Understanding
Information
Technology System
Project Failure
By: Michael Bury
MIS
4-22-10
Abstract
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Over the last 20 years failure has become
synonymous with Information Systems (IS) Projects.
This research is aimed to understand the reasons
for IS project failure.
IS project failure does not occur in any single
industry and can happen anywhere at anytime.
IS Failure is not caused by just tech failures but
organizational and functional problems in a
business.
20 Critical Success Factors (CSF) are introduced
that are vital to the success of a project.
Introduction
 Case
Studies chosen from the last fifteen
years from Ireland, UK, and USA will act as
examples to show that IS project failure
can occur anywhere and anytime.
 Four case studies of Information System
development are analyzed (Taurus,
DIABHS, ISIS, and NATS)
Information System (IS)
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Serves to coordinate the work of different
organizational functions and is the core of
any business.
Aims to increase efficiency and effectiveness
of business practices.
Implementation of an IS involves the design,
delivery, and use of the software systems in
the organization.
Information Technology (IT) is the enabling
tool that powers the IS. IT is used by IS.
Defining an Information
System
 The
authors Definition:
“An Information system is composed of
software, hardware, communication
systems, and people. It is a critical
investment for organizational survival. It
increases the efficiency and effectiveness
of daily business by integration
organizational processes and structures”
Critical Factors for Project Success
Baker et. al.
(1983)
- Clear Statement of
Requirements
- Proper Planning
- Competent Staff
- Clear Vision and
Objectives
- Hard Working Staff
- Leadership
- Resources and
Funding
- Low start-up
Difficulties
- No Politics
Morris and Hough
(1987)
- Clear Statement of
Requirements
- Proper Planning
- Competent Staff
- Resources and Funding
- Low start-up Difficulties
- No Politics
Pinto and Slevin
(1989)
- User Involvement
- Executive mgt.
Support
- Competent Staff
- Hard Working Staff
- On time, under
budget
- Satisfies owners
needs
- Leadership
- Teamwork
- No Politics
Turner, J.R.
(1993)
- User Involvement
- Executive mgt.
Support
- Competent Staff
- On time, under
budget
- Satisfies owners needs
- Teamwork
- No Politics
CHOAS REPORT
(1994)
Wateridge, J.
(1995)
Whitaker, B.
(1999)
Boehm, B.
(2002)
- User Involvement
- Executive mgt.
Support
- Clear Requirements
- Proper Planning
- Realistic Expectations
- Smaller Milestones
- Competent Staff
- Ownership
- Clear Vis. & Obj.
- Hard Working Staff
- Project achieved
purpose
- Satisfactory benefit to
owner
- Satisfied needs to
owner
- Meets pre-stated
objectives
- On time, under budget
- Satisfied project team
needs
- Good Project
Planning
- Strong Bus. Case
- Tom mgt. Support
- Schedule time
keeping
- Within Budget
- Good Estimates
- Strong
requirements
- Ability to meet req.
- Complete
requirements
- User Involvement
- Resources
- Realistic Expectations
- Executive Support
- No scope extension
Analysis of CSF
 Most
occurring qualities of Successful
systems:
-On time, under budget.
-Project Delivers its functionality.
-Clear Vision & Objectives
-Executive Management Support
Understanding IS Project
Failure
 70%
of large-scale IS investment fail.
 Project must meet a number of objectives
and goals.
 Important parameters to meet will be:
-Return on Investment
-Profitability
-Competition
-Market Ability
Defining Project Failure
 Author
believes in a degree of failure.
Category of Failure
1.
2.
3.
4.
Correspondence Failure
Process Failure
Interaction Failure
Expectation Failure
Description of Failure
-The IS fails to meet it’s designated objectives.
-The IS overruns it’s budget or time constraints
-The users maintain low or non-interaction with the
IS
-The IS does not meet stakeholders expectations.
LEVEL OF FAILURE
LEVEL ONE
(MINOR)
-
Profitability
Poor Estimates
Unproven Tech.
Lack of Res.
Lack of Features
Lack of Usability
Lack of Project
organization
Transparency in IS
Project
Progress Meetings
LEVEL TWO
(MAJOR)
-
Goals not all achieved
Complex Solutions
Lack of Planning
Lack of User
Involvement
Lack of Resources
Lack of Commitment
Unrealistic Expectations
Lack of Executive
Support
Changing requirements
and specifications
Schedule overrun
Budget overrun
Poor leadership and
management
Debugging incomplete
Lack of ownership
Too many vested
interests
LEVEL THREE
(CRITICAL
-
Scrapped Before
Completion
Vendor’s Inability to
meet requirements
Client consultation
during development
stage.
Levels of Failure
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Level one is considered minor. Final IS project
does still meet its objectives and is
completed.
Level two failure is major. IS project does not
meet all requirements and will not be
achieved within budget and one time.
Level three is critical failure. IS project odes
not meet any of its requirements and
objectives. Most likely to be scrapped after
running over time and budget.
Case Studies
 Two
of the four case studies resulted in
failure (Taurus and ISIS)
 Two cases succeeded (DIABHS and NATS)
Taurus
 Develop
an automated transaction
settlement system for the London Stock
Exchange.
 Electronics submission would enable the
securities Industry to eliminate paper
transactions.
 Project began in 1998.
 Aim to create a simple system for large
investment houses.
Design and Implementation
 An
18-month time frame was demanded
for completion.
 Involvement of new and untested
technology and project complexity made
this deadline nearly impossible.
 The Design Stage initially scheduled for
two months lasted two years.
 Lack of Leadership and the spread of
ownership steered project toward failure.
Design and Implementation
(Continued)
 Decision
was made to use off-the-shelf
software to speed up development cycle.
 The software was nearly 20 years old.
 The use of state of the art technology and
software on hardware that was twenty
years old was illogical.
 Project team believed that building the
outward part of the system first would
make interested parties happy.
Outcome
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Original budget = £6 Million
Ending budget = £800
Main factors due to failure of project were
identified as power, politics, and responsibility.
The persistence to deny failure dragged the
project on and is identified as a socio-economic
problem rather than technological.
Lack of Leadership and Management had
detrimental effect on the project/project team.
Taurus project was labeled a project 3 failure
because the majority of the CSF were not
achieved.