Top Management Support: mantra or necessity?

Raymond Young & Ernest JordanMacquarie University

Overview

• Background – IT Project Failure

• Methodology – Case Study Analysis

• Results

• Discussion

2/3 projects realise no benefits!$1,000 billion pa spent on IT. (Seddon & al 2002)

30% on projects (?)

OK

Som

eN

oF

ail

ROI30%

10-20% (Clegg et al 1997)

30-40% (Willcocks and Margetts 1994)

15% (Standish 1999,2003)

2/3 of projectsdeliver no benefitswhatsoever

• IT project failure has been an issue almost since the dawn of business computing (Caminer 1958).

• It has been studied intensively for the past 40 years (Lucas 1975, Lyytinen and Hirschheim 1987)

• but it remains a poorly understood phenomena (Sauer 1993, 1999).

• An enormous number of largely untested methodologies have been proposed and adopted (Checkland 1981, Strassmann 1995, Clegg et al. 1997).

2/3 projects realise no benefits!

“dimensions thought to be important divide tasks, requirements scrubbing, KISS, reduce scope, simulation/scenarios, prototyping,

pilots, testing, user participation, user surveys, publicising participation results, team meetings, user led teams, user committees and good relationships, user managed

decisions and development, user commitment, monitor progress and promote open discussion, critical task focus, project organisation, external contracts and outsourcing,

formal procedures, cost allocation structures, pre-scheduling, cost and schedule estimation, incremental approach, path-analysis, risk-driven project planning, physical

arrangements, staff with top talent, seek champions, cross training, morale building, manage expectations, implementation games, training, role playing, study and screen

potential actors, specification standards and methods, task and organisational analysis techniques, information hiding/abstraction and modelling, bench marking, flexible governance structures, task matching, contingency models, managing technology options, adapt authority and decision structure, modify process model, technical

analysis, service assessment, gain management support, appropriate leadership, change authority or workflow, adopt/configure new organisational technologies

(Lyytinen, Mathiassen et al)

have no consistent impact on the success of computing”

(Kraemer & King 1986).

2/3 projects realise no benefits!

2/3 projects realise no benefits!

OK

Som

eN

oF

ail

ROI30%

10-20% (Clegg et al 1997)

30-40% (Willcocks and Margetts 1994)

15% (Standish 1999,2003)

2/3 of projectsdeliver no benefitswhatsoever

The traditional wisdom must be revisited

Re-examining the traditional wisdom

Standish (1996)1. User involvement (19) 2. TMS (16) 3. Clear statement of requirements (15)4. Proper planning (11) 5. realistic expectations (10) 6. smaller project milestones (9)7. Competent staff (8) 8. ownership (6)9. clear vision & objectives (3)10. hard working, focussed staff (3)

1. Project methodologies (35)– Clear statement of requirements (15), – Proper planning (11), – smaller project milestones (9)

2. User (25): – User involvement (19), – ownership (6)

3. TMS (16) 4. High level planning (13):

– realistic expectations (10), – clear vision & objectives (3)

5. Project staff (11): – Competent (8), – hard working and focussed (3)

Hypothesis: Top Management Support: mantra or necessity?

Methodology

Case Study

What is Top Management Support?

Garrity (1963), O'Toole and O'Toole (1966), Rockwell (1968), Freeman (1969)

Brandon (1970), Dinter (1971), Adams (1972), Schmitt and Kozar (1978)

Markus (1981), Rockart and Crescenzi (1984) Lane (1985), Doll (1985) Lederer and Mendelow (1988), Delone (1988), Doll and Vonderembse (1987), Izzo (1987), Rockart (1988) 

Reich and Benbasat (1990), Henderson (1990),  Emery (1990), Jarvenpaa and Ives (1991), Bassellier and Pinsonneault (1998), McGolpin and Ward (1997),

Rochleau (2000), Mähring (2002), Sharma and Yetton (2003)

MIS Success: User focus

SIS Success: Organisational focus

EDP Success:Technical focus

The many criteria for success

Delone, W. H. and McLean, E. R. (2003) The Delone and McLean Model of Information Systems Success: a ten-year update Journal of Management Information Systems, 19:4, 9-30.

