SE-Radio Epislode 250: Jürgen Laartz and Alexander Budzier on Why Large IT Projects Fail

Risk Management

Risk management in IT projects requires a comprehensive approach that goes beyond individual projects to encompass the entire organizational capability. Jürgen Laartz emphasizes the importance of understanding the distribution of risk factors across a portfolio of projects, suggesting that organizations should train their teams to handle these risks effectively 1. He also highlights the need for organizations to recognize indicators of project failure and consider rebooting rather than terminating projects 1. Alexander Budzier adds that companies should adopt strategies like "predict and provide" and "predict and prevent" to manage risks, which involve realistic assessments and building capabilities to reduce the likelihood of unforeseen events 2.

   

Failure Rates

Failure rates in IT projects are often misunderstood, with many attributing failures to project size rather than variability in outcomes. Alexander Budzier notes that while many projects succeed, the average cost and time overruns are significant, highlighting the need to reduce variability between projects 3. Jürgen Laartz points out that project size does not necessarily correlate with success, challenging the common governance structures based on budget size 4. He argues that true failure occurs when a project fails to deliver its intended impact, rather than just exceeding budget or time constraints 4.