22 December 2014
Øyvind Stensby, PA IT expert, has had a byline article published in Finansavisen, discussing the failure of IT projects.
Øyvind explains how IT scandal, NAV, has become a symbol of failed government IT projects and how Riksrevisjonen, the Office of the Auditor General of Norway, estimates NAV has lost up to $170 million of an IT investment of over $720 million in the latest of a series of failed IT projects. According to historical trade figures, 60 per cent of IT projects are over budget 60 per cent of the time, and managers end up with only 60 per cent of what they initially expected.
Øyvind states that failed IT projects have a significant impact on businesses, with increased internal costs and lost business opportunities. The problem is that the top managers responsible have failed to identify the success criteria for their project and how they will ensure the project’s success.
He says: “The need for rapid change, combined with demands from authorities and customers, means IT solutions must be implemented at a faster pace. Add to this, the new features for web, big data, social media and mobile platforms, it is no wonder companies easily lose control of the IT solution and project budget. One in 20 IT projects are so poorly implemented that they threaten the existence of enterprise they should improve.”
To combat this trend, Øyvind says companies must better plan and follow up IT projects so the chance of success increases: “If you wait until a problem has arisen, it is probably too late to fix it. These problems are generally caused by inadequate planning, an unclear scope, poor decisions and an excessive eagerness to get started.”
Øyvind concludes by saying the solution is to build the project on realistic aspirations, ensure clear and agreed project scope, anchor consequences and objectives among stakeholders, and understand the business model and the landscape they operate in.
Øyvind Stensby is an IT expert at PA Consulting Group