Why Projects Fail…

and what you can do about it …

Warnings: This topic we are about to cover may be somewhere deadly serious, but we try not to be!!!If anyone feel bored during this training session, tell us, we will make it faster.

Abstract

To understand the general idea about the reason why IS projects fail

How does a project be successful? ---- Critical Success Factors

IS project failure happens at any fields----3 Case Study Analysis

Solution to improve project management process

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IntroductionWhat is project failure…

The project costs a lot more than estimated. It takes much longer than everyone expected. The product fails to do what it was supposed to. Nobody is happy about it.

So….Who’s fault?

Software System Project manager

Project Outcomes

1994 1996 1998 2000 2002 2004 20090%

10%

20%

30%

40%

50%

60%

16%

27% 26%28%

34%

29%

32%

53%

33%

46%

49%51%

53%

44%

31%

40%

28%

23%

15%

18%

24%

Successed

Challenged

Failed

• Data Source: The Standish Chaos Report, 2009

“Around 2009, the year’s project management statistics show results that in project success rates, with 32% of all projects succeeding which are delivered on time, on budget, with required features and functions. 44% were challenged which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used.”

Critical Success Factor

Management of The Implementation Process

Formal methodology and reliable estimates Experienced project manager

Level of Complexity/Risk

Project Size Project Structure Experience with technology

Senior Management Support

Users Involvement

Three constraints

Quality

Cost

Time

Project manager use IS to meet three key elements:

• Identify requirements, • Allocate budget • Keep timing constraints

(Bocij, 2006)

Constraints Matrix

Quality Time Cost

Least Flexible

Moderately Flexible

Most Flexible

(Jeff, 2009)

Categories of Project Failure

Correspondence failureCorrespondence failure

Interaction failureInteraction failure

Process failureProcess failure

Expectation failureExpectation failure

Failure to meet the objectives originally

specified for the system

The system is not developed within time and budget

constraints, or the system is never implemented

Poor usage of IS by users (the system itself meets the

technique specification)

‘Inability’ of an information system to meet a specific

stakeholder group’s expectations’

(Lyytinen & Hirschheim, 1987)

Cost overruns

Poor planning and cost

estimation

Poor monitor on time delivering

and poor communication

New technology and poor testing

Poor decision-making, Scope

creep

Time slippage

Technical shortfalls

Forecasted benefits

- Goals not all achieved- Complex Solutions- Lack of Planning- Lack of User Involvement- Lack of Resources- Lack of Commitment- Unrealistic Expectations- Lack of Executive Support- Changing requirements and specifications- Schedule overrun- Budget overrun- Poor leadership and management- Debugging incomplete- Lack of ownership- Too many vested interests

Level of Failure

- Profitability- Poor Estimates- Unproven Tech.- Lack of Res.- Lack of Features- Lack of Usability- Lack of Project

organization- Transparency in IS

Project- Progress Meetings

- Scrapped Before Completion

- Vendor’s Inability to meet requirements

- Client consultation during development stage.

LEVEL ONE(MINOR)

LEVEL TWO(MAJOR)

LEVEL THREE(CRITICAL)

(Bury, 2010)

Case study 1: Failure of Taurus in London stock exchange

Background

A lot of transactions within a day, the paper trail was becoming unmanageable.

In 1987 the antiquated paper driven system almost collapsed under the sheer volume of trades resulting from a rising market.

UK development plans to develop an automated transaction settlement system for the London Stock exchange.

Taurus

Develop an automated transaction settlement system for the London Stock Exchange in 1998.

Aim to create a simple system for large investment houses, which account for over 70% of the value of transactions on the London Stock Exchange.

An 6-month time frame demanded by the securities industry for the completion of the Taurus project.

Original budge is slightly above £6million

Inefficient security market in 19th century

Taurus

Content TitleProject Outcome

Ending budget is £800 million, which is over 130 times of original one.

Previous lose reported by financial times on 3th.Nov, 1993 is just 400 million.

The project is completed nearly 12 years, over 11 years delay.

Develop from several stakeholders to over thirty committees connected to the Taurus project all with their own vested interests.

Complexity of Taurus

Structure of project creates a lack of

cohesion and teamwork between interested

parties

Lacks of leadership and

top management

Failure of Taurus

Cause of failure

(Glotz, 1992)

Improvement

Careful selection of the

appropriate package

Strong

leadershipManagement expectations

Project Team

competenceDedicated resources

Critical Success Factor

(Chapman, 2004)

Case study 2: London Ambulance Service

Area covers 620 square miles

Largest Ambulance Service in the world

Around 4,000 staff at over 70 stations

Carries over 5,000 patients every day

Receives 2,000-2,500 calls each day

(Lond.Ambulance)

Gazetteer and mapping software system

Communications interface (RIFS)

Description of CAD

Radio system -MDTs: Mobile Data Terminals in ambulances -AVLS: Automatic Vehicle Locating System

Computer Aided Despatching System

(Fitzgerald & Russo, 2005)

Outcomes of LAS IS Failure

OUTCOMES

The system could not cope with the load placed on it by normal use.

