IT Disasters: A Root Cause

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BPTrends – July 2007

Written By: Geary Rummler, Alan Ramias

In our first column we wrote about the huge, costly failures of IT systems development projects, citing some of the disasters we saw personally or had read about recently. But we figured there were more – bigger and badder than any we had uncovered in our decidedly unscientific research. And, sure enough, an alert reader wrote us to point out two more appalling cases of our tax dollars being burned away:

  • One was an attempt to replace the aging FAA air traffic control system, stopped after $4.5 billion had been spent, of which only $75 million was salvageable for local airports. The project was then restarted, and the current estimate of costs has grown to $51 billion (from an initial estimate of $12 billion).
  • The other was a project to modernize the IRS system to process tax returns. Started in 1985 and running for 10 years, the project was stopped. More funding was then obtained, and another effort began in 1998 to process simple tax returns – for a cost of $8 billion.

These incidents, and others, were also cited in a recent book, Dreaming in Code1, that attempts to elucidate – from a programmer’s viewpoint – why these things continue to happen. The viewpoint that interests us, however, is that of the business leader who, after all, is paying for these failures.

We believe that a big part of the failure to choose and implement technology effectively is traceable to not understanding the nature of the organization in which the technology is to be used. The purpose of technology is to enable human performers to do their work or to replace manual work with automation. What is being enabled or enhanced are business processes. So it follows that if an organization’s business processes are not well defined, designed, and managed, then the technology that enables them is going to be an imperfect fit at best. How can rational choices about technology be made without a deep understanding of how work is performed in a given organization and how best to monitor, manage, and guide that work?

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This article is Part 2 of a 3-part series about IT. For the other parts:  Part 1, Part 3.

For a presentation on the IT-Business Gap, click here.

For information about our consulting services to help organizations better bridge the IT-Business gap, click here.

For information about our consulting services to help organizations with IT Department transformation, click here.