InformationQuality

SystemQuality

ServiceQuality

Net Benefits

User Satisfaction

Intentionto use

Use

Project Management vs Project Success

project management success is less important (Baccarini 1999)

“benefits are not delivered or realised by the project manager and project team, they require the actions of operations management.” (Cooke-Davis 2002)

there is not a strong relationship between project management success and project success or between project management failure and project failure (Markus et. al. 2000)

4 65

1 Initiation

2 Planning

3 Development

4 Implementation

5 Benefit

6 Closedown

1 2 3

Scope of project success

Scope of project management success

Summary of literature offering advice to top managers

Scope of TMS advice (Delone & McLean 2003)

IT in general IT Projects IT Function

Realisation of benefits

(Garrity 1963; O'Toole and O'Toole 1966; Rockart and Crescenzi 1984; Lane 1985; Doll and Vonderembse 1987; Rockart 1988; Henderson 1990)

(Rockwell 1968; Adams 1972; Delone 1988; Reich and Benbasat 1990; McGolpin and Ward 1997; Rochleau 2000)

User satisfaction

(Freeman 1969; Dinter 1971; Jarvenpaa and Ives 1991; Bassellier and Pinsonneault 1998)

(Markus 1981; Mähring 2002; Sharma and Yetton 2003)

Cri

teri

a fo

r su

cces

s

(Sed

don,

Sta

ples

et a

l. 19

99)

Technical or project management success

(Brandon 1970; Doll 1985; Izzo 1987; Lederer and Mendelow 1988)

(Schmitt and Kozar 1978; Emery 1990)

No direct interestto top managers

What is Top Management Support?

• Garrity (1963)1. Devote time to the [IT] program in proportion to it’s cost and

potential • (O'Toole and O'Toole 1966; Rockart and Crescenzi 1984; Lane 1985; Doll

and Vonderembse 1987)

2. Review Plans

3. Follow up on results

4. Facilitate “problems…integrating computer systems with [business processes] ”• (Rockart 1988; Henderson 1990; Sharma and Yetton 2003)

• Project Champions (Beath 1991, Morton 1983)

TopManagement

A model to test the traditional wisdom

Business processes

ICT Operations

Changed Business Processes

Changed ICT Operations

Projects

IT ProjectGovernance

Activities

Chief Executive Officer (2.1)

Chief Operating Officer (1.7)

Business unit leader (1.6)

Business unit CIO (1.3)

Chief Financial Officer (1.2)

Chief Information Officer (1.0)

Case StudiesHB280 – 2006

TechServ TechMedia ABS The Agency SkyHigh

Project CharacteristicsA routine low

profile IT project.

ERP implementation

Enhancing IT Project

Governance

ERP implementation

ERP implementation

Abandoned (15-31%) -

On time on budget (16-34%) - Some benefits (52-62%) Meet perf. target (10-20%) Main factors contibuting to outcome

Board - () () Senior managers ( ) () () Project sponsor ( ) PM / PM methodology - () Project team () Business managers - () User involvement - - () ( ) Technical issues

'Typical' organisationsOrganisations with a reputation for consistent

success with IT projects

• Descriptive Case StudiesGoles and Hirschheim 2000; Tashakkori and Teddlie 2003; Benbasat and Zmud 1999

• Multiple-case study design – 2 typical organisations, 3 exemplary organisations– Case history developed through interviews with:

• project sponsors, • top managers, • project team, • stakeholders from multiple levels

– Rigour through multiple sources of evidence: interviews, project documentation, observation, critical review (at 3 levels) Young and Jordan 2002a; Young and Jordan 2002b; Young 2003; Young and Jordan 2003

AnalysisWhat is the most important CSF?

CSF T-Serv T-Media ABS Agency SkyHigh

3 Top management support

Full Full Full Full Full

2 User involvement

Partial Partial Partial Partial Partial

4 High level project planning

No Partial Partial Partial Full

1 Project methodologies

Partial No - Partial Full

5 Project staff No Partial No Partial Full

Implications• If TMS is the most important CSF, then much of our

current research is misdirected.– HB280 has informed AS8015 which has just been accepted as an

international standard on the corporate governance of IT (ISO29832)

– HB280 findings are being incorporated into AS8016• A major shift in emphasis may be required:

– Boards and top managers may have to accept that they personally have the most influence whether a project succeeds or fails

– Boards, top managers and their advisors may have to accept that the current ‘expert advice’ has less impact on success than previously believed.

• Further research is needed to explain how TMS influences success and to develop credible guidelines for practice.