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Cutting complexity in tech transformations

Pankaj Chitkara | June 12, 2014
There may be no better-known adage about IT than this: more IT programs fail than succeed. Although technology projects begin with good intentions they're often late, over budget, and haven't provided what is required.

There may be no better-known adage about IT than this: more IT programs fail than succeed. Although technology projects begin with good intentions — often to change the way a business operates — they often end up in a situation that is all too familiar; they're late, over budget, and haven't provided what is required.

The history of corporate IT is riddled with such programs and while there are many reasons for the failures, a potential root cause may lie deeper in the amount of complexity that often creeps into an IT system and overall transformation program.

All too often, IT and business embark on a multi-year project with specific goals in mind — enhance existing processes, replace an existing legacy system or develop something truly innovative to support new business models.

Over time however, as details become more tangible, people begin to rethink their initial assumptions, and the original goals become muddied with many issues.

Stakeholders start demanding different requirements to fulfill their own needs. Soon the temptation to develop solutions to keep everyone happy becomes too strong to resist that the program's ensuing complexity overcomes it.

Some companies have learned this the hard way. A few years ago, when a financial services firm decided to replace its core registry platform, the IT department became so overwhelmed with trying to meet the requirements of all stakeholders, that it lost track of its end goal.

It didn't matter whether the requirements were necessary or just 'nice to have', they began to stack up quickly, increasing the complexity of the project and the new system. In the end, the business got so frustrated with unmet expectations that it cut the program.

Another common pitfall that leads to increased complexity within programs is lack of governance. Harvard Business Review blog [[xref: http://blogs.hbr.org/2014/05/the-it-project-that-brought-a-bank-to-its-knees| rightly said that when it comes to transformation initiatives, many end up being managed as IT projects, with responsibility bestowed to the CIO. To be sure, every transformation program must ultimately be led by the business. But on its own, the business is rarely aware of the impact and change each requirement may have, particularly on an IT system.

As requirements change and grow, so does the complexity of the system and the total cost of ownership.

One large retailer in the US started a $1.4 billion program to modernise its IT systems. A year later, it abandoned the program because it realised that the new system was so highly customised that maintenance became prohibitively expensive.

Another shortcoming that often leads to an unnecessarily complex solution is when organisations with long-standing legacy systems try to embed existing ways of working into new systems.

 

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