CIO analysis: Defining IT project 'success' and 'failure'

Difficulty defining IT success is one reason that failure statistics are all over the map. For example, when I compiled CRM failure stats from various sources, for 2001 to 2009, the numbers ranged from 18 percent to 70 percent.

The most simplistic definition of project success and failure views looks merely schedule and budget - projects delivered on time and within planned costs are deemed successful. However, this definition ignores value, making it a convenient, although incomplete and misleading, indicator of genuine project success.

For example, consider a project where scope changes because stakeholders agree additional value is possible through incremental increases in cost and time. From a strict control perspective, such a project might be called failure, despite substantial benefit to the line of business. Conversely, IT may believe an on-time project to be successful, despite line of business perception that little value was actually delivered.

It's time to develop a more refined and nuanced view of success and failure, emphasizing delivered business value in addition to traditional measures of project management process.

The Strategic Project Office, a book written by J. Kent Crawford, broadens the success criteria specifically to address alignment between project goals, business requirements, and outcomes. In other words, the book describes performance measures that link time, cost, and value to actual results.

Here is the list of performance measures described in the book:

• The organization's strategies are executed according to plan.
• The organization's shareholders are satisfied.
• The organization is financially successful.
• Projects are completed on schedule and on budget.
• Project customers are satisfied.
• Project resources are allocated optimally.
• Projects are aligned to the organization's business strategy.
• The organization works on the right projects.

Definitions are important only as references points, guiding us toward a more complete understanding of the conditions that drive successful (or failed) projects. Simplistic notions of project success do not serve genuine business needs.

Far better to abandon such definitions in favor of an adaptive view that recognizes the interplay of all the performance measures listed above.

Advice for enterprise buyers: Achieving this goal requires IT and lines of business to acknowledge mutual interdependence and respect. This transformational challenge is precisely what's needed to create successful business projects of any kind, including those that involve technology.

By working together, CIOs and CFOs can build a template of mutual respect and cooperation for both IT and lines of business to emulate. This level of cooperation can form the basis for successful projects that meet the performance measures listed earlier.