Understanding Information Technology System Project Failure By: Michael Bury MIS

Abstract  Over the last 20 years failure has become synonymous with Information Systems (IS) Projects.  This research is aimed to understand the reasons for IS project failure.  IS project failure does not occur in any single industry and can happen anywhere at anytime.  IS Failure is not caused by just tech failures but organizational and functional problems in a business.  20 Critical Success Factors (CSF) are introduced that are vital to the success of a project.

Introduction  Case Studies chosen from the last fifteen years from Ireland, UK, and USA will act as examples to show that IS project failure can occur anywhere and anytime.  Four case studies of Information System development are analyzed (Taurus, DIABHS, ISIS, and NATS)

Information System (IS)  Serves to coordinate the work of different organizational functions and is the core of any business.  Aims to increase efficiency and effectiveness of business practices.  Implementation of an IS involves the design, delivery, and use of the software systems in the organization.  Information Technology (IT) is the enabling tool that powers the IS. IT is used by IS.

Defining an Information System  The authors Definition: “An Information system is composed of software, hardware, communication systems, and people. It is a critical investment for organizational survival. It increases the efficiency and effectiveness of daily business by integration organizational processes and structures”

Critical Factors for Project Success Baker et. al. (1983) Morris and Hough (1987) Pinto and Slevin (1989) Turner, J.R. (1993) -Clear Statement of Requirements -Proper Planning -Competent Staff -Clear Vision and Objectives -Hard Working Staff -Leadership -Resources and Funding -Low start-up Difficulties -No Politics -Clear Statement of Requirements -Proper Planning -Competent Staff -Resources and Funding -Low start-up Difficulties -No Politics -User Involvement -Executive mgt. Support -Competent Staff -Hard Working Staff -On time, under budget -Satisfies owners needs -Leadership -Teamwork -No Politics -User Involvement -Executive mgt. Support -Competent Staff -On time, under budget -Satisfies owners needs -Teamwork -No Politics CHOAS REPORT (1994) Wateridge, J. (1995) Whitaker, B. (1999) Boehm, B. (2002) -User Involvement -Executive mgt. Support -Clear Requirements -Proper Planning -Realistic Expectations -Smaller Milestones -Competent Staff -Ownership -Clear Vis. & Obj. -Hard Working Staff -Project achieved purpose -Satisfactory benefit to owner -Satisfied needs to owner -Meets pre-stated objectives -On time, under budget -Satisfied project team needs -Good Project Planning -Strong Bus. Case -Tom mgt. Support -Schedule time keeping -Within Budget -Good Estimates -Strong requirements -Ability to meet req. -Complete requirements -User Involvement -Resources -Realistic Expectations -Executive Support -No scope extension

Analysis of CSF  Most occurring qualities of Successful systems: -On time, under budget. -Project Delivers its functionality. -Clear Vision & Objectives -Executive Management Support

Understanding IS Project Failure  70% of large-scale IS investment fail.  Project must meet a number of objectives and goals.  Important parameters to meet will be: -Return on Investment -Profitability -Competition -Market Ability

Defining Project Failure  Author believes in a degree of failure. Category of FailureDescription of Failure 1.Correspondence Failure 2.Process Failure 3.Interaction Failure 4.Expectation Failure -The IS fails to meet it’s designated objectives. -The IS overruns it’s budget or time constraints -The users maintain low or non-interaction with the IS -The IS does not meet stakeholders expectations.

LEVEL OF FAILURE LEVEL ONE (MINOR) LEVEL TWO (MAJOR) LEVEL THREE (CRITICAL -Profitability -Poor Estimates -Unproven Tech. -Lack of Res. -Lack of Features -Lack of Usability -Lack of Project organization -Transparency in IS Project -Progress Meetings -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 -Scrapped Before Completion -Vendor’s Inability to meet requirements -Client consultation during development stage.

Levels of Failure  Level one is considered minor. Final IS project does still meet its objectives and is completed.  Level two failure is major. IS project does not meet all requirements and will not be achieved within budget and one time.  Level three is critical failure. IS project odes not meet any of its requirements and objectives. Most likely to be scrapped after running over time and budget.

Case Studies  Two of the four case studies resulted in failure (Taurus and ISIS)  Two cases succeeded (DIABHS and NATS)

Taurus  Develop an automated transaction settlement system for the London Stock Exchange.  Electronics submission would enable the securities Industry to eliminate paper transactions.  Project began in  Aim to create a simple system for large investment houses.

Design and Implementation  An 18-month time frame was demanded for completion.  Involvement of new and untested technology and project complexity made this deadline nearly impossible.  The Design Stage initially scheduled for two months lasted two years.  Lack of Leadership and the spread of ownership steered project toward failure.

Design and Implementation (Continued)  Decision was made to use off-the-shelf software to speed up development cycle.  The software was nearly 20 years old.  The use of state of the art technology and software on hardware that was twenty years old was illogical.  Project team believed that building the outward part of the system first would make interested parties happy.

Outcome  Original budget = £6 Million  Ending budget = £800  Main factors due to failure of project were identified as power, politics, and responsibility.  The persistence to deny failure dragged the project on and is identified as a socio-economic problem rather than technological.  Lack of Leadership and Management had detrimental effect on the project/project team.  Taurus project was labeled a project 3 failure because the majority of the CSF were not achieved.