Kiwibank recently announced a $90 million write off in the value of their information-technology project, CoreMod.[i] According to their Chief Executive Paul Brock, the project to replace its banking system with software provided by Germany’s SAP has been put on hold, while a strategic review is underway to “look at a number of options for how best to deliver a digital future for the bank” and its customers.
Although this project hasn’t gone well for Kiwibank, research shows they aren’t alone. In 2012 McKinsey & Company in conjunction with the University of Oxford, conducted a study on large scale IT Projects. The study found that, on average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted. Worse still, the study reported 17 percent of large IT projects go so badly that they can threaten the very existence of the company.[ii]
So, what can companies do to help ensure their IT projects are viable?
- Start by investing in an FDD (Feature-driven development) workshop
Here at ClearPoint, we hold joint FDD sessions with our clients before kicking off any project.
Led by our software management specialists, these sessions are designed with a best practice agile/LEAN sprint lens and help us ascertain project scale, scope, cost and analyse external dependencies and risks. We examine user experience insights and proof of concept – information which our clients usually compile prior to getting around the table.
Our FDD sessions are invaluable in determining whether a proposed IT project is viable and will deliver the outcomes our clients are looking for in terms of business objectives, goals and metrics.
Sometimes these sessions have resulted in us advising clients not to proceed with development. While no one likes to hear their concept or idea isn’t going to become a reality, we’d rather be honest and upfront about it than waste time and resources on projects which won’t deliver value or longevity.
- Be brave enough to hit the brakes
Over the years we’ve helped clients who have come to us because they’re struggling to execute a project, or need to rethink their approach. We applaud these clients for having the bravery to pause and determine where to next.
If you feel an IT project is poorly conceived, isn’t on track to deliver your digital and business strategy, or is not being executed well – challenge it as early as possible. Companies who have successful IT teams support a culture of learning where people are encouraged to raise red flags at any stage of the project.
- We’ll tell you if it’s viable
We have a proven track record of designing and building software solutions for large global companies which are successful and deliver ROI.
Before you invest in your next IT project, get in touch and let our experts help determine if it’s viable. A conversation now could save you a lot of pain in the future.
Martin Bridges is Head of Build at ClearPoint and is passionate about ensuring successful project delivery. If you’d like to chat with Martin about your next IT project, fire him an email at email@example.com or call us on +64 9 373 4626.
[i] https://www.stuff.co.nz/business/industries/96406067 Kiwibank rethinks IT project after $90m write-off, TOM PULLAR-STRECKER, September 2017
[ii] https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/delivering-large-scale-it-projects-on-time-on-budget-and-on-value, October 2012