Most projects fail to create information technology value. That’s the cold, hard fact.
The single greatest area of capital investment in business today is information technology, but very few seem to know how to do it right. In fact, fully 80% of IT projects fail to meet expectations. Sadly, that has been true for as long as there has been IT.
It is hard to create value doing anything with a 20% success rate. There is IT investment – lots of it; but there is very little return. It is no wonder, then, that information technology value remains elusive.
The history of IT investment follows a long-term cycle of boom and bust. The booms are driven primarily by the availability of new technology and its promise – not by track records of success. For example, the tech bubble of the late 90’s was driven by the promise of Internet, not its fulfillment. When potential failed to translate into tangible results, the bubble burst. Disenchanted investors took their money elsewhere, and a bust resulted.
While the most visible example of this boom / bust pattern, the Internet bubble is not the only one. Other IT innovations have gone through the same cycle. The PC itself is a good example. Organizations rushed to invest in PCs and PC software, but lack of information technology value led to a bust in the early 90’s that today is largely forgotten.
Similarly, ERP, CRM, BPR, RFID, and a vat of IT alphabet soup have all become the darling of IT departments at one time or another – only to lead to low returns and investor disenchantment.
Why is that?
Why is information technology value so elusive?
What most people do not realize is that the Internet bubble of the late 90’s was a grand success – at least from a technological viewpoint. An amazing amount of infrastructure was put in place: Broadband cable, switches, server hardware, system software, programming tools, domain registrars, web designs, search engines, hosting companies… it was all there. And it all worked remarkably well.
It’s just that very few people used any of it.
The Internet had the potential to change people’s lives, but nothing could happen until people were ready to change their behavior.
“ What most people do not realize is that the Internet bubble of the late 90’s was a grand success – at least from a technological viewpoint. It’s just that very few people used any of it."Behavior change has always lagged technology change. The television, radio, telephone, and telegraph industries all went through the same initial bubble / bust pattern. They all fell victim to the slowness with which people will accept change and modify their behaviors to embrace it. They were all technical successes, but business failures.
Simply put, creating value from innovative technology is never about the technology – not really. It’s about behavior change; as impressive as it might be, the technology is always the easy part. It is always easier to change technology than it is to change the behavior of real human beings.
IT enables organizations to do business in ways that are faster, cheaper, and better, but until real human beings embrace the technology its potential cannot be realized. Behavior change is the key. Managing the organizational change necessary to capitalize on new technology is the key to creating real information technology value.
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