IT failures are common and cloud computing doesn’t do much to change that if companies continue to make the same IT deployment process mistakes they have made in the past. The industry is awash in failure stats from various sources going back a decade.
From the 2009 Standish Group Chaos Survey: the researchers found a decrease in IT project success rates and an increase in failure rates during the preceding two years. Just 32% of IT projects were considered successful, having been completed on time, at budget, and with the required features and functions. Almost one quarter of the IT projects were considered failures, having been cancelled before they were completed or having been delivered but never used. The remainder was considered problematic; either they were finished late, over budget, or with fewer than the required features and functions.
In his 2009 paper titled The IT Complexity Crisis: Danger and Opportunity Roger Sessions calculated that worldwide the IT industry was losing over $500 billion per month on IT failure. The number seems extreme but Sessions rationalizes it in his paper although BottomlineIT is not completely convinced. But say the real number is closer to one-tenth or $50 billion worldwide. We’re still talking about an enormous amount of wasted IT resources.
How many organizations need to waste $5 million, $10 million, even $25 million on projects that don’t achieve their objectives before the number reaches $50 billion. And large organizations have dozens or even hundreds of projects in the pipeline. If a quarter of them fail, the math gets very ugly very fast.
Extend this kind of thinking to cloud projects and it gets interesting. Many cloud proponents have started to sound like the first generation dotcom executives who thought that they didn’t need to generate revenue; capturing eyeballs was enough. Well, as it turned out, just capturing eyeballs was not enough. We learned that the normal laws of economics still apply.
Today cloud proponents stand up at conferences and declare that cloud information technology enables new ways of doing business, as if that somehow frees cloud projects from the need to achieve their objectives or generate an acceptable ROI. Sorry, cloud IT project failures are as ugly as any others. BottomlineIT believes cloud projects can and should generate a positive ROI and will post a piece on cloud ROI soon.
The mistakes that lead to cloud IT project failures are strikingly similar to the mistakes that lead to any IT project failure. Kevin Jackson, writing for Forbes, focused on eight cloud mistakes. Jackson called them cloud transition failures:
- Lack of formal planning
- Missing or poor IT governance
- Poor or missing responsibility matrix
- Neglecting the human resource management challenges
- No program management office
- Failure to fully inventory of assets
- Lack of oversight
- Inappropriate or lack of a service level agreement (especially with multiple cloud providers)
BottomlineIT could add a few more: lack of effective change management, ignoring security until the end, failure to document, lack of a contingency plan for when things go wrong, and more.
In short, there is nothing surprising here; companies have been making these IT mistakes for decades, long before cloud computing. It cost them dearly in the past and will cost them in the cloud future if they continue to make the same mistakes. These are just the basic blocking and tackling of IT. What’s surprising is how often they are ignored.