Memories of past IT projects still shape new decisions

How does your organisation react when someone proposes a major IT project? What memories does the suggestion bring back? The answer may tell you more about your ability to modernise than a technical analysis could.

A failed IT project does not necessarily disappear from an organisation’s memory when the project ends and those responsible leave. The experience can become embedded in its culture and influence decisions many years later. Borrowing a concept from psychology, we might call this intergenerational organisational trauma, one generation of leaders and employees passes its fear on to the next, even though the new decision-makers never experienced the failure themselves.

When fear takes over

Many organisations know they need to modernise their ageing core systems. But after decades of delayed, over-budget and widely criticised IT projects, the prospect of a major system change can set alarm bells ringing. So they choose smaller projects, shorter timelines and results they can demonstrate quickly. A step-by-step approach makes sense. It moves away from the enormous projects of the past when organisations tried to change everything at once. But caution and fear do not lead to the same decisions. When fear takes over, organisations solve the problems they feel able to manage and avoid changes that seem too large or risky.

Control can create a false sense of security

After a failed IT project, an organisation will often try to regain control. It breaks modernisation into tiny projects, adds more checkpoints and demands quick, measurable benefits. Each project looks manageable. Together, however, they may do little to address the underlying problem. Without a shared goal, small projects can create even more systems, connections and temporary fixes. We saw this during the rollout of robotic process automation and we risk repeating the pattern with isolated AI solutions. Individual departments get help with their immediate problems while the overall IT landscape becomes more complex.

Society still runs on old code

Banks, transport companies and public authorities rely on ageing core systems every day to handle critical processes and large volumes of data. These systems are often stable and contain valuable knowledge about how the organisation works. Organisations cannot simply switch them off and start again. But they spend increasing amounts of money and expertise keeping them running. The specialists who understand these systems are approaching retirement or have already left the workforce. Even so, many organisations postpone fundamental modernisation and build new solutions on top of the old ones. A small project can succeed on its own terms. But if ten departments each improve their own system, the organisation does not necessarily end up with a simpler, more robust technology foundation. It may simply have ten new solutions that must also work with everything that is already in place.

Small steps need a clear direction

The answer is not to return to megaprojects. Organisations should modernise step by step, learn as they go and adjust course. But they need to know where they are heading. Leaders must be able to say which legacy systems the organisation eventually needs to move away from, which parts it should retain and how each new project brings it closer to that goal. Otherwise, small steps become a way of living with the problems. Past failures offer valuable lessons. But if fear sets the level of ambition, organisations risk repeating the biggest mistake of all: putting off the decisions they need to make.

Read the article in Finans in Danish.