28 Jul The IT Crisis Part 3 | How to Solve the Problem
*This is a summary and analysis of the following publication. For full references and research details, please see original publication written by Dr. Isaac Kashiwagi.
Kashiwagi, I. (2018). A Global Study on ICT Project Performance. Journal for the Advancement of Performance Information and Value, 10(1), 8-27.
This article is a part of a series of articles unravelling the secret to improving information and communication technology (ICT) project performance. Previous articles have already shown the problem and solution to poor ICT project performance including:
1. Article 1: Chronology and compilation of ICT project performance statistics which have shown to be low for decades.
2. Article 2: Analysis of ICT project complexity, concluding that complexity is caused by insufficient expertise and the solution to complexity is a process which facilitates the identification and utilization of expertise.
ICT Project Performance
The information communications technology (ICT) industry has had perceived performance issues for years. Performance issues have been identified as early as 1969 when in a NATO software engineering conference, addressed the so called “software crisis”. Since 1969, technology has advanced with various project delivery and management methods including rapid application development, the V-model, spiral model, lean software development, and agile. Even with these advancements the “software crisis” has not stopped. Year after year, performance in the ICT industry is reported to be at a “crisis level” with the latest numbers from the Standish Group (2020) citing only 31% of projects are successful. For this purpose, the reviewed journal publication analyzed ICT project performance and potential solutions for the industry, this is a summary of the study’s conclusions.
Searching for the Problem
The study cites 34 different publications from governmental reports, private organizations, and academic journals; all of which confirmed poor ICT project performance has not changed throughout the years. For the listing of all such publications see The ICT Project Performance Crisis Part 1. Performance is measured by criteria such as time, cost, satisfaction, quality, and required features and functions. Multiple problem factors were identified; however, none were vastly different than any other industry including factors of project planning, the project team’s capability, undefined scope, changing scope and top leadership support. There is nothing to differentiate the reason that the ICT industry seemed to be suffering much lower results than any other industry.
Industry Proposed Solutions
The research study found three methods which claimed and provided evidence of improved performance in the ICT industry including agile project management, the reduction of project size, and the Best Value Approach. It is interesting to note that with the many “solutions” proposed to improve various parts of an ICT project (procurement, contract management, scoping, etc.), there was little concrete evidence to support the adoptions of such solutions.
The agile methodology’s success has been attributed to its ability to handle complexity by working in short timeframes called sprints. Agile has become mainstream in the ICT sector with as high as 84% of ICT companies practicing agile methodologies. In comparison to traditional approaches, the Standish group concluded Agile had a success rate 28% higher than the waterfall approach. The second and arguable simplest approach proposed was to make projects smaller. The Standish group (2013) reported a 76% success rate with smaller projects under $1M compared to a success rate of 10% with large projects. The reduction in size was noted to be even more important than the project management methodology (Standish Group, 2013) as project size was reduced success rates in agile and waterfall methods were similar. However, there is room for debate for project size as a solution. The Giarte Study (2014), that is conducted annually to ICT clients/buyers in the Netherlands, analyzed ICT project size as well. From their results it was concluded that larger projects had greater or equal success than smaller projects. In 2013 Giarte reported a success rate of 76% for small projects compared to 85% for large projects.
In the end, both solutions of agile and project size do not seem to align with the ICT industry’s performance history. If project size was the problem only large projects would fail. In tracking performance through the years, both small and large projects have suffered poor performance equally. Project size issues would also indicate a lack of expertise within the ICT community dating back to its beginning as early as 1969. It also does not explain high performance companies and individual cases which show it is possible to have a high success rate of ICT project success without reducing project size. The agile method deductively has shown it is not the answer. The industry is saturated with the knowledge of agile and its use for years now, yet ICT performance reports have not improved, and individual case studies of agile project success are scarce.
The Best Value Approach
The third approach is the Best Value Approach (BVA) [JG1] which was first developed through research at Arizona State University (ASU). The BVA is a philosophy and project deliver method which focuses on utilizing the expertise of the supplier to improve performance and minimize risk. The BVA was hands down the most supported approach to be successful in improving performance with documentation of case studies in reports, academic papers and four independent auditing agencies. It is also the most licensed management approach through Arizona State University with 65 licenses. Through 28 years of
research, PBSRG has worked on over 2,000 BVA projects valued at $6.6B in 10 countries and industries
including healthcare, construction, ICT and services. Case studies have shown that BVA can reduce project costs by 30% with on time and on budget performance. Some documented cases cited in the study include:
- The State of Oklahoma COTS-ICT Tax software (Kashiwagi, 2014).
- ICT Networking for one of the largest Universities in the United States (Rivera, 2014).
- Top rated ICT vendor in the infrastructure and application integration business (Kashiwagi et al., 2014)
- Port of Rotterdom and a large ICT vendor to (Kashiwagi et al. 2015).
- Large ICT vendor’s sales and marketing group (Kashiwagi et al. 2015).
- The municipality of Eesmond telephone facilities (Logemann & Kashiwagi, 2017).
- Procuring ERP services in a traditional environment (Kashiwagi et. al, 2018).
The Real Problem: Client Centric Models
The BVA suggests the source of performance issues is not something caused by new technology or complexity, it has been around for decades within the ICT industry, confirmed through years of poor performance. The problem is also not unique to the ICT industry, all industries are suffering from low project performance. The problem is the client centric structure all industries have adopted. The clients have taken the role as the assumed expert, by over managing and over specifying projects. By acting as the assumed expert [when in fact studies shown they should not be], the client is lowering the value of the suppliers’ expertise and creating a reactive supplier pool. The BVA is vendor centric, meaning it places the supplier in the rightful place as the project expert and the client as an information worker who identifies and utilizes supplier expertise. When the correct Buyer and Supplier roles are taken, accompanied with the structured BVA process methodology, ICT performance issues are resolved naturally.