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  • Writer's pictureRüdiger W. Schwarz

How to identify useless IT projects?

You doubt? Yes, of course they exist. We have created a small checklist for you below, whether something like this is slumbering in your company. We will be happy to support you in taking the right measures to correct it.

2023 Hand stoppt nutzloses Projekt +Benefit Group Blog (AdobeStock_402968371)

“Most large investments come late and over budget, falling short of expectations. More than 70% of new manufacturing facilities in North America close within the first 10 years. About three quarters of mergers and acquisitions never pay off. And many efforts to enter new markets fare no better,” noted Lovallo and Kahneman in the Harvard Business Review [1]. At the same time, they found in their surveys that managers suffer from delusional optimism: They overemphasize potential benefits, underestimate the costs to be expected and ignore the possibility of mistakes and unexpected events.

But it would be wrong to simply blame the failure of many IT projects on the decision-makers in management. The side of those presenting costs and benefits to the CEO or CIO does not act more honorably: "Planned, systematic and deliberate misstatements of costs and benefits in order to get projects approved" or in short lying is the order of the day states Bent Flyvbjerg, Professor in Oxford based on projects to improve the transport infrastructure [2].


But do you want that to happen to you, too? Better not. So how can such lies be uncovered in good time and useless IT projects avoided or canceled in good time?

We have created a small checklist for useless IT projects for you, which we use in the course of our consulting projects in order to find and implement software that is optimal in terms of costs and benefits and to achieve the return on-invest (ROI).


Check 1: Is the project (still) economical?

First, the question about the business case will help you. Some companies don't do that, but instead start without a justified investment application and embezzle the department budget for preliminary studies and submarine projects. Instead of a business case, only cost comparison calculations are often wrongly carried out, which compare the technical alternatives with numerous criteria, but simply equate their benefits. That would be like assuming the same benefit for a Smart and an S-Class Mercedes. As the person responsible, always request the calculation of all costs (TCO) and resulting benefits, evaluated in €, over the planned useful life in order to calculate the ROI before, during and after the project. Your business case should carefully weigh the costs and benefits of your IT project and produce a feasible solution with the best cost-benefit ratio. And as duration and costs increase, an ROI can fall below 100% and lead to the project being called into question. We can implement your projects with an approach based on methods of active cost- and benefits-management and our knowledge database +Benefit so that it doesn't come to that. Promised.


Check 2: What will (still) change the project scope?

Changes in project scope can have massive impacts, as we all know in Berlin with our late but now great BER airport. An additional data interface, an additional storage location or even deletions change the scope of the deliveries and services to be provided in IT projects as well. This means that changes in the workload, resources and deadlines are the immediate consequence. Therefore, continuous scoping is the most important discipline in IT projects.

In agile projects, stories and kanban boards help to record possible changes early on, evaluate them and, after approval, prioritize them appropriately and implement them iteratively in sprints. This works ideally with suitable tools such as JIRA under the guidance of experienced IT project managers. In fixed-price projects with often change requests (CR), it is better to act with a rolling list of supplies and services, which we are happy to provide you with by e-mail.


Check 3: Do we (still) have the right employees for the project?

In order to be able to carry out IT projects at all, you need an even more important resource in addition to money: Suitable employees. Few dare to wait for the best employees, although this option works for you with good ones preview of the project portfolio or by purchasing external experts. You can easily check this: Is there a requirement profile and a task list for each project member? It is a must-have. Regardless of whether you are looking for project management assistants, SAP Basis administrators or software testers. Resource planning starts with the skill matrix you need. The result is then later a project organization chart that should contain the name and availability of all team members in addition to the role designation and deputy. For example, we have such profiles ready for you for IT projects to introduce WMS warehouse management or TMS transport management software. Feel free to contact for this.


Check 4: Dates: Is the project schedule (still) realistic?

The next factor: time. Once there is the appropriate project start time and then the duration until completion. Are the milestones based on a technically motivated forward calculation of all activities including their dependencies or are deadlines determined by a decision-maker and his personal goals? Who estimated the duration of each phase and each activity? Were durations estimated in a team using the Delphi method or only by a single expert? Which dependencies between sub-projects were considered and why and which activities are on the critical path? Have working and absence times and buffers been realistically and adequately factored in? Therefore, question every milestone and use our web-based free project management platform as part of the projects with +Benefit Group, in order to be able to calculate and visualize not only planned dates, but also the delay in following up on actual dates. That's the only way you'll know where things are really getting stuck.


Check 5: Do we (still) have the commitment of everyone involved?

Whether a project can be successful is decided on the first day when it is born with the project assignment" [3]. However, there are enough projects that are planned and implemented over a long period of time so that the framework conditions can change completely. In addition to technical, commercial, organizational and environmental conditions, it is always people who want to be convinced and taken along. Especially when the people in the steering committee or core team change, it is important to ensure that the objectives, scope, quality, budget, team, deadlines and opportunities and risks are fully supported by them. The project order written at the beginning and the changes that have been decided since then are helpful in order to familiarize the new project participants with these points and to ensure their approval. And don't forget to pick up this commitment again and again in each status appointment.


Contact

So does your IT project still make sense to continue? Fine. If not, a critical appraisal by an external expert could help to continue your project. Let us talk on the phone: We would be happy to support you with our many years of experience from projects for SCM + ERP + TMS + WMS + YMS + MFS.


Yours


Rüdiger W. Schwarz


[1] Dan Lovallo, Daniel Kahneman, “Delusions of Success: How Optimism Undermines Executives' Decisions”, HARVARD BUSINESS REVIEW, July 2003 https://hbr.org/2003/07/delusions-of-success-how -optimism-undermines-executives-decisions

[2] "How (In)accurate Are Demand Forecasts in Public Works Projects? The Case of Transportation," by Bent Flyvbjerg, Mette Skamris Holm, and Søren Buhl, Journal of the American Planning Association, vol. 71, no. 2, Spring 2005. http://flyvbjerg.plan.aau.dk/liewithnumbers.php

[3] Stephen Jenner, “Realising Benefits from Government ICT Investment: A Fool's Errand?”, 2009, Academic Conferences Limited, Reading, U.K.

Picture: 2023 Hand stoppt nutzloses Projekt +Benefit Group Blog (AdobeStock_402968371)






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T: +49 172 3872 373 + Email: mail@benefitgroup.de + Web : www.benefitgroup.de

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