by Tim Sheedy
A factor that tends to be considered when choosing an IT
service provider is how many project failures they have had – particularly when
some of those failures are large, costly, and well-publicized. And if that is
not a formal consideration, project failures are often on the mind of sourcing
organizations. In fact many companies that I have spoken with over the past 12
months have actively excluded some players from their short list due to their
previous failures. These types of metrics tend to work against the large players
as they have more contracts and therefore, if they run at an industry average
failure rate, they are most likely to have more failures. IBM, as the company
that probably does the most IT projects, has the most failures (assuming that
their failure rate is the same as that of their competitors) – and this works
against them. I have actually heard people say that they would never have IBM in
as an IT services partner because of the fact that so many of their projects
fail. And this does not only refer to IBM – you could switch in any large IT
services vendor’s name here as the sheer number of projects they work on means
that they are likely to have more problems too (as very few IT projects go
smoothly). If the failure rate is 1 in 10 (and this is just a guess) then a
vendor that has undertaken 1,000 projects will have more failures than one who
has undertaken 10…
In my humble opinion, focusing on failures or project
problems is a short-sighted view. Project failure is rarely the fault of your IT
services partner – even if it is, it is your fault for not managing the process
effectively and pulling them up before it turns into a failure. The only time
when the partner is to blame is when they promise to do something that simply is
not possible – and again, they are probably just responding to your impossible
requests.
The “X-factor” that seems to separate the average from
the excellent in IT implementations is not their ability to avoid failure, but
how they respond to failures and issues when they invariably do happen. I just
completed many client reference interviews for the ANZ SAP Implementation Wave
that I am working on at the moment, and nearly every client had a major issue at
some stage within the project. Now remember that these client references were
actually supplied by the providers themselves, so these are the GOOD ones –
which means that in the real world the number of major issues within projects is
even higher! It is how the provider responds to these challenges that sets them
apart. Some have great project management to resolve the situation, some have
individual experts who went above and beyond the call of duty to fix the
problem, and some have management who were happy to step in and do whatever it
took to ensure the project gets back on track.
So therefore when you speak to client references (which
you should do before undertaking a major project or outsourcing a large chunk of
your IT) focus more on the problem resolution aspect and less on the rate of
failure or the number of issues – for you will have issues no matter how much
planning and prep work you do! What you will find out in the process can be
hugely valuable when looking for the right partner. For example, one company I
recently spoke with mentioned that whenever things went wrong, the senior
management of their partner always stepped in to make things right. On the
surface that sounds great – exactly what you are after in a partner – commitment
at the management level! But they then went on to say how the CEOs of both their
companies are good personal friends and look out for each other. This should
ring warning bells (unless, of course, your CEO is good mates with your IT
services partner’s CEO!). Others mentioned how whenever there were problems they
were resolved due to their own company’s great project management methodologies.
If you don’t have these great methodologies then this is something to watch out
for as well.
Projects do go off the tracks. And while I have no
empirical data to prove this, my gut feeling is that the number of failed
projects has decreased significantly over the past few years as project
implementation methodologies improve, IT departments are closer to the business
to ensure project alignment, and project sizes have decreased (or at least
implementation times have shortened). It is how you and your partner respond to
the issues that will define not only the outcome of the project, but how much
grey hair you get along the way.