IT Project Risk Assessment

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IT Project Risk Assessment
J. Dowling - August 22, 2002


Information technology project risk often comes from non-technical aspects of the initiative. Assessing the impact of technology on people, management systems and other initiatives is essential to assure project success.

"We automate problems" This department slogan was posted on my office door (the inside) for several months while I and other managers in the department struggled to break out of a string of failed projects. It was apparent that we were not being successful because our clients and management told us exactly what they thought of our work and it wasn't good. We felt strongly that we were not a collection of dunces that had stumbled into IT management and we took no solace in studies that report typical project failure rates of seventy-two percent.

Note: This note first appeared in a column by James F. Dowling in Mid-Range Computing. Look for other previously published Mid-Range Computing columns by Mr. Dowling at this site or visit Midrange Showcase at

Why Did The Projects Fail?  

Being the technologists that we are, we embarked on a tedious and somewhat embarrassing self-examination of projects and skills. Projects were diagnosed with the clinical rigor of a post-mortem. We found solution design flaws, project task omissions, execution deficiencies and product choices that might have been more thoroughly considered. Perhaps led by facts and perhaps constrained by ego, we did not feel that project design and team skills accounted for the consistency with which we missed due dates and failed performance tests.

While we dissected our portfolio of recent projects, we came across a number of issues that were not related to the technical aspects of solutions design and project execution. We placed these into a "parking lot" for future examination. The list consisted of issues that the IT Teams had with other IT Departments, the client and with parties within the company that we felt should not have been involved.

  • Late delivery of critical networking components was traced to a finance executive who wanted capital expenditures held up until he could challenge the project in an Executive Committee meeting.

  • Protracted training was attributed to delays within the Human Resources department as they obtained approval of salary structure benchmarks for new jobs created by changed business process.

  • A Data Warehouse and Executive Information Systems project disaster was attributed to a solution designed, built and tested for a client-specified sales force organization and compensation structure that were not executed or even approved before the system went live.

  • A business process engineering project ran up significant costs creating a splendid design for a business unit that was sold shortly after implementation commenced.

Analysis and discussion with management within the business units who made up our client base made it clear that IT projects must consider much more than the technical aspects of projects to assess scope and risk. We knew this and we had already taken measures to makes all projects that we undertook business process improvement projects rather than thinking of them as information systems projects. We had also taken measures to have all such projects led by business management with executive approval.

The lesson that we learned however, is that we transferred the project risk associated with environmental to our business partners. We had avoided true project risk assessment and management.

Lessons Learned  

Following are some of the lessons learned that we built into our Project Engineering Process:

What value will be derived from this solution?

  • Increase Revenues?

  • Cost Savings/Avoidance?

  • Cost Reduction?

  • Cycle Time Reduction?

  • Improve Productivity?

  • Labor Reduction?

  • Head Count Reduction?

  • Improved Performance?

  • Improved Cash Flow?

  • Improve Customer Satisfaction?

  • Enable Teamwork?

  • Enable Quality Improvement?

  • Supplier Relationship?

  • Establish Competitive Barrier?

  • Establish Competitive Advantage?

  • Create or Enable a New Product/Service/Capability?

  • Improve Planning Effectiveness

What are the environmental impacts / requirements?

  • Can failure interrupt or damage critical daily business operations?

  • Can failure in this effort damage the company's reputation?

  • Can this effort incur/cause significant other financial losses?

  • Is this effort in search of a clear champion?

  • Is this effort in search of a clear project leader/manager?

  • Is this a large project effort? (> 6 months or $100,000)

  • Will this effort be on an accelerated or tight time schedule?

  • Does this address a longstanding difficult issue or problem?

  • Has this problem/issue been unsuccessfully addressed in the past?

  • Is more than one organization involved (not including I/S)?

  • Will more than one organization be impacted by the outcome?

  • Are any stakeholders opposed to/highly skeptical of this proposal?

  • Is the outcome dependent on experimental technology?

  • If so, will more than one supplier of critical components be involved?

  • Is a high level of technical complexity involved?

  • Is this a first time effort at this company for a project of this kind?

  • Will outside contractors lead or provide key project deliverables?

  • Will > 5 persons be on the project team or Steering Committee?

  • Does a project plan/responsibilities still need to be established?

  • Does the project team lack needed skills/related experience?

  • Is the project team matrix managed/controlled by many managers?

  • Do key team members reside in separate departments/buildings?

  • Will implementation require significant formal user training?

  • Will this require implementation and training at >1 site?

  • Are there doubts about commitment/availability of key participants?

It is essential to have the entire enterprise know: why such projects are being undertaken, the breadth and depth of impact across the enterprise, the risks that will require diligent attention and management and what each department manager will be accountable for to result in a success for the enterprise, not just for the project team.

Change Produced Results  

To obtain maximum benefit from this type of assessment, the Corporate Information Services Department had to change its organization structure, operational processes and even culture. Over a four year period, the teams saw project success rates climb to ninety-plus percent, operating costs reduce by more than thirty percent, client satisfaction reach new highs each year and a three-year, sixteen million dollar backlog shrink to nil. The transformation was certainly as stressful as it was productive. In fact, a Climate Assessment Survey reported that the department had the second highest levels of Stress and Employee Motivation level in the company but, that is a subject for another time.

This column will continue to explore the change/size paradox-big companies desiring speed and growing companies desiring stability. The author would appreciate feedback on material presented as well as suggestions for future study and reporting. The general theme is IT management and the goal is to make it easier to get clients what they want and what they need to succeed.

About The Author  

Jim Dowling is VP of the Alignment Consulting Practice at TechnologyEvaluation.Com, Inc. located in Woburn, Massachusetts. TEC researches IT products and suppliers as well as the ways companies obtain business value from IT. TEC's consulting services remove time, risk and ultimately cost from IT related decisions.

Jim can be reached at jdowling@TechnologyEvaluation.COM.

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