Still, we see one failed IT project after another and yet nothing seems to change. Between 2015 and 2020 only 35% of large-scale technology projects were a success, down from 38% in the period 2010 to 2014.
If they weren’t cancelled altogether (19%) they were one of the 47% considered to be ‘challenged’ by being over time, over budget, or underperforming, up 4% since 2014.1
To put these figures in practical terms, consider the following true story.
In September 2020, the Queensland Auditor-General, Brendan Worrall, released his report on public sector technology projects. He cites the cancellation this year of the Department of Health’s Laboratory Information System. It managed to spend $51 million before this decision was reached.
Also cited in the report, and to provide further context here, was a Canadian Government payroll project that cost CAN$310 million and took seven years to implement. Yet 16 months later, unresolved payroll errors totalled half a billion dollars. It was estimated to take a further CAN$540 million to fix the errors. Hard to believe, but these two projects are typical and are occurring in both the public and private sectors all the time.
It’s hard to imagine any other sector, service or product that could survive with performance statistics like this. Medicine? Airlines? Food? Tyres? Australian films, maybe?
The trouble is that technology project failures are not just embarrassing and costly for organisations, they also cannibalise the budgets of other parts of the organsiation, as we redistribute funds to bail them out. In some instances, they can have devastating consequences, and this will only become even more troubling as technology becomes more and more ubiquitous.
A three-degree change to a compass setting takes you to an entirely new place.
So, despite years and years of experience, and despite the emergence of the tech rock stars, the enterprise IT sector struggles to improve.
It is no accident that the failures are by-and-large in services organisations, where the traditional approach to deliver change is a series of strategic ‘projects’, many of which are technology projects. And projects mean silos, specialism, outsourcing, and other management choices that inadvertently and ultimately disconnect the quality expectations derived from a corporate vision, from the entire implementation process.
We cannot go on like this. And we don’t need to go on. Nor do we need a massive redeployment of resources, or wholesale restructuring. Rather, the main thing we need to do, executives especially, is to recalibrate the way we think about, technology projects, customers and quality.
Perhaps it is best to think of people like Musk, Bezos and Cannon-Brookes as exceptions. And if that is so, the people who need to lead the revolution in thinking are not the unicorn gurus or the IT professionals, but the people who occupy the C-suite.
A fitting analogy is to think about a compass. A change as small as two to three degrees is enough to land you in an entirely different place. So too, a simple smart recalibration of how we think about technology quality today can profoundly change how IT projects land.
So what is that simple recalibration?
We need to stop clinging to an industrial era mindset to quality – what we might think of as a manufacturing legacy – and adopt a mindset tailored to a services-based digital environment. One that rethinks quality to effectively align vision, customer experience, business outcomes, and IT implementation in service organisations.
Ultimately these changes must be addressed by management, but the starting point is to understand that there is a fundamental difference between making tangible products with components and delivering intangible digital experiences with software.
The intangibility of digital services makes it difficult for management and implementation teams to guage whether they are 3 or 30 degrees off in quality. There needs to be a more human centric approach to quality, that fosters a clear line of sight between IT Delivery, the business outcomes and the customers they serve. This human quality approach is frequently missing in large scale projects.
The C-suite needs to bridge the great divide between business strategy and IT delivery. Yet attempts at building a bridge from IT to the other side has not worked. Quality can be that connector. The vision must come first, as shown in the diagram below, which we read from right to left.
The vision and customer experience embodied in a clearly understood definition of quality, is necessary to overcome the great divide between any company’s management expertise and its technological expertise. This will allow service organisations to reinstate quality as a driver of business excellence and deliver value to their customers.
The people to lead this rethink occupy the C-suite. But can they? Will they?
The competencies from a manufacturing legacy have largely been in engineering, structural and systems thinking. All highly suited to making tangible goods by delivering a reliable standard of output.
Intangible services demand their own competencies, ones that contrast sharply with the traditional engineering mindset. Today, the development of digital services favours collaboration, innovation, creativity and interpersonal skills. Yes, engineering skillsets are still required but these softer, more empathetic human competencies are vital to delivering satisfying digital experiences.
These contrasting competency sets are also mirrored in contrasting business imperatives. The industrial imperative was lowering cost through continuous improvement, a quality concept. Whereas the digital imperative is exceeding customer expectations.
What is exciting about these contrasting approaches, is that the features of the digital economy, and the mindset required to do well within in, even its language, are more naturally aligned with the mindset of executives as opposed to software engineers.
So, here is a genuinely liberating fact; you do not need to be a software engineer to be qualified to manage the vision, customer experience and business outcomes that relate to IT projects. All you need is a shared understanding of what quality looks like and an approach that keeps quality front and centre, by creating a clear line of sight between your IT delivery, your business outcomes and your customers.
To be an effective executive in a digitally driven services organisation, you need quality to be the guiding star. The best executives also embrace change and creative challenges when it comes to business excellence and delighting customers.
Given all of the above, it is time for the C-suite to rise to the occasion. To recalibrate the thinking and practice within their organisations. One that will cultivate a more human sense of quality in our mindset and competencies. If we can bring this to the fore services organisations will be fit for the digital age. The risk of failure can’t be any higher than business as usual, yet the upside is enormous. So, what is the rethinking we need? It’s simple, it’s time for service organisations to rethink their approach to technology quality.
1 Chaos Report 2020. The Standish Group, a benchmarking and research company in the USA.