Why Do IT Projects Succeed or Fail?
Discussions with experienced CTOs, consultants, and project managers indicate a variety of reasons for IT project failure. If you step aside from the individual cases, common themes emerge. A few are obvious; others are not as well recognized.
Many large projects fail because their goals are not clear enough. There is no clear problem definition the team is going to solve or propose alternatives for, there is no clarity about requirements, and the full scope of the project is not understood. One executive has an objective, but as the project moves forward, new people, such as other executives, risk managers, and architects are introduced, adding their ideas of what would be best. The net result is unclear goals, expanding project scope, and poor project design, all of which lead to unending debates and sliding timelines.
Salespeople and internal project champions all want their proposal to succeed. However, in their desire to make the ‘sell,’ they often underestimate costs and over-emphasize benefits. When preparing business cases, there is a tendency to maximize benefits and reduce costs to achieve the right return on investment (ROI). At times, this under-estimation is not intentional, but the result of the CIO having a poor understanding of the current situation and requirements. The CIO does not consider, or budget for, efforts to move from installing a system to actually achieving the benefits (new products, customers, capability).
Over-optimism results in unrealistic schedules. There is often an unjustified faith in technology (product, vendor, or internal capability). Solution complexity is not evaluated, either.
Major IT projects have a high degree of complexity due to new technology, myriad interfaces with other systems, and data conversion, or because project teams have to compete for resources with other projects. Legacy processes also have to be replicated or supported in the new system, which adds to the complexity.
What project managers (PMs) and executives do not understand is that the risks and effort involved increase along with complexity. Systems and processes become brittle as people try to cater to this complexity in a tight timeframe and with workarounds. The complexity eventually overwhelms the PMs and their teams. As a result, projects go out of control.
Large projects often have multiple executives, each with slightly different agendas as stakeholders. The executives have different expectations of the project’s benefits and options, which are, at times, incompatible. None of the executives fully support the project, and many projects lack an effective sponsor who is accountable for project goals and benefits and who can arbitrate conflicting demands.
Weak sponsorship also indicates poor accountability across the project. When dates slip, tasks are not completed and roadblocks emerge, and no one is held accountable. This results in the project becoming unmanageable. Weak ownership often ends up with poor project control, resulting in an increased chance of project failure.
People accept that a lack of governance is a major reason for the failure of a project. However, most large projects have the exact opposite problem; there is too much bureaucracy. 80 percent of budgeted costs were non-productive costs or red tape. Sometimes a three-day change request needed justification papers and the approval of the executive steering committee, which cost more than 10 days of effort.
In large organizations, stakeholders such as risk managers, compliance staff, methodology experts, and architects all have their own governance demands, which greatly increases demands on project staff.
More recently, project management has succumbed to the modern fetish of valuing form over substance. Below is a quote from a CIO regarding this over-engineering:
“In the past, we spent time working out how to solve a problem. We explored different avenues of approach, different ways of meeting a target, and focused on the customer’s needs and expectations. We focused on what was to be delivered.”
Nowadays, it seems that the focus is more on planning how you are going to do it, coupled with a determination to adopt methodologies and standards. The result is that we spend more time planning the methodology and approach to the project rather than working on the technical requirements of the solution and how we can deliver it. The body of documentation has greatly increased. Now we have the plan plus risk analysis, process flows, summary timelines, and all sorts of forms showing who did what, with and to whom, and when.
That gives rise to a much higher number of formally documented meetings, implying a new breed of project administrators who manage documentation and schedule meetings, adding to project overhead in both time and cost. A second consequence is that people now have a welter of forms to complete in addition to actually doing the work.
The Management Factor
A major success factor for projects – large or small – is the project manager (PM). Having certification as a PM is one thing, but having ability and know-how is another. The PM has to understand how to balance the needs of the project with the needs of good governance. The PM has to use the right methodology, and apply it at the right time and in the amounts that are really needed.
A PM must also have knowledge of the subject matter. The notion that a qualified PM can manage any sort or size of project is twaddle.
The other thing to point out is that projects never go from being well-managed, on-budget and on-schedule to outright failure overnight. There is always a transition period, during which the project is “troubled.”
