The discrepancy among the understanding of IT managers, executives, and end-users on the success and implementations of projects has invariably risen, a new survey shows. The second annual Getting IT Right Survey by IDC and the Getting IT Right Initiative aims to determine the performance of information technology in the country.
In the 2011 study, a number of areas that IT and non-IT managers needed to work on to harness the potential of IT were disclosed. The 2012 survey, for its part, aimed to explore the supposition that a misalignment of IT with business strategy within New Zealand organisations continue to exist.
"In 2012, the gap between IT managers and non-IT managers' perceptions of project success rates, accountability, and the pivotal role IT plays in business strategy showed signs of becoming a crevasse," says Louise Francis, senior market analyst, IDC New Zealand.
"The growing complexity of IT projects and the fusion of IT strategy with business strategy will require IT managers to cultivate strong executive support and better consultation with line-of-business sponsors at all stages of the project from identification through to post-implementation testing. Senior-level support and sponsorship is essential to enabling IT project success, and this support needs to be loud and clear to the whole of the organisation."
The survey, completed in December 2012, had 182 respondents, of which 51percent had some level of input in their organisation's business strategy, and over a third had at least moderate input. The survey polled participants on their experiences with IT projects from both decision makers and end-user viewpoints.
Despite an upturn in some areas, the study found that in several occasions the gap has widened between IT and non-IT management.
In the latest survey, while IDC is seeing much greater inclusion of IT managers within the business strategy development process, some large organisations are demoting or disestablishing rather than reinforcing the role of the CIO in the organisation.
IDC says the inclusion and input of IT managers in organisational strategy development dropped in 2012 with only 34 percent of IT managers believing they have good to significant input in the development of the organisation business strategy; and 20 percent reported that they have no input, a significant rise from 13 percent in 2011.
The report states that often, the focus for projects is on perfect alignment with technical specifications rather than usability of the end product or service and the underlying needs of the end user, and this rigid approach underlines a common Achilles' heel in IT project teams — a failure to understand how the projects fit into the big picture in terms of organisational strategy.
Other factors leading to this flaw inherent in many IT projects include:
- Resistance through incompatible or hostile organisational culture
- IT project team or external provider is underskilled in business processes or strategy. Often there is a lack of training on how to engage with the business
- Inexperience of stakeholders with respect to IT projects and therefore an inability to articulate the needs they wish the deliverables should provide
- Increasing number of stakeholders but a lack of effective collaboration
- A lack of executive support and accountability
- Empowered end users challenging the traditional IT project model from one focused on provision to one of cooperative delivery.
Business and IT misalignment limiting New Zealand organisations’ potential: IDC
The report says one way to overcome some of these issues is having projects teams place more emphasis on early planning and evaluation stages.
Project failures have been attributed to the following crucial elements:
- Ambiguous expectation of needs or project results that has led to a lack of clearly defined and mutually agreed upon success factors.
- Insufficient prioritisation and selection procedures primarily due to the inflexibility of requiring IT managers to commit to a deadline for budget approvals.
- Scarce transparency beyond the IT management who often undervalue the weight of defining risk factors.
- Insufficient non-IT executive involvement in governance making it difficult for stakeholders to measure project successes.
- Lack of a defined system for acquiring and evaluating end-user satisfaction, which happens to be the bottom line success in IT projects. No understanding of end-user attitudes leads to repetition of past errors.
Scott Groombridge, founder of Getting IT Right, says the long-term consequences of not addressing these mismatches are “absolutely massive”.
“We have evaluated this and very conservatively estimated it is costing $1.5 billion every year,” he says.
The bigger impact, however, is on “opportunity cost”, he adds.
“What would NZ look like if our projects were highly successful? These losses would then turn to profits and really kick the economy along, let alone the name it would give us in the global market. I can’t believe our leaders don’t make this happen and the answers are available.”
“While companies states they have strategic plans, I see little evidence that IT work is truly aligned with the strategic (or annual) plan and more importantly, held accountable to achieving their part of that plan.
“When it is aligned, the project has a lot of focus, but when it is not aligned then it can easily be derailed due to cultural and environmental impacts,” says Groombridge.
Groombridge lists two possible steps enterprises can take. First is to report the cultural and environmental effects along with the standard project reporting pack, and to survey the staff on these problems.
“They know a lot and often aren’t asked,” says Groombridge.
IDC, meanwhile, says businesses can overcome these obstacles by developing strong executive involvement and sponsorship of projects.
As to whether or not organisations should have IT managers in the executive level to better address the issue, Louise Francis of IDC says, “IDC has found that the greater the inclusion of IT managers at the senior executive level, the greater the odds of IT project success, particularly transformational projects. One of the biggest contributors to project success is executive support and this place to get this through being an integral member of the leadership team.
This way the IT manager or CIO will have direct, timely access to the strongest influencers of project success, and it sends a clear message to the rest of the organisation that the IT manager has the authority to push through project objectives. Sitting at the senior executive table will also enable the IT manager to identify business problems that can be solved by technology at a much earlier stage and the IT manager can implement an early filter to weed out projects that are unfeasible or do not meet company objectives, reducing the risk of taking on projects doomed to failure.”
Another guidance by IDC is to train people to enhance skills and counter IT knowledge leakage.
But finding suitable people is another challenge in the current environment. “The IDC survey has shown that project management skills, particularly around emerging technologies, is one of the hardest areas for IT managers to recruit in and this is a global issue in IT,” says Francis.
In a CIO survey that IDC conducted in May 2012, the biggest problem occurs in mid-range companies with a fifth of the respondents in companies that have 100 to 499 employees ranked find IT talent as the biggest concern for 2013; compared to a tenth of small and large businesses.”
Francis says one of the biggest issues with this shortage is the cost of hiring the best IT project management talent. “So identifying high-potential employees and training them will be the only option for many organisations. This can also have the follow on benefit of leveraging the employees existing knowledge about the company vision, strategies and culture. It can also avoid the cost and time associated with induction processes and getting a new employee up to speed quickly for projects.”
The author is a freelance writer and social media specialist. She has been writing about business technology for more than 10 years.
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.