Manage failure to secure strategic advantage
April 10 2015 10:53 PM

By Jyoti Lalchandani /Dubai

Thomas Edison, one of the greatest inventors in history, once said, “I have not failed. I’ve just found 10,000 ways that won’t work.” This quote neatly underscores my opinion on the future development of business-IT platforms based on emerging technologies such as cloud, big data, social business and mobility. Mastering these complex technologies not only takes time but also prolonged bouts of trial and error.
The reason for this is that such initiatives are rarely one-and-done efforts. For most enterprises, the adoption of big data or cloud sourcing, for example, represents a stream of projects that stretches out to an uncertain future.
The complexity of these projects and the fact that they will gradually change the enterprise’s use of IT mean that CIOs will be challenged as never before to manage a continuous process of incremental development.
Many of these projects will “fail” in the traditional sense by running over budget, taking too long to execute, or failing to deliver the planned and hoped-for value.
However, even when individual projects fail, not all of the value they have accumulated is lost, and nor should the enterprise abandon its goal of achieving excellence in leveraging technology for competitive advantage.
With that mind, I strongly encourage CIOs and their business partners to find a new way to evaluate the success or failure of their IT projects, recognising that each initiative is not just an isolated element but rather a link in a chain that leads toward true enterprise competency.
Here at IDC, we refer to this approach as “failure management” and firmly believe that it will become a standard project management discipline for CIOs within the next few years. But what does “failure management” really mean? And, more importantly, how does it work?
Businesses rushing to embrace emerging technology solutions may fail more often than not to extract full value from individual projects, but in the long run they will reap enormous value as long as they persist and stay focused on their strategic goals.
The key to “failure management” is to think of failure not as an absolute end result but in terms of a range of project outcomes. Some outcomes require that a project be terminated outright.
Many others, however, represent an opportunity to rethink goals,restructure resources and, ultimately, to make better future choices about how to achieve positive returns on tech investments.
This idea sits at the heart of our recommended approach to “failure management”. And for the CIO, it means leading an evaluation process at key stages in a project lifecycle to assess not only standard performance metrics (e.g., on time, on budget) but also measures of business value return.
At these junctures, called “value checkpoints”, it is as important (if not more so) to determine whether the project’s anticipated return is still in play, still a priority, and still a realistic goal based oncurrent (and projected future) resource requirements.
When projects are failing, organisations face three options: stay the course, kill the project, or find a way to change the project’s trajectory. At IDC, we call this the “Rule of Three”, with the first question being: Should we continue as we have to this point?
There are a number of questions that typically get asked to determine the answer, but the only outflow is “yes”or “no”.
The next question is derived from the first: If we can’t push ahead, can we change course effectively? In these cases, goals change as well, and it is my belief that if the potential to rethink a project exists, CIOs will increasingly build ‘failure management’ disciplines into their project planning and use them as another input to their existing proactive change management best practices.
If the answer to the second question is “no”, there is only one option left: Should we abandon course and kill the project? Of the three questions, two - option 1 (stay the course) and option 3 (kill the project) - are already familiar to CIOs and most project planners.
Nearly all project planning methodologies focus predominantly on those two options. However, it is vital to pay proper consideration to all three options and the questions that need to be answered to determine the optimum course of action - maintain, change, or abandon.
Developing a system to anticipate a range of outcomes for business-IT initiatives will become a cornerstone for the successful implementation of complex technology projects.
CIOs who hope to maintain their relevance as IT leaders will need to become more involved in the periodic review of significant projects, introducing regular checkpoints that provide an opportunity to assess whether the value returned to the business is still on track to justify current and projected resource use.
In five years, perhaps sooner, businesses will routinely source technology solutions from a variety of providers, with the IT department being just one spoke in a much broader wheel.
The consequence will be greater project and architectural complexity, and a much greater opportunity for failure.
But enterprises should seek to manage this opportunity rather than fear it, because those that actively embrace the principles espoused by Edison all those years ago will ultimately see truth in the adage that success always starts with a failure.

♦ Jyoti Lalchandani  is group vice president and regional managing director, IDC Middle East, Africa and Turkey.

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