1 How to Cause Information Technology Disasters William A. Yasnoff, MD, PhD Oregon Health Division

2 Causing IT Disasters u Risks of Information Technology u Types of Disasters u Disaster Strategies: Management u Disaster Strategies: Technical u Avoiding Disasters

3 Risks of IT: How Projects Fail u Functional: system does not perform needed tasks (correctly) u Users resist new system u Management resists new system u Cost overrun u Delays u Technical problems: system does not work

4 Sources of IT Risk u Mismatched expectations –lack of knowledge by management –lack of accurate forecasting –lack of adequate communication u Inadequate planning u Changing specifications u Resistance to change u Technology

5 HI LO D O A B I L I T Y BENEFITSBENEFITS Nolan & Norton Benefit/Risk Grid High Wire Acts Block Buster Dud Bread & Butter

6 Rates of IT Failure are High 16.2% were “project successful” (software projects that are completed on-time and on-budget among American companies and governments) 52.7% were “project challenged” (they were completed and operational but over-budget, over the time estimate, and offers fewer features and functions than originally scheduled) 31.1% were “project impaired” (canceled) Source: “Charting the Seas of Information Technology” The Standish Group 1994

7 Strategies for IT Failure u Management u Technical

8 Key Elements in IT Projects Time Budget Features

9 1. Trust the Vendor u Buy system without clear problem specification u Rely on single source of advice u Ignore standards and open systems u Select the lowest cost option u Use only one vendor for all purchases u Only allow use of “standard,” centrally approved software

10 2. Delegate u Implement and manage IT systems with different group from purchaser u Separate strategic and operational management u Impose cosmetic quality control standards u Delegate operations, retain financial control u Develop rigid job descriptions

11 3. Impose Rigid Controls u Eliminate exploratory work u Enforce conformity with current in- house standards u Require justification for every computer system expenditure (savings or competitive advantage) u Eliminate operational managers who take an organization-wide view

12 4. Divide and Rule u Separate business and IT functions and personnel; separate career tracks and reporting lines u Encourage competition within the organization; discourage collaboration u Maintain management ignorance of IT; do not fund IT continuing education u Underpay all IT staff

13 5. Use IT as Tool for Finance u Place IT under Director of Finance u Use IT primarily for financial control u Focus IT efforts on executive information systems u Move corporate staff to remote site u Move IT staff and operations to (different) remote site

14 6. Use Consultants u Rely solely on external consultants for IT u Use the same external consultants for management advice u Eliminate any in-house staff that address the areas of IT covered by the consultants

15 7. Set Objectives u Impose rigid quarterly financial performance objectives with required cost-benefit analyses of all IT expenditures u Use IT to support and reinforce vertical patterns of management reporting u Do not support general objectives with detailed IT project planning u Always accept the lowest bid

16 8. Control Information u Restrict contacts between departments u Penalize criticism of IT systems u Avoid discussions of failures or conflicting views u Minimize communication between management and staff u Centralize all IT operations and development

17 9. Avoid User Input u Do not consult with staff who will use or be affected by new systems u Provide minimal training in new IT systems u Automate all possible functions with the goal of eliminating the maximum number of staff

18 Strategies for IT Failure u Management u Technical

19 1. Technical Leadership u Appoint a technical project leader with complete authority; do not involve users u Ensure that team consists only of programmers u Give technical team complete financial and decision-making autonomy

20 2. Resources u Provide whatever resources are requested at outset and as project continues u Do not involve managers or users in resource allocation u Provide latest state-of-the-art equipment, software, and tools without regard to other IT systems

21 3. Planning u Insist on complete specification of system in advance, including all deliverables, tasks, and sub-tasks u Require strict adherence to a timetable completely defined in advance u Allow continuous modification of requirements throughout the project

22 4. Feedback u Avoid discussing technical issues with users u Avoid user testing of system operational concepts u Develop complete working systems without user involvement u Insist on user cooperation in use of new systems even if they do not benefit

23 5. Technology u Encourage development of custom software and tools rather than use of commercial packages u Encourage use of latest technology, especially if unproven in operational systems u Avoid purchases of any capability that can be developed in-house

24 Avoiding Disasters u Reasons for success and failure u Warning signs of projects in trouble u Paradigm for IT project implementation

25 Reasons Projects Fail u Expectation Mismatch u Poor communication u Bad idea u Forcing project delivery dates u Assigning under-skilled managers u No business sponsorship u No comprehensive plan

26 Reasons Projects Succeed u User involvement u Management support u Skilled, experienced project managers u Clear requirements statement u Comprehensive work plan u Sound development methodology u Prototyping u Extensive Testing

27 Project Failure Warning Signs u Lack of agreement on goals u Continuously changing requirements u No written project implementation plan u Rapidly growing budget u Repeated contract modifications u Major deliverables are late u Project managed solely by contractor

28 Paradigm for Success u Behavior Modification –management –users u Minimize increments of change u Use intermittent positive reinforcement –provide real benefits to users –what they want, NOT what you want

29 Disaster Avoidance: Pearls u Clear goals supported by management u Adequate budget and time u Continuous user involvement u Planning u Use proven methods & technology u Prototyping u Minimize increments of change u Behavior modification

30 Key Elements in IT Projects Time Budget Features