If you can cut through the noise to see the real issues, you have a window of opportunity in which the project can potentially be rescued. Since the people involved in a project generally want it to succeed, they unintentionally start ignoring or dismissing the warning signs. Try to identify risk by yourself from the “helicopter” view. If you still cannot identify the issues but feel that everything is not okay, using external reviewers to detect these early signs and help the sponsor take decisive action can often help rescue a troubled project.
Think Big, Act Small
Large IT projects fail for a variety of reasons, and while there is a host of ways to mitigate these failures, one last fact is worth mentioning here.
The Standish Group’s research indicates that smaller projects (whether based on Agile or Waterfall methods) have a much higher success rate (76 percent) than larger projects (10 percent). Many industry pundits agree that delivering product in small doses produces positive results.
You can think big, but you need to act small by making every big project a group of small projects.
Successful ICO Definition
With the launch of dozens of new cryptocurrencies daily, some are destined for Bitcoin-style explosion, yet the vast majority will flop, crash, and burn.
So, is there a magic formula for ICO success? There are a number of ways to measure “success,” but we’ve put together this list in order of increase in value (statistics accurate at time of writing).
Let’s take a look at the most successful ICOs of all time to see exactly how the biggest names in crypto are setting themselves up for the kill.
ICOs are the hottest trend in cryptocurrency. There are dozens of new releases weekly, adding to the hundreds already out there. Most of these releases you can find by browsing through an online ICO calendar. Sifting through the new releases can be overwhelming. For this reason, we’ve organized our calendar so you can view upcoming ICOs, or ICOs which are ending soon. You can also search through ICOs by category.
If you’re thinking about launching your own ICO, you’re probably a little intimidated by some of the projects in the race. However, rest assured that there are a few key factors that lead to creating a well-known ICO. Today, we’ll break down what distinguishes an ICO from the pack.
For those unfamiliar with an ICO, it’s similar conceptually to an initial public offering, or IPO. Investors pay money to get shares of a hot new token first. Ideally, the coin will grow and flourish, and the tokens acquired early will be significantly more profitable down the line. Investors usually pay in Bitcoin or Ethereum, two established cryptocurrencies. ICOs have a lot of benefits. The fundraising process is leaps and bounds faster than normal means of raising capital. This can get the money into the development team’s hands as quickly as possible, so they can get to work. But it’s not all rainbows and roses; many ICOs fail, or are labeled scams.
1. White Papers Are Good, but a Working Product Is Better
The best way to avoid being labeled a scammy ICO is our first (and quite possibly most important) key. Have a working product! Just as anyone can brainstorm a nifty app idea, coming up with the concept of a currency is the easy part. A good white paper can be immensely helpful to investors, but at the end of the day, having a working product (even if it’s not perfect) brings tremendous credit to a coin. In the real world, a team with no prototype would never receive tens of millions in hours. Just because cryptocurrency is still in the Wild West days doesn’t mean due diligence should be discarded.
However, here we could also have the opposite situation: when an idea is perfect from a technical point of view, but the team cannot deliver it to the community from a business point of view.
2. Transparency Is Critical
A second key to a successful ICO is transparency. Investors pour money into projects with no precedent, to a team they’ve never met, over the internet. Cryptocurrencies don’t hold press conferences or issue financial statements. It’s easy to understand how token-holders can get jittery. Successful ICO teams take a number of steps. They interact heavily with the community. They post on the coin’s Reddit, or use Slack or Telegram to provide updates. Some livestream meetings. Still others post samples of their code on their website or GitHub. Bancor has done this, and StorJ’s code is actually open-source. Cryptocurrencies can’t be physically held, so being able to look at a coin’s code is a phenomenal way to reassure investors.
3. Have a Plan for the Money
A third key is related to transparency, as well, but important enough to list separately. Have a plan for the money. And make it public. Some of the best white papers I’ve seen listed clear, step-by-step plans for how funds from ICOs would be spent. An investor can look at a spending plan and clearly identify where their money is going, and what the project should look like by certain dates. This is particularly helpful with uncapped ICOs that raise more money than planned, something we’ll get into more later.
