While reading an article preview on Why Your IT Project May Be Riskier Than You Think, we came across a comment by James Watson which deserves a wider airing. Actually warranting a post on its own, this response is about projects which are labeled as black swans, and is a reason why companies looking to engage in IT enabled transformation should take a deep breath.
If your company leadership is considering a strategic change of direction, planning on ditching your in-house custom software without taking the advice of the internal IT professionals, or without competent IT stakeholders at the highest levels of the organization, then you should point out this post to them without delay. Remember, Information Technology is part of your core business.
The issue is that in most non-software companies, information technology is treated like something separate from the business. The conventional wisdom of a decade ago dominates. That is, if your company is not producing software for sale, it shouldn’t be building software. It should be purchased, like Word or Excel.
This line of reasoning seems pretty bullet-proof until you dig into the details and it leads to a number of problems including the issues in the article. First, lets be clear, no company should seek to build software for internal use that can be purchased at reasonable cost and can can meet their needs without customization.
Secondly, companies should seek to purchase or otherwise acquire software that implements the generic functions and allows for powerful customizations. The issue arises when companies purchase something like SAP assuming that their needs are sufficiently supported by the software and that anything they need that is special will be supported by ‘configuration’.
What then happens is that the company realizes (after investing large amounts of money) that they can either make their business completely generic and lose all strategic advantage over competitors or they can pile on a lot more money to customize the hell out of it. Given the options, most high-level execs prefer more investment over losing strategic advantage. Some companies (I suppose) choose the other option and a lot of IT people think this is a good idea (it isn’t.)
You might be more likely to succeed at the project but the company will often be ruined in the process. In the ‘success’ example, I wonder how much of the companies strategic differentiation was sacrificed in order to avoid increasing scope. Alternately, the ‘success’ could be a shelfware system that is unusable because it doesn’t meet business needs. I have seen many ‘successful’ projects that produce no positive business value.
The true error is taking on a project based on false assumptions and magical thinking. Once that mistake is made, there are no good options. Companies need to stop thinking that information technology is separate from their core functions. Most information technology is only worth having if it is tightly coupled to the design of the business and often technology imposes fundamental constraints on business.
No project management methodologies or helpful tips will address this problem. Companies need to embrace technology and make IT a stakeholder at the highest levels of the organization for the kinds of problems described in the article to be fully addressed.
This comment by James Watson was cribbed wholesale from Why Your IT Project May Be Riskier Than You Think by Bent Flyvbjerg and Alexander Budzier. Check out the full article and then quote James Watson to your company leadership!