Why Technology Projects Fail

The Importance of domain depth and the value of InvestCloud’s PWP®

The Numbers:

  • In a KPMG global survey, 86% of firms reported a shortfall of up to 25% of promised benefits across their project portfolios. (1)
  • In Geneca study, 78% of respondents reported that the “Business is usually or always out of sync with project requirements”. (2)
  • The same study reported 75% of companies said projects failed due to “Fuzzy objectives, out-of-sync stakeholders, and excessive rework”. (2)
  • Dobbs Journal survey found 70% of firms seeing signs from the start of a project that were likely to cause the project to fail. (3)
  • An IBM survey of 1,500 executives indicated 60% of “Change” projects fail to meet schedule, budget and quality goals. (4)
  • KPMG survey of Project Management practices showed 50% of firms saying their projects failed to consistently achieve project objectives. (5)
  • McKinsey & Oxford study of 5400 large scale IT projects found 45% of projects were over budget while delivering 56% less value than predicted. (6)

The high rate of failure for technology projects is legend. Billions of dollars a year are wasted on failed or abandoned technology implementations.  The Financial Services sector is a significant contributor to these horrendous failure stats.  The apparent reasons for failure are many, but they all trace back to two, and only two, key factors. The first is an inability to effectively define and communicate project requirements. The second is the development/implementation approach used to improve existing implementations or greenfield projects.

The Disposition of Better Definition

The most practical solution to the problem of ineffective project definition is to engage vendors with substantial experience and domain depth.  This will help ensure that the right questions are being asked and that reasonable expectations are being set.  Questions like 1) Do we have the right approach?  2) Do we have the right people? and 3) Are we building the right product?  These questions should include hearing the voice of the client as well as the voice of all types of users, both senior and junior.  The vendor should also have an in depth understanding of the eco-system where a project will live (cloud, coupled, modular, etc.). That is why vertical market specialists are often the best and most cost effective partners when a project is focused on requirements specific to a particular industry. There is no substitute for deep domain experience and a history of successful project implementations. This proves that an experienced vendor can be highly effective in laying the foundation of good requirements gathering and feature prioritization.

Collapsing the Duration of Iteration

The solution to closing gaps that emerge in implementing deliverables is a more difficult problem than the first. It is a problem inherent to the constraints of traditional enterprise software, and requires a radical new approach to application development. The reasons are two. The first is the “lost in translation” problem that happens when business analysts do their hand-off to programmers. The second is the greater time and expense required for traditional coding. Commonly it is months to quarters before the business user gets to see how closely, or not, the product outcome matches the intended requirement.  This is a result of traditional software development lifecycles like the “Waterfall” project methodology; Gather requirements once and start implementing until completed. It was essentially because of this problem that Agile methodologies have all but replaced the older Waterfall approach. Continuous iterations allow for a more consistent “clean-up” of the problems during the course of the project.  Ask the right questions, Build, Configure, Test, Release, REPEAT…typically over 2-3 week sprints of development.

At InvestCloud we have addressed this problem by developing a completely unique next-generation approach we call PWP® (Programs-Writing-Programs).  Our founders addressed this hard-coded, slow-to-implement project problem early on and invested significant resources to solve this core development issue.  The PWP approach is a collection of proprietary tools that allow business analysts and designers to do the configuration work of a traditional programmer with production ready code as the result. PWP developers that are closest to the needs of the business unit and requirements definitions develop applets in a very fast, secure, modular way. This unique agile approach collapses both the cost and time required to iterate.  Prototyping quickly with continuous user feed back is now much more cost effective and reduces risks of failure by identifying problems quickly. Within days to weeks the business user can be using actual pre-production versions of their applications with production environments ready as soon as users and quality assurance/risk teams have approved results.

Flexibly Fit-to-Purpose

This PWP® approach makes it very cost and time effective to create multiple versions of an application that is configured to the specific requirement of different business users. Evidence of that are the 4,000+ applets versions that our clients have uniquely configured from our core 150+ digital applet function sets such as Client Communication and Client Management.  The InvestCloud digital warehouse can deliver, in a secure multi-tenant environment, “house” views of data, which are about managing positions, exposures, risk, and trade compliance.  InvestCloud can then quickly deliver custom configurations of the applets for portfolio accounting “system” views which address firm management, billing, and tax reporting for example. Finally, there are the “reported” views to clients, intermediaries, and shareholders which are focuses on documenting and reviewing results.  Each of these user personas have unique needs that can be addressed with applets that are “fit to purpose” and quickly configurable based on their custom requirements and beautifully designed for each individual user…all without hard coding a single digital experience.

 

If you would like to learn more about InvestCloud and how our PWP® approach can ensure the success of your digital financial technology project or annual technology roadmap, visit us at www.investcloud.com or call us at 888.800.0188.

About InvestCloud

InvestCloud, Inc, the first of its kind, all-in-one “Cloudsourcing” (Cloud-based outsourcing) solution for the financial services industry. With $1.5 Trillion and 660 client firms on our platform. InvestCloud designs, develops, and deploys digital applications with pace setting efficiency for asset managers, private banks, fund of funds, investment advisors, and the managers of pensions and endowments. InvestCloud’s core value-add is data integration, consolidation, and analytics delivered across web and mobile applications. Equipped with our unparalleled and innovative cloud applets, InvestCloud’s solutions employ innovative elements of Form, Function, and Fulfillment that collaborate seamlessly with independent and legacy technologies including those of custodians and line-of-business applications which allow firms to leverage and extend their existing infrastructure.

 

1: KPMG. 2005 Global IT Project Management Survey of 600 organizations globally.

http://www.kpmg.com.au/Portals/0/irmpmqa-global-it-pm-survey2005.pdf

2: Geneca. 2010, 2011 Interviews with 600 people closely involved in software development projects.

http://www.geneca.com/75-business-executives-anticipate-software-projects-fail/

3: Dr. Dobbs Journal. 586 respondents to 2011 email survey on IT Project Success Rates

http://www.ambysoft.com/surveys/success2007.html

4: IBM. Oct. 2008 Survey of 1,500 change management executives on the failure rates of “change” projects.

http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03100-usen-03-making-change-work.pdf

5: KPMG. 2010 Survey of a broad cross section of companies on Project Management practices.

http://www.kpmg.com/NZ/en/IssuesAndInsights/ArticlesPublications/Pages/project-management-survey-2010.aspx

6: A 2012 McKinsey & University of Oxford study of 5,400 large scale IT projects with initial budgets greater than $15M. http://calleam.com/WTPF/wp-content/uploads/articles/Whatmakes.pdf