You may have been involved with or heard about recruitment systems that are, shall we say, less than perfect? If so, you are not alone. In fact, studies show that somewhere between 50 and 75 percent of IT and systems change-out projects are ‘challenged’, particularly within the recruitment technology space.
Yes, you read that right, 50 to 75% of IT / Systems projects go wrong.
In this article we will discuss project failures and provide actionable advice on how to prevent them. We will cover the most common types of projects’ mishaps and the frequent causes as well as the potential impacts to our business and how to mitigate risk.
Below we introduce a few types of project failure metrics. We also provide suggestions on how each can be avoided. For further information on managing risks and reflections on common issues specific to recruitment tech projects, see the next article in the series.
Failure to meet a timeline
It is very common, verging on normal for projects to run over the anticipated timeline. Implementations do generally encounter unexpected challenges. In our experience, many projects have unrealistic deadlines imposed upon them from above (see our last article). Timeline blowouts (usually) have the least impact on projects, however if there is a ‘fixed in stone’ event that the system is required for (e.g. payruns) then delays can be critical. Having a shrewd project manager onboard building a generous contingency into their milestones and timelines, is a great way to reduce pressure and deliver to sponsor expectations.
Paying more than budgeted is perhaps the easiest failure to quantify and understand. Most people are used to earning and spending money, rather than thinking in terms of cashflow or opportunity costs, so budget blowouts get a disproportionate amount of attention. Negative impact to cashflow can come in more subtle or secondary forms that often outweigh any additional spend. These include timeline increases, which result in (paid) staff remaining dedicated to the project, and a short fall in outcomes delivered, which can result in reduced savings and new revenues. However, a budget overrun is at least a challenge that can be addressed and resolved by having a tight control on additional/surprise expenses and keeping a hold on project creep.
Shortfall in delivering value, or expectations
The final major type of failure to be aware of is a shortfall in delivered outcomes. This normally happens at the buying/sales stage of process where values and promises are oversold and subsequently underdelivered. To get a feel for the detrimental impact of outcomes shortfalls, remember that IT and recruitment systems projects are generally expected to deliver significantly greater savings and benefits than the costs of their delivery (perhaps by a multiple of 5 to 10), so the impacts of shortfall should be thought of as outweighing costs by the same ratio. Buying can often be an emotional task, so having a solid grasp on all areas of system functionality and a strong understating of your operational requirements will lead to a more satisfactory outcome. As indicated, it is often easier to talk up outcomes but much harder to quantify them and drive their actual realisation.
You may have heard the term ‘black swans’ used to describe projects that go notably wrong. These are the ones you have read about in the press, mostly they are large and often they have lead to the downfall of the organisation running them. There are multiple definitions of a black swan, for example any project that exceeds 200% cost or time overrun, but in essence they are those projects that do more harm than good. Black Swans are not as uncommon as we would have hoped, some estimates indicate that as many as 1 in 6 projects go dramatically wrong. The black swan stamp can be attained in a couple of ways, either creep (death by a thousand cuts) or a singular dramatic (often seemingly random) event.
To mitigate against them both you can enforce ‘governance’ through strong project management, simply setting up a solid Project Management approach will in itself help identify where a thousand cuts are waiting on the horizon. Strong risk analysis and management is the activity that is designed to address ‘random’ event failures, essentially by identifying them upfront, mitigating and monitoring.
We believe that a focus on attainment of project benefits should be the highest priority, trumping even timeline and budget overruns, for two important reasons; first benefits often slowly and invisibly get lost or forgotten, and second because they have the potential to have the most dramatic impact on the organisation when securely attained.
Our advice on driving benefits from projects is to follow these steps:
- Quantify - a foundational activity which requires getting into detail concerning exactly how the new system will benefit the organisation at a detailed/granular level.
- Drive - use the quantification data to prioritise and drive the impactful deliverable or components of the project
- Realise - again using the quantification hold team members accountable for deriving the benefits
- Maximise - set stretch goals for usage of the new system and measure their attainment
Considering a system change-out?
Rec Tech Solutions is an un-biased Recruitment Tech advisory consultancy, using the revolutionary platform Skop.es to aid clients in their system search, selection, project management and implementation.
Download our guide on how to avoid project failure.