The response to emergency calls was several hours; 20-30 people died as a result of ambulances arriving too late.

Ambulance communications failed and ambulances were lost from the system.

OVERLOAD

RESPOND CRASH

Reasons of LAS IS Failure

Project Organisation Information System

The complexity of the system

The frustration of the ambulance crews

Communication and response time problems

Poor project managementInexperience of the developers An over-ambitious project timetable Poor training

CSF Improvement

Good project management: lowest cost should not be deciding factor etcGood project management: lowest cost should not be deciding factor etc

Project management

The project should be pre-test before put into practiceThe project should be pre-test before put into practice

Very relaxed project timetable & Training good, timely, and accurate.

Very relaxed project timetable & Training good, timely, and accurate.

(Ein & Segve, 1978)

CSF Improvement

Develop the system more simpler and easierDevelop the system more simpler and easier

Information system

The new system should be as close as possible to the functioning of the manual system

The new system should be as close as possible to the functioning of the manual system

Upgraded the ambulance fleet &make the crews’ job more comfortable

Upgraded the ambulance fleet &make the crews’ job more comfortable

Case study 3:University Accounting System FailureBackground Introduction

University of Cambridge develop a computerized financial

system, which bugs, and continues to be unstable, slow

and complex in its first six weeks. Until now, CAPSA is still

regarded as unreliable and fail to do what it is expected

to do. The result of investigation proved that CAPSA cause

much pain and inconvenience, which cost lots money,

damage the integrity of the university’s financial

processes and tension the relationship between

academics and administration.

(Rohde, 2001)

Causes of FailureThe reasons of system failure include mainly governance

and management

Project manager changed several

times

Not prepare contingency

plans

Project delay

Overspend

Lack of planning of project

infrastructure

Causes

Roles and responsibilities are not clearly

defined

(Laurie, 2003)

Project management

Risk management

Use of consultant

Clear goal and objectives

CSF Analysis

Critical Success Factors

Common factors in three casesPre-test of system

Contingency plans

People risk

What we can do about it…Sometimes, easy ways make your project success:

• Think well, know what you really want

• Trust your team, communicate frequently

• Review everything, test everything

• Say goodbye to complexity

References:• Adamu, M. (2005). London Ambulance Service Software Failure. • Bocij, e. a. (2006). Business Information System: Technology, Development

and Management for the E-Business. America: Pearson Education Limited.• Bury, M. (2010). Understanding Information Technology System Project

Failure. Retrieved 2 28, 2012, from https://docs.google.com/viewer?a=v&q=cache:ZUflYANfHZIJ:www.kean.edu/~rmelworm/10/3040-04.s10/submittals/ITSFailure-MB.ppt+Understanding+Information+Technology+System+Project+Failure&hl=en&gl=uk&pid=bl&srcid=ADGEESiyo66tTcaztmPxFKIkfoTorTOSfqbsRgjSV_xRMF0

• Chapman, J. (2004). System failure:Why governments must learn to think differently. Journal of Demos, pp. 47-48.

• Ein, P., & Segve, E. (1978). Organizational context and the success of management information systems. Management Science 24, 1064-1077.

• Fitzgerald, G., & Russo, N. (2005). The turnaround of the London Ambulance Service Computer-Aided Despatch system. European Journal of Information Systems, pp. 244-257.

• Flowers, S. (1996). Software failure:management failure. Chichester: John Wiley and Sons.

• Glotz, S. (1992). A sequential learning analysis of decisions in organizations to escalate investments despite continuing costs or losses. Journal of Applied Behavioural Analysis, pp. 561-574.

• International, T. S. (2001). Standish Chaos Report:Extreme Chaos. The Standish Group International.

• Jeff. (2009). Truth about the Project Failure. Retrieved 2 25, 2012, from http://www.youtube.com/watch?v=-eb7-3W4npM

• Laudon, K., & Laudon, J. (2011). Management Information System: Managing The Digital Firm,12th edition. Canada: Pearson Education Limited.

• Laurie, J. (2003). Why Project Fail?-A University Accounting System Case Study. Newcastle: Northumbria University.

• Lond.Ambulance. (n.d.). CAD Failure LAS.1992. Retrieved 3 9, 2012, from Lond.Ambulance: http://www.lond.ambulance.freeuk.com/cad.html

References:

References:• Lyytinen, K., & Hirschheim, R. (1987). Information Systems Failure: A

Survey and Classification of The Empirical Literature. Oxford: Oxford University Press.

• Rohde, L. (2001). Cambridge may sue Oracle,KPMG for failed system. London: IDG News Service.

• Stair, R. M., Reynolds, G., & Chesney, T. (2008). Fundamentals of business information system. London: Course Technology CENGAGE Learning.

• Stair, R. M., Reynolds, G., & Chesney, T. (2008). Principles of Business Information Systems. London: CENGAGE Learning.

• Wastell. (2011). Managers as designers in the public services: beyond technomagic. Axminster: Triarchy Press.

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Gala Group