IT-Enabled Business Change: An Approach to Understanding and Managing Risk

IT projects aimed at enabling business change have become larger and more critical in recent years. But despite improved technical functionality and reliability, there are persistent project overruns, delays, and downright failures. A recent study estimated that 30% to 70% of IT projects aimed at process improvement do not live up to expectations. This finding echoes early research on IT project implementation. With major IT-enabled process changes, such as occur in ERP, CRM, and SCM projects, major delays and overruns can result in firms missing their revenue and profit targets. Over the years the stakes have grown but enterprises still have problems managing IT-enabled projects. Why? What can managers do about it? That¡¯s the subject of this paper. I believe the problem stems from senior and project management failing to take three steps: (1) assess the risks of the change up front (the most serious are the changes needed in the business, not the changes in the technology), (2) mitigate the causes of highest risk at the front end and as the project progresses, and (3) adjust the method of managing the project to minimize the remaining risks. This assess-mitigate-adjust approach aims to work down the risks over a project¡¯s lifecycle and thereby increase the chances of success