In todays complicated market some skills are still hard to come by. Especially when it comes to implementing Enterprise Resource Planning (ERP) systems that are on time and within budget. So the question that needs to be asked, is skill in implementing coordinated information technology really a competitive advantage for a firm? I believe that it can truly be a competitive advantage for a firm.
The top three reasons for the failure of IT related projects, as cited by IT managers, were poor planning or poor management (cited by 77%), change in business goals during the project (75%), and lack of business management support (73%). As a result, most IT-related projects fall far short of their potential payback, and 26% are canceled before completion. Moreover, in many of the completed projects, the technology is deployed in a vacuum and users resist it (Elisabeth J. Umble, 2003).
Furthermore, in a survey of 1,500 change management executives, only 40% of projects met schedule, budget and quality goals. Moreover, 41 percent of projects were considered successful in meeting project objectives within planned time, budget and quality constraints, compared to the remaining 59 percent of projects which missed at least one objective or failed entirely (Hans Henrik Jørgensen, 2008).
Moreover, if that is not enough bad news for you about how difficult it can be to have a successful IT project let me throw some more facts at you. A study of 5,400 large scale IT projects conducted by McKinsey & Company in conjunction with the University of Oxford, found that 17 percent of large IT projects go so badly that they can threaten the very existence of the company. In addition, they also found that on average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted (Michael Bloch, 2012 ).
Additionally, what I find most shocking is that in interviews with 600 people closely involved in software development projects finds that even at the start of a project many people expect their projects to fail! With some of the reasons given being “Fuzzy business objectives, out-of-sync stakeholders, and excessive rework”, mean that 75% of project participants lack confidence that their projects will succeed. Furthermore, a truly stunning 78% of respondents reported that the “Business is usually or always out of sync with project requirements” (Slama, 2011).
Lastly, just to add impact to the point I am trying to make, in a survey of 600 organizations globally conducted in 2005. In a 12 month period, 49% of organizations had suffered a recent project failure and in the same period only 2% of organizations reported that all of their projects achieved the desired benefits. Finely I must point out that many organizations fail to measure benefits so they are unaware of their true status in terms of benefits realization (Global IT Project Managment Survey, 2014).
So now that you see how difficult it is for a normal IT project to succeed just imagine how difficult it must be for an ERP implementation to succeed. Successful project impanation is difficult to begin with, it is even more difficult when you are trying to move a whole organization to a new all-encompassing system that is going to replace all their legacy system and allow them to communicate data between business sections in a way that just was not passable before.
Project management is not new, and many of the skills are tried and true. In fact, it has been shown, that in organizations that are skilled in implementing coordinated information technology are 10 times more successful at achieving the stated goal of the project than other organizations (Hans Henrik Jørgensen, 2008). Secondly, it was discovered that organizations that were considered to be skilled in implementing coordinated information technology constantly displayed the top five factors found in successful projects. These being user involvement, executive management support, clear statement of requirements, proper planning, and lastly the most important one realistic expectations. If these five factors are done well, a project, according to the Standish Group, will have a much higher probability of success (Robert Frese, 2003).
With all this being said, dose skill in implementing coordinated information technology really a competitive advantage for a firm? This is a most definitely yes as a skilled organization will have a higher percentage of success on implementation of IT systems than an organization that is not as skilled. Furthermore having a higher success rate than your competitors naturally translates into more business for your organization. This is because the penalty for a failed IT project can be so great that organizations will seek out the most qualified company to ensure project success.
Works Cited
Elisabeth J. Umble, R. R. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146 , 241 – 257.
Global IT Project Managment Survey. (2014, 02 28). Retrieved from KPMG: http://www.kpmg.com.au/Portals/0/irmpmqa-global-it-pm-survey2005.pdf
Hans Henrik Jørgensen, L. O. (2008). Making Change Work. Somers, NY: IBM.
Michael Bloch, S. B. (2012 , 10 01). Delivering large-scale IT projects on time, on budget, and on value. Retrieved from McKinsey & Company: http://www.mckinsey.com/insights/business_technology/delivering_large-scale_it_projects_on_time_on_budget_and_on_value
Robert Frese. (2003, 12 16). PROJECT SUCCESS AND FAILURE: WHAT IS SUCCESS, WHAT IS FAILURE, AND HOW CAN YOU IMPROVE YOUR ODDS FOR SUCCESS? Retrieved from University of Missouri-St.Louis: http://www.umsl.edu/~sauterv/analysis/6840_f03_papers/frese/
Slama, P. (2011, 03 16). Up to 75% of Business and IT Executives Anticipate Their Software Projects Will Fail – See more at: http://www.geneca.com/blog/75-business-executives-anticipate-software-projects-fail/index.html#sthash.xdTsm9DC.dpuf. Retrieved from Geneca: http://www.geneca.com/blog/75-business-executives-anticipate-software-projects-fail/index.html
