Large scale it projects
- 1. Large scale IT projects Expert’s view – McKinsey & University of Oxford Analysis
- 2. Importance • No need to elaborate – Just look around! • Mobility, analytics, big data have changed the rules of business as we knew it once • Smart businesses embracing IT
- 3. What the experts have to say? McKinsey & University of Oxford about large scale IT projects: • 50% massively blow their budgets • 56% less value delivered • 7% over time • 17% threaten the existence of the company. Termed as black swans
- 4. Ways to Improve • Focusing on managing strategy and stakeholders instead of exclusively concentrating on budget and scheduling • Mastering technology and project content by securing critical internal and external talent • Building effective teams by aligning their incentives with the overall goals of projects • Excelling at core project-management practices, such as short delivery cycles and rigorous quality checks
- 5. Reality check Let us dig deeper and see what are the issues/pain areas with the suggested ways to improve by the experts. This should provide some insight to the big IT vendors (I believe they may already be aware). This could also prove to be helpful to companies while choosing their IT vendors.
- 6. Problem – 1 Focusing on managing strategy and stakeholders: • Too many people involved at the top management to realize that budgeting and scheduling should not be the drivers of a large scale IT project • Companies not choosing the right IT partners - outsourcing execution to lowest bidding vendors who lack business focus • Vendors often miss out on this owing to unclear objectives & lack of understanding of the complete picture • Companies not treating vendors as partners in true sense
- 7. Problem – 2 Mastering technology and project content: • When companies go for lowest bidding vendors as IT partners, they do not get the best talent • Resource burn out, lack of motivation & resulting attrition because of long project duration and schedule & cost overruns • Vendors not well poised to grasp shifting requirements and their impacts owing to not so great business focus & poor stakeholder management
- 8. Problem – 3 Building effective teams: • Incentive structures at vendors are rarely aligned to overall project goal • Teams do not reach optimum output owing to the lack of skills, burn out and lack of training opportunities
- 9. Problem – 4 Execution issues: • Weak stage gates – leading to rework for different teams • Excessively high number of processes to be followed (not required by companies but internal to vendors) resulting in missing out on the few important ones
- 10. Lessons We saw what the pain areas are and we do understand what could be done to improve the outcome for large scale IT projects. Next time you want to kick off a large business transformation project, beware of the pitfalls and do work on the ways to improve as suggested by the experts.