CIO 001 A Legacy of Failure Created by James on 6/13/2013 2:59:33 PM
The Financial Mail reported on 28 March 2003 that "it is estimated that as many as 19 out of 20 enterprise resource planning implementations do not deliver what is promised".
For over a decade the indications have been that over seventy percent of information technology investments fail to deliver anything whatsoever and that a further twenty percent fail materially to meet the business requirement stipulated when the investment was approved.
If comparable failure rates were experienced in other industries it is debatable whether we would use motor vehicles, travel over bridges or occupy multi-story buildings.
There are many factors behind the high failure rate of information technology investments which can be summed up by the statement "information technology investments fail because they are not designed not to fail". Engineers do not design bridges to stand up, they design them not to fall down. The challenge for information technology is to start designing solutions that do not "fall down".
What is required to achieve an industry which delivers a high level of business outcome reliability?
I have recently written a book on some of the requirements and would like to suggest the following:
1. Insist on design against failure rather than design for success, introduce engineering disciplines including changes in tertiary education content.
2. Introduce statutory professional accreditation and registration which includes professional liability of certified professionals, vendors and service providers for sub-optimal outcomes.
3. Develop clear models that allocate accountability for business outcome to business executives and accountability for technical outcome to technologists.
4. Recognise that the business utilisation of information technology has nothing to do with technology, it is about people and business and how they utilise technology to deliver business value.
5. Demystify information technology - cease allocating human characteristics and business outcomes to information technology and reduce it to what it really is, sophisticated algorithms that run on high speed adding machines. These cannot deliver real business value unless effectively utilised by human beings in the context of the fundamental objectives of the organisation utilising the tool.
6. Recognise the critical requirement for clear definition of business strategy in order to define long term information system requirements and specifications. This includes recognising that the capability of business to respond to unplanned, reactive change is extremely limited, long term planning is essential.
7. Recognise that the real cost of meeting the above requirements will result in accurate cost and time estimates for many information technology investments increasing considerably and that many proposed investments are simply not viable.
In considering these points it is important to recognise that sub-optimal outcomes of major business information systems can damage or destroy large and successful corporations. Poor system performance that detriments customer service levels will almost certainly result in customers taking their business elsewhere.
By way of example, some time ago I was asked to evaluate a major brand name enterprise resource planning investment that was not performing and for which there were indications that customers were starting to take business elsewhere. Initial investigation determined that a key part of the organisations competitive position related to a commitment to customers that orders placed by a certain time would be fulfilled by a certain time the following day. The manner in which the new E.R.P. system had been implemented was preventing this commitment from being met.
Customers were dissatisfied and after a number of months of live operation deliveries were still not taking place within the promised time frame. Eventually the implementation was aborted and the organisation returned to the software it had been using previously.
Failure to design the entire implementation around the organisations fundamental business differentiator caused damage to the business and resulted in a multi-million rand investment over nearly two years, which caused substantial disruption to the business, being aborted.
This is one example of many where failure to understand the core strategic drivers and differentiators of the business and to design against failure have given rise to complete information technology investment failure.
The challenge today for business executives and information technology practitioners, service providers and vendors is to confront the reality of endemic failure and take measures to actively change the way things are done in the industry in order to deliver reliable and successful business outcomes on a consistent basis.
Many of the issues require business to take a different approach in terms of demanding successful outcomes and holding parties to failure to account.
A far more robust investment value proposition and plan for value delivery is an inherent requirement.
Effectively applied business information systems can offer considerable value to business.
It is time to unlock this value and this represents a serious challenge to every person who accepts the designation of "Chief Information Officer".
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