Checklist for large-scale IT projects
Experience has shown that the bigger an IT project, the greater the risk of failure. But it doesn't have to be that way. Andreas Dietze and Patrick Hallinger from Roland Berger Strategy Consultants show you how you can tell if your project is endangered and how to keep it on a safe course.
Major IT projects are often destined to fail. Yet this is not the case for small IT projects. The success rate for projects with a team of up to six people and a timeframe of around six months has been calculated to be more than 55%. As the size of a project increases, however, chances of a successful outcome tend more and more likely toward zero.
Major IT projects are often destined to fail. Yet this is not the case for small IT projects. The success rate for projects with a team of up to six people and a timeframe of around six months has been calculated to be more than 55%. As the size of a project increases, however, chances of a successful outcome tend more and more likely toward zero.
Success rate of IT projects declines as project size increases
Definition: What is a large-scale IT project?
By "large-scale IT project", we mean a project that meets at least one of the following criteria: The project is planned to run for at least one-and-a-half years or the team comprises at least 150 people. Moreover, the project organization is clearly marked off from the rest of the corporate structure; in some cases, a separate project entity is set up for the purpose. Finally, large-scale IT projects typically involve between 50,000 and 100,000 closely interlinked processes.
But why should such big projects tend to be at greater risk of failure than small ones? We know from experience that involving many stakeholders means they all try to influence the project's goals. Everyone involved has his or her own agenda and his or her own objectives. Another problem is that IT projects are typically already overdue by the time they are initiated. This means that companies have very little time to clearly define their new IT requirements. Finally, the people assigned to the project frequently have difficulties with the project content and approach because these projects are all too often defined in largely abstract terms. The result is a project that is highly complex and raises unrealistic expectations.
Checklist: Six signs of impending failure
It is therefore important that companies find out straightaway if an IT project is at risk. The following checklist can be useful:
To guide large-scale IT projects to a successful outcome, companies must prioritize certain elements of project management. The most important ones are:
Especially in the case of big projects, it is important that teams pay careful attention to expectation and scope management. Customers and vendors must agree clearly on what the project can and can't achieve. In practice, we unfortunately find that all too often, vendors define the requirements to be met by the IT system independently of (internal) customers. The necessary interaction between the two parties does not take place.
2. Project planning and control
In many projects that threaten to go wrong, there is no overall project plan, or the existing plan is not regularly updated. But it is precisely project planning that offers the only way to think through the future of the project in detail, identify interdependencies, estimate the inputs and allocate resources – all core aspects that should be properly coordinated both, internally and externally. Of course, unexpected deviations from the original project plan can always occur, but the aim should be to be as well prepared as possible for any deviations.
3. Risk management
The rule is: The more extensive the project, the more important the role of risk management. However, in most cases it is quite sufficient to list the risks and evaluate them according to the probability of occurrence and their potential impacts. We suggest the following scheme:
Consequences (C) of the risk occurring – Rated on a scale of 1-10 (1 = minimal, 10 = complete failure)
Probability (P) of the risk occurring – Rated on a scale of 0-100%
A risk coefficient (RC) is then calculated by multiplying C with P, and becomes one of the most important measure for the entire project.
By "large-scale IT project", we mean a project that meets at least one of the following criteria: The project is planned to run for at least one-and-a-half years or the team comprises at least 150 people. Moreover, the project organization is clearly marked off from the rest of the corporate structure; in some cases, a separate project entity is set up for the purpose. Finally, large-scale IT projects typically involve between 50,000 and 100,000 closely interlinked processes.
But why should such big projects tend to be at greater risk of failure than small ones? We know from experience that involving many stakeholders means they all try to influence the project's goals. Everyone involved has his or her own agenda and his or her own objectives. Another problem is that IT projects are typically already overdue by the time they are initiated. This means that companies have very little time to clearly define their new IT requirements. Finally, the people assigned to the project frequently have difficulties with the project content and approach because these projects are all too often defined in largely abstract terms. The result is a project that is highly complex and raises unrealistic expectations.
Checklist: Six signs of impending failure
It is therefore important that companies find out straightaway if an IT project is at risk. The following checklist can be useful:
- There are no or only inadequate time schedules for the (sub-)projects.
- New IT requirements are constantly being added – With no "freeze", overlaps occur with the implementation phase.
- The project team members cannot concentrate sufficiently on the project because of their commitments in operational business.
- Project management fails to make necessary decisions, and instead keeps referring to other decision-makers.
