strategic importance of IT today. And most don't: An IT Governance Institute study, consisting of more than 250 interviews with executives of both large and small companies in a variety of industry sectors, found that half of the respondents said that IT is "very important to the enterprise," and three-quarters stated that they align IT and business strategies.

When it came to IT project accountability, "executive management" was identified as the group held accountable for IT governance in 71 percent of the enterprises.

That's all well and good.

But when it comes to walking the walk with technology projects (and presumably when the 'you-know-what' hits the fan), non-IT executives appear to fall back on familiar rhetoric. In a similar 2009 survey of more than 500 IT professionals by ISACA, a nonprofit trade group focusing on corporate governance, nearly half of respondents said "the CIO is responsible for ensuring that stakeholder returns on IT-related investments are optimized," notes the survey report.

Just 20 percent stated that the responsibility lies with the board, the CEO or the CFO. "The business is delegating ownership of value to IT," notes Robert Stroud, international VP of ISACA in the report, "when generally accepted IT governance guidance recommends that it should remain with the business."

Curran takes those results a step further. "Business investments need to have business accountability," Curran says. "But when a project goes south, especially high-profile ERP implementations, IT gets blamed—but it's not an IT project."

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