Three reasons why IT projects fail to deliver

Peter Sommer, research fellow at the London School of Economics' Computer Security Research Centre asks, 'Can we ever Trust IT?', the first of our five Agenda Setters topics

Why do so many government and corporate IT projects disappoint - or fail?

Why is the dominant family of desktop operating systems and applications so full of bugs and security holes? Is the computer industry uniquely incompetent - or dishonest? Are its sales staff particularly prone to over-selling?

The answers fall into three areas: IT products are, compared with almost everything else, uniquely complex. Sales staff, however grand their title, operate in a highly volatile environment which strongly influences their behaviour. And too many customers are passive, lazy, or ignorant.

Let's start with the salesperson's problem. This industry is astonishing for the rate of innovation. A couple of things follow. First, the fortunes of products and even companies can rise and then fall very rapidly. Revenue today is key.

Second, unless you are very persuasive, your customer may want to hold out for the maturing of the products which will follow after the one you have to sell today - or decide that the existing installation is good enough.

As a result, you need to sell quickly and efficiently; not for you the luxury of slowly building customer trust. So you sell on 'vision' - 'we admire your genius as a business leader / politician and can support you with our products'.

You can try some sonorous and portentous slogan, such as 'Business Process Re-engineering' - think a little how your business works - 'Total Quality Management' - there must be something you aren't doing quite right - or 'Customer Relationship Management' - it would be helpful to know a little about who buys your products and services.

If you are in the desktop business what you sell is 'features' - gimmicks - while trying to persuade customers to buy an annual renewable licence rather an outright purchase.

What the salesperson can't afford to do is spend a great deal of time considering what the customer really needs, as opposed to what they initially say they need, or can be persuaded to need. And even if a customer requirements assessment takes place, the product would then have to be built, or customised - how much better for revenue and cash-flow if the customer buys what you already have!

This means all customers have to be much more savvy and alert. We still haven't emerged fully from the 'outsourcing is best' syndrome, where business managers are discouraged from maintaining too many permanent staff and simply buy in services and facilities as needed. Many a business reputation has been earned - short-term - simply on the profit gains from shedding permanent IT staff.

Most companies don't need the big 'shops' of a decade ago, but we now have a generation of managers who think that IT can be bought on the basis of attending a few vendor presentations and the holding of a short competitive tender.

Too often the winners are the lowest bidders who, at best, have not realised they have under-estimated and at worst, hope that they'll be able to favourably renegotiate as the contract progresses because the purchaser can't afford to be seen to have made a mistake. My friends and colleagues among lawyers and experts who specialise in IT disputes tell me that poor initial procurement and specification is still the main reason why contracts fail.

The remedy is that any organisation purchasing IT needs to have a core resource to assist, one which is 100 per cent committed to the organisation - that means proper permanent careers within the organisation measured against the delivery of quality IT services. And for most organisations that implies the boss of that team is on the main board, playing a central part in overall strategy.

Buying in 'wunderkind' consultants for a few months is only slightly better than hoping that vendor competition will solve everything.

In government, this task is particularly difficult to pull off. Civil servants tend to change jobs every three years or so, which is a shorter time than most IT projects take from inception to delivery. In any event, the Civil Service rewards go to those who can make elegant policy judgements as opposed to those who can manage complex administrations. Ministers, elected politicians, operate on an even briefer time-frame.

Mistrust between IT vendors and customers? It is largely up to customers to make the investment in staff so that they can look after themselves.

What our agenda setters think

John Lyons, crime reduction co-ordinator, National Hi-Tech Crime Unit

'Technology isn't only the IT dept's responsibility. When users don't get the chance to feed in their requirements properly, it often results in a situation where the technology developed doesn't meet user's needs. If we can get people to be accountable for their input, then you're most likely to get buy-in for the solution itself. It's a matter of pushing it out into the rest of the business to get that trust.'

Steven Clarke, head of technology investments, Kleinwort Capital

'Given our financial background, I interpret trust as the reliance a customer places on the financial stability of their vendors. The government, for instance, has enormous spending programmes in place for health and defense, with a huge amount of trust placed in their suppliers. And yet, the scale of the organisations are quite different. The biggest players will have a few thousand people, while most will only have a few hundred. Meanwhile, the customer has tens of thousands of people in IT.'

Gareth Lofthouse, European director for executive services, Economist Intelligence Unit

'Trust - or more often the lack of it - is a huge issue for companies today. Businesses are under unprecedented pressure to prove that they adhere to the highest standards of corporate governance; that they comply with a raft of complex regulations; that they can protect their customers against malpractice and a plethora of external security threats; above all, that they can deliver on their promise to customers time after time. Faced by these pressures, companies need systems they can trust to do the job. They are growing increasingly intolerant of IT systems that are vulnerable to failure, inherently difficult to manage, and that frequently underperform against business expectations.'

Dana Gordon-Davis, corporate finance executive, CSTIM CFAS

'The problem with IT projects not meeting expectations is a classic project management issue, which is exacerbated in IT. It results from people not adequately defining their requirements and not sorting out their basic business processes. If you automate a mess, you just going to get an automated mess. It's not necessarily the technology's fault. More time needs to spent defining requirements and then attaching these to actual business processes.'