You can’t win the race by standing still. Professional services firms need to innovate constantly to stay ahead of their competition. Unfortunately, the sector isn’t immune from bad decision-making and, too often, the best intentions of project managers turn into career-limiting IT disasters.
The risk of failure is surprisingly high. ‘From my experience, 20 percent of projects fail, and 40-50 percent have a cost overrun, time overrun or don’t meet requirements,’ says Ralf Dreischmeier, the global head of Boston Consulting Group’s IT practice. ‘Only a third could be described as good projects.’
Here’s a rundown of the top reasons why professional services IT transformation projects go wrong.
Generally, professional services projects tend have a short lifecycle. Most run for between one and three months with a small few exceeding six months. This short time span, however, seems to lull project managers into a false sense of security.
Apparently simple projects like replacing your CRM look straightforward, so it’s not the end of the world if you fail, right? Wrong. On average, three out of four CRM projects fail, and considering that profit margins in the professional services sector are typically slim, one failed project can wipe you out.
Expecting the earth
Big data is a big deal in the professional services market. The amount of data you can collect on you customers today is almost bottomless. While that’s a wonderful thing, it also sets high expectations.
Firms start big data analytics projects because they are tempted by the promise of all-knowing insight. The reality, however, is often less game-changing. The software itself won’t provide all the answers and firms often don’t realise the need for business change to collect, analyse and use the data.
Buying software and expecting it to work without any further effort is like buying a book and not reading it.
More than half of professional services IT projects fail due to poorly defined requirements. You will never hit the bullseye if you don’t set up a target; it’s as simple as that. Yet still unclear requirements is one of the main reasons for failed IT projects, according to The Chartered Institute for IT.
Take, for example, the legal dispute that raged between Waste Management and SAP back in 2008. SAP filed a counter-suit against Waste Management claiming that the company failed ‘to timely and accurately define its business requirements’. Not only did this project fail, but the legal battle also went on for two years ending in an undisclosed settlement from SAP.
Don’t set your IT transformation projects up to fail
Managing an IT project isn’t easy and almost every project will comes with its own array of challenges. While you can’t stop them all, you can definitely reduce the risk of failure by fully understanding what you’re taking on, setting reasonable and achievable expectations and outlining your business requirements at the start.
After all, fail to prepare and you prepare to fail.