Tuesday, March 25, 2014

A Managerial Blind Spot

The healthcare.gov web page fiasco calls attention to a persistent management problem; namely, the frequency with which IT projects fail.

Anyone wishing to pursue the matter can simply Google up “IT project failure.”   One reference it produces quotes a study by the McKinsey consulting company reporting that “On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted.”  A survey by KPMG consultants in New Zealand found that “….70% of organizations have suffered at least one project failure in the prior 12 months.”

A variety of reasons are given to explain this pattern of chronic failure.  All undoubtedly have some merit.  My own view is that it is attributable mainly to inadequate management - what I call a managerial blind spot.

Complex projects (and all IT projects are complex) can be greatly affected by detail.  An analogy would be that of adding a foot to the width of a bathroom while a house is under construction.  Doing that might seem like a small thing but because of its potential effects on everything else it could easily cause a major increase in cost and a delay in completion.

 In the case of healthcare.gov, it is reported that there was a question as to whether anyone would be allowed to go on the website and see the coverage options available and the cost of each.  Massachusetts had done that and the federal programmers were following the Massachusetts example.  Late in the planning process, someone decided that was not a good approach and that people should first have to learn whether they were eligible for subsidies.  Implementing that decision required that a lot of the programs be rewritten.

The point here is that if IT projects are to be successful, the end product must be clearly defined in advance and any issues involved it achieving it must be resolved.    Contemporary managers are not particularly good at that.  They like to think of themselves as “big picture” people who delegate what they see as small stuff to others.  But in complex projects, what seems to be small stuff, like widening a bathroom, is behind many of the failures.   Also, managers are often reluctant to deal with the friction associated with resolving differences and so Issues get kicked down the road.  The result is delay, cost overrun, and a failure to achieve the desired result..

Obama took a lot of heat for the debacle, and appropriately so.  But he doesn’t have to feel particularly lonesome in his misery.

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