The best way is to present exact figures with regard to token distribution and the further use of funds.
4. Marketing Genius Is Required
A fourth pillar is marketing. Seems obvious, but with the staggering amount of coins out there, the world isn’t going to beat a path to your doorstep. TenX used a YouTube channel to tremendous effect. The team posted videos of them using the product in action, performing everyday activities like ordering pizza or grabbing coffee. This allows investors to envision the product working in the real world. Other companies have advertised on Reddit, Facebook, and even Tinder. It’s too early to tell if those particular mediums will work, but the company simply has to get the word out. NXT is a case study of a failed ICO due to poor marketing. In 2013, NXT’s original ICO was an anonymous user posting a Bitcoin address in forums soliciting donations. Shockingly, it didn’t set the world on fire. The team raised only $6,000. However, NXT is a fascinating platform with many real-world applications. It’s sad to see an amazing concept not reach its full potential due to avoidable marketing failure. With scams around every corner and coins blowing up daily, it’s uber-important for a team to market itself well.
5. Name Power Helps
Lastly, name power. Having a good team with relevant work experience is essential to the down-and-dirty work of building a coin. But big-name backers and advisors have huge sway with investors. TenX listed Vitalik Buterin, founder of Ethereum, as an investor. Bancor proudly boasted of having Bernard Lietaer, one of the creators of the Euro, on their team. The cryptocurrency space is young, so having proven experts on a team is a huge win. However, they must be actively involved. TenX listed Vitalik as an investor, but in an interview, Vitalik admitted he has not personally invested in the project. Just because a celebrity endorses a product doesn’t mean they use it.
6. Be Clear About Your Decision For the Hard Cap
On that note, we’ll swing into the dark side of why some ICOs raise so much money. They’re uncapped. A capped ICO only accepts a certain amount of Bitcoin or Ethereum. An uncapped ICO swings for the fences, and takes as much as they can get. This seems like a good problem on the surface. The team gets more money to work with, and more investors get the coin they want. Bancor is a prominent example; the team kept their ICO running longer than planned, and raked in an extra $51,000,000.
But if a team sets a hard cap, then changes it, the investors who got their currency early might find it devalued. This is a common complaint from those who bought into ICOs that take more money than planned. On a darker note, uncapped ICOs are an easy way for teams to scam investors. Cryptocurrencies aren’t audited, so a team could easily pocket some of the money, with no one the wiser. Or they could simply change how much of the currency they’ll withhold. This is another reason teams should publish plans for how the money will be spent, as we touched on earlier. $200 million can test the morals of many people with good intentions. Tezos, Bancor, and many of the other biggest ICOs were all uncapped. The numbers are eye-popping, but uncapped ICOs are a mixed blessing.
The Most Successful ICOs of 2017
Filecoin — $257M
Filecoin is a blockchain-based decentralized data storage network. It is a project that allows Blockchain participants to provide their servers and share their storage. If you let someone store their data on your server or computer, you get Filecoins and receive a reward. This project raised $257M — split into a $52M presale and $205.8M in the second round — from August 10 to September 10. The creators of this project did not sell the tokens by themselves, but agreements on future tokens whose owners were guaranteed to receive tokens in the future. During the first hour of the ICO, $135M was raised. The funds were raised in dollars, Bitcoin, Ethereum, and Zcash.
Tezos – $232M
Tezos is a blockchain platform of smart contracts. The Tezos project operates on a new blockchain, and it possesses the capability to update its code, which enables it to adapt to innovations in the future. The project raised $232M in July. Despite this, their status as the biggest ICO didn’t last for long. The platform started with a record ICO, but ended with lawsuits and disagreements. There were many disagreements within the team that caused a collective lawsuit with charges of fraud and a demand to return the funds.
EOS — $700M
EOS is an infrastructure for decentralized applications to be built and tested in a public environment. The project will allow people to make numerous transactions per second, thus making blockchain projects more effective. It is confirmed that this project raised $700M for the ICO. Their crowdsale is still going on, and the token sale will continue until the middle of 2018. There is a lot of interest in their concept, and it is already a successful ICO. Their ICO ran on the Ethereum blockchain, but it was named as a competitor of Ethereum.