- Important project steps are constantly being postponed, and project progress lacks transparency.
- Budget top-ups are necessary or are repeatedly considered.
To guide large-scale IT projects to a successful outcome, companies must prioritize certain elements of project management. The most important ones are:
- Expectation and scope management
- Project planning and control
- Risk management
- Top-management reporting and project marketing
- Resource management
Especially in the case of big projects, it is important that teams pay careful attention to expectation and scope management. Customers and vendors must agree clearly on what the project can and can't achieve. In practice, we unfortunately find that all too often, vendors define the requirements to be met by the IT system independently of (internal) customers. The necessary interaction between the two parties does not take place.
2. Project planning and control
In many projects that threaten to go wrong, there is no overall project plan, or the existing plan is not regularly updated. But it is precisely project planning that offers the only way to think through the future of the project in detail, identify interdependencies, estimate the inputs and allocate resources – all core aspects that should be properly coordinated both, internally and externally. Of course, unexpected deviations from the original project plan can always occur, but the aim should be to be as well prepared as possible for any deviations.
3. Risk management
The rule is: The more extensive the project, the more important the role of risk management. However, in most cases it is quite sufficient to list the risks and evaluate them according to the probability of occurrence and their potential impacts. We suggest the following scheme:
Consequences (C) of the risk occurring – Rated on a scale of 1-10 (1 = minimal, 10 = complete failure)
Probability (P) of the risk occurring – Rated on a scale of 0-100%
A risk coefficient (RC) is then calculated by multiplying C with P, and becomes one of the most important measure for the entire project.
Risk coefficient (RC): a simple scheme for assessing project risks
4. Top-management reporting and project marketing
Since project managers often do not bear the responsibility for their project, it is crucial to have a transparent reporting system. In practice, the role of reporting is frequently underestimated. Good reporting allows you to check on the plausibility of a project, track actual and target status, and communicate the progress made. Information should also be prepared and presented in a way that is clearly intelligible for stakeholders not directly involved in the project.
5. Resource management
To be carried out successfully, large-scale IT projects demand rigorous resource management. This is not only a question of appointing the right people to the job, but also of focusing on HR challenges such as the development prospects for project-critical employees. Successful managers of major projects usually have many years of experience in the field of project management (they must not be “just” topic expert). The should be able to motivate other team members. It is important for colleagues to know that project management will not turn out to be a dead end for their own career.
Core points that will make a difference
It is unfortunate that IT projects often have a very abstract character for most of the people involved. In addition to the usual challenges associated with any large-scale project, e.g. high level of complexity, IT projects also cover further core elements, such as managing expectations, which companies should not underestimate.
Five guiding principles for project success
To gain control over all these factors, businesses should observe the following five guiding principles :
Since project managers often do not bear the responsibility for their project, it is crucial to have a transparent reporting system. In practice, the role of reporting is frequently underestimated. Good reporting allows you to check on the plausibility of a project, track actual and target status, and communicate the progress made. Information should also be prepared and presented in a way that is clearly intelligible for stakeholders not directly involved in the project.
5. Resource management
To be carried out successfully, large-scale IT projects demand rigorous resource management. This is not only a question of appointing the right people to the job, but also of focusing on HR challenges such as the development prospects for project-critical employees. Successful managers of major projects usually have many years of experience in the field of project management (they must not be “just” topic expert). The should be able to motivate other team members. It is important for colleagues to know that project management will not turn out to be a dead end for their own career.
Core points that will make a difference
It is unfortunate that IT projects often have a very abstract character for most of the people involved. In addition to the usual challenges associated with any large-scale project, e.g. high level of complexity, IT projects also cover further core elements, such as managing expectations, which companies should not underestimate.
Five guiding principles for project success
To gain control over all these factors, businesses should observe the following five guiding principles :
Five guiding principles for project success
- Launch management is craftsmanship: You must insist on well-trained people and implement an integrated master plan from the outset.
- Avoid best-case planning scenarios: Deal openly and honestly with the expectations of (internal) customers.
- Prefer several smaller project packages where possible: The more clearly defined the project, the easier it becomes to realize. So try to break down big tasks into several independent project modules.
- Apply well-known technologies: If you are deploying novel technologies in the project, make sure you assess and plan them very carefully. Unless the use of new technologies is absolutely necessary, it is better to rely on proven solutions you know will work.
- Insist on open communication and clear decision-making channels: Set up institutionalized and clearly defined lines of reporting to (internal) customers and to senior management or the project sponsor.
