What This Article Covers
- Background on the Measurement of the Success of IT Projects
- How This Relates to the Purchase of Major Brands in Software and Consulting
- Do Implementing Companies Want their Projects Evaluated for Success?
Background on Enterprise Risk Management and Performance Management
One of the most interesting results of evaluating the success metrics that are applied to enterprise software projects post go live is that the only success metrics turn out to be related to hitting project management goals — that is the success metrics are not tied to actual performance of the system.
“I say “may,” because the research is clear that companies often have no way of validating whether their project was a success because they have no formal measurements in place. The following quotation from research into the project success determination explains this fact – and a fact, which is frequently and easily glossed over when failure statistics are quoted, quite well. “According to Parr and Shanks (2000) “ERP project success simply means bringing the project in on time and on budget.” So, most ERP projects start with a basic management drive to target faster implementation and a more cost-effective project… Summarizing, the project may seem successful if the time/budget constraints have been met, but the system may still be an overall failure or vice versa. So these conventional measures of project success are only partial and possibly misleading measures when taken in isolation (Shenhar and Levy, 1997)” ” – Measures of Success in Project Implementing Enterprise Resource Planning
This quotation is only one example – all of the research in the area of success measurement for IT projects points in the same direction.
How Enterprise Risk Management Relates to the Purchase of Major Enterprise Software and Consulting Brands
Because companies do not measure the success of their projects, they will frequently simply purchase software and services from major brands. The logic is the following:
“We purchased software from SAP, and we chose our consulting partner as Accenture – therefore what could go wrong.”
It turns out a lot can go wrong. At our companion site Software Decisions, we add a larger multiple for implementation cost because software, which is implemented by a major consulting company, will in every instance that we have analyzed, cost more and take longer to implement than if no major software company is involved. This is why the implementation durations of best of breed applications is so much faster – they are not brought in by major consulting companies and are no obligated to hand their consulting over to them or to accept the consulting company’s “methodology,” which is not a methodology, but a method, and is centered around maximizing the billing hours that are pulled from the client.
Do Implementing Companies Want their Projects Evaluated for Success?
The research shows that companies don’t perform enterprise risk management and don’t know if their projects are a success. At first blush the answer might seem to be “absolutely.” However, do the executives actually want to find out? If you are an executive at a company and have made a purchase decision, clearly, you want the project deemed a success. If you actually measure for success, you may find out it is not actually a success in that the system does not provide the quality of output expected, and or it does not improve the company’s condition beyond the system that was replaced. So what do companies do? Well they essentially measure success based upon whether the project met its implementation deadlines. As stated in the SCM Focus Press book Enterprise Software TCO: Calculating and Using Total Cost of Ownership for Decision Making.
“It is in fact quite easy to bring up an application so that it is “live.” All that has to be done is client specific master data setup, integration performed to other systems and a generic configuration used. I refer to this as an IT implementation – the system is working and all the server lights are blinking. Implementing the software in a way that adds significant value is the actual goal not simply hitting a deadline. However, in multiple studies it has been found that companies have no other way of objectively determining project success beyond the meeting of project deadlines.”
Lets us an analogy which everyone can related to. If we look at the wars in Iraq and Afghanistan, were they a success? The bill for this wars is estimated to be roughly $6 trillion.
“The decade-long American wars in Afghanistan and Iraq would end up costing as much as $6 trillion, the equivalent of $75,000 for every American household, calculates the prestigious Harvard University’s Kennedy School of Government.
“The Iraq and Afghanistan conflicts, taken together, will be the most expensive wars in US history—totaling somewhere between $4 trillion and $6 trillion. This includes long-term medical care and disability compensation for service members, veterans and families, military replenishment and social and economic costs. The largest portion of that bill is yet to be paid.”- Global Research
There were great sacrifices on the parts of Americans — both in terms of those that funded it, and those that fought in these wars. Lets remove from the equation any innocent Iraqis and Afghanis who were injured or killed and the loss of their national independence — or the final impact of these wars on their future. Rather, let us restrict the analysis of the wars as to whether these wars were a success or failure for the US. How does on determine if these wars were a success?
- Is it defeating the militaries of these countries?
- Is it the elimination or reduction of terrorism?
- Is it the possession of the natural resources of these countries?
- Is it the long term political control of these countries?
- Is it whether both countries begin to operate as great democracies?
There is a strong tendency to declare the wars a success because of the sacrifice rather than the benefit — however that for obvious reasons can never be a correct measurement. The question that should be asked is not were there sacrifices made — but were the sacrifices worth the cost?
Of the $4 to 6 trillion spent, were there other things that could have been done to help the US meet its objectives? As with IT implementations, the output of initiatives seems quite frequently to be analyzed. It also brings up the question of, if the analysis is performed and the initiative was a poor investment of resources, does anyone want to know?
The repetitive purchase of products from major monopoly vendors like Oracle and SAP that have the highest total cost of ownership (TCO) along with the lowest performing functionality when compared to best of breed applications. This is what passes for This allows companies to declare IT projects a success – not based upon any evidence, but based upon the use of name brands. They do not practice enterprise risk management by analyzing the enterprise risk before the implementation — including it in their software selection. This means that there is little impetus to choose the best solutions, to actually perform thorough software selections, or to measure the results of IT implementations.
Shahin, Dezdar. Sulaiman, Ainin. Measures of Success in Project Implementing Enterprise Resource Planning. International Journal of Business Performance Management, Jan 1 2011
Iraq and Afghanistan War Cost