Get with the changing pace to avoid an IT project stuff-up

Can the usual large providers meet the demands of new digital platforms?

Just about everyone who works in a large organisation has experience of IT project failure.

Even people who don’t work directly in IT will be aware of project delays and cost overruns and may themselves have ended up trying to use a computer system that doesn’t do what it is supposed to do or is harder to use than the one it replaced.

Why IT projects so often go wrong is a question posed by Felix Tan, a senior lecturer in the school of information systems and technology management at UNSW Business School, and colleague Christine Van Toorn, in a white paper looking at the role of IT consultancies, which are often responsible for implementing large IT projects on behalf of organisations.

A recent roundtable of several leading C-Level IT executives organised by UNSW Business School – and with the senior management of data science and communications consultancy Andiron and cloud services business Kablamo – explored the challenges companies have when they engage with large enterprise IT consultancies, including poor communication and not having a clear picture of the company’s business goals.

The difficulties have been driven by a shift in what companies are hoping IT projects will deliver. In the past, they were primarily seeking cost savings. As long as the project was able to carry out a similar function to the system it was replacing at a lower cost, then it was judged successful.

However, businesses now look to IT projects to transform their business.

“The proliferation of new digital platforms has fundamentally changed the nature of work and employee expectations with regards to how they collaborate and the tools they use to do their jobs,” say the authors of the white paper, The Rise of the Mammal: How an Evolving Landscape is Challenging the Hegemony of the Large Enterprise IT Provider.

“This, in turn, has led to a shift in how enterprises measure and derive value from their IT investments.”

'It’s this mismatch of expectations that is also a result of not keeping up with the dynamic changing landscape'

FELIX TAN

Effective measurement

The executives in the roundtable said there is now “a gulf between their expectations and the final results of engagements which were designed to modernise and transform their businesses”.

Tan says that, fundamentally, the problem is a communication issue and failure to define the project expectations from the outset.

“Often, that conversation is not well carried out in the sense that there’s a lot of misalignment with what the organisations expect and what the service providers can actually deliver – although they believe that they can deliver a lot of things but in actual fact they may not,” he says.

Another issue is that large IT service providers find it hard to keep up with the rapidly changing IT landscape and can’t meet company executives’ changing demands. 

“It’s about capacity to deliver,” Tan says.

“There’s this misalignment. It’s this mismatch of expectations that is also a result of not keeping up with the dynamic changing landscape.”

Once a project is under way, there is the issue of how to judge its success or otherwise, yet the roundtable found there was a “lack of clearly defined goals and metrics against which to measure the success of an engagement”.

Effective measurement also becomes more difficult as engagements move away from the traditional transactional outsourced models toward increasingly innovative business differentiation projects, the authors say.

On the ground

James Brett, CTO, author and founder of IT consultancy Curiously, says large IT consultancies struggle to be sufficiently adaptable to changing projects.

“The main challenge is not being able to iterate quickly on product development and not having true agile ways of working where we constantly communicate with the customer and have cross-functional, small, expert teams building out future assets,” says Brett, who has been involved in major IT projects on both the corporate side and the consultancy side.

Once businesses move on from wanting cost savings from IT projects to seeking business change and growth, the IT people need to work closely with the business leaders.

“To keep up with the complexity, the uncertainty and the ambiguity of today’s marketplaces, organisations have to deliver their products and services faster and more efficiently on the devices and channels where their customers are at,” he says.

Despite its failings, IT outsourcing is a large part of the economy.

The white paper notes that total Australian commercial IT expenditure is forecast to reach $93 billion in 2019, with more than $34.4 billion of that headed toward IT services. The traditional outsourcing model has had significant commercial success, yet “the reality on the ground tells a much different story”, the authors say.

'There are so many mid to small-sized providers out there that are more nimble and more adaptable'

FELIX TAN

End of the dinosaurs?

All of this raises questions about the future of the large IT consultancies, such as Accenture, IBM and India’s Tech Mahindra.

Cloud computing providers (such as Google Cloud Platform and Amazon Web Services) have provided small consultancies with access to highly scalable, enterprise-grade tools, giving them the ability to develop global scale platforms and products. 

However, small consultancies still struggle to compete with the greater numbers of staff that large consultancies can quickly mobilise for a project, says Brett.

He expects that rather than hiring a large consultancy to deliver a project, organisations will piece together their projects using small, specialised consultancies.

“To get a high quality, cost effective solution, organisations may engage a specialist user-experience consultancy, an AI consultancy, and a cloud specialist. They will work with these leading expert consultancies and bring them together using a high-performance agile delivery process to create far better outcomes,” Brett says.

It could spell the end of what the UNSW white paper refers to as the “dinosaurs”.

“The future is bleak for the dinosaurs. I think they will die,” says Brett.

“I think the new model of boutiques using contemporary cloud-based, enterprise-grade tools and true agile processes is going to be the way to go.” 

However, Tan is not so pessimistic about the continued existence of the large IT consultancies, but he says the prospects are bleak for those that do not recognise that the future is rapidly changing.

“Some will be left behind. Some will be needing that change, and fairly quickly, simply because there are so many mid to small-sized providers out there that are more nimble and more adaptable and able to change fairly quickly and their delivery models are more adaptable,” he notes.

But big organisations are often risk averse, and some will stick with the large IT outsource providers because they are well established and have strong track records, Tan says.