Key Points of Failure for IT Project Business Cases

• Author: Timothy Iijima
• DOI: http://doi.org/10.1002/jcaf.22051
• Date: 01 May 2015
• Published date: 01 May 2015

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© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI 10.1002/jcaf.22051

This article was originally published in Volume 23, Number 5 of The Journal of Corporate Accounting and Finance.

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Timothy Iijima

INTRODUCTION

Most industry

studies and surveys

report that large

projects and pro-

grams at companies

generally underper-

form expectations,

meaning that they

either are delivered

late, come in over

budget, or fail to

deliver their expected

benefits.1 There have

been a number of

studies of the causes

of program failure,

with the general con-

clusion that there is no single

driving factor, and no single

“magic bullet” solution; large

projects and programs are

inherently complex, and have

multiple points of failure.2

One aspect that has received

less attention, however, is the

degree to which projects and

programs are doomed from

the start to underperform due

to the fact that the expecta-

tions were inappropriately

set. This article focuses on

this key element—the setting

of expectations in the form

of a formal business case. A

brief article is not a place for

a tutorial on writing effec-

tive business cases, and there

are many references written

on the topic of how to write

business cases. Rather, this

article enumerates five key

points of failure in IT business

cases (see Exhibit 1), why they

occur, and how they can be

avoided.

FAILURE TO

DESIGNATE THE

BUSINESS AS THE

BUSINESS CASE

AUTHOR

The easiest party

to name the owner of

a business case for an

IT project is the IT

team. IT personnel

know IT and know

what IT projects

look like; they know

what systems will be

involved, they know

what kinds of skills

will be required, and

they know what the

risks are. Also, IT projects are

generally led by IT personnel.

For these reasons, it is inconceiv-

able that an IT project business

case would be written without

significant input from IT. None-

theless, it is not generally advis-

able to designate the IT team

as the author, or owner, of the

business case.

As much knowledge as IT

personnel may have regarding

the inputs to an IT business case,

it remains the case that their

Large IT projects at companies generally under-

perform expectations—they either are delivered

late, come in over budget, or fail to deliver their

expected benefits. Studies reveal that there is

no single driving factor for these failures, and

no single “magic bullet” solution. But are many

projects doomed from the start to underperform

expectations—because the expectations were

inappropriately set?

This article focuses on this key element—

the setting of expectations in the form of a

formal business case. The author discusses

five key points of failure in IT business cases,

why they occur, and how they can be avoided.

© 2015 Wiley Periodicals, Inc.

Key Points of Failure for IT Project

Business Cases