Advice about IT projects from 2,000 years ago: Count the Costs!
Advertisements for inexpensive software and app development populate the internet. A quick search will immediately identify offers like “Fast, affordable app development,” “Software development, save up to 70%,” or “Develop your Business App for $50,000.” Software development projects are exciting and rich with opportunity and potential. The thrill makes the low-cost development offers even more attractive.
The excitement is real–so is the risk. Unfulfilled promises, partially completed projects, dysfunctional software, and unusable applications are often the norm, not the exception. These failures often frustrate business leaders–once bitten, twice shy. Negative experiences engender caution and fear and leave business technology strategies weak and ineffective.
So how does the physician Luke advise executives approaching a development project? Count the cost, he admonishes.
“Which one of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, saying, this man began to build, and was not able to finish.”
Luke 14: 28-30
Luke outlines five powerful considerations before launching an IT or software development project in this short paragraph.
- Intent and Vision
- Planning and Cost Analysis
- Laying a Solid Foundation
- Execution and Follow-through
- Reputation and Accountability
1. Intent and Vision
The passage begins with “intending to build a tower”, which underscores the importance of having a clear vision or goal. In software development, this aligns with defining the project’s purpose and objectives. What problem does the software aim to solve? What value will it bring to users? Clear intent guides every subsequent step.
2. Planning and Cost Analysis
The phrase “sitteth not down first, and counteth the cost, whether he have sufficient to finish it” emphasizes thorough planning and resource assessment. Before starting a project, teams must:
- Scope the project: Define deliverables, timelines, and milestones.
- Estimate resources: Determine financial, human, and technological resources needed.
- Risk management: Anticipate potential challenges and prepare mitigation strategies.
Failure to properly plan often leads to projects running out of resources, mirroring the builder’s inability to finish the tower.
3. Laying a Solid Foundation
The idea of “laying the foundation” corresponds to the importance of starting with a strong base:
- In technology, this could mean robust architecture design, choosing the right frameworks, or establishing solid infrastructure.
- Neglecting foundational elements often results in unstable systems that are costly to fix later.
4. Execution and Follow-Through
The warning “lest haply, after he hath laid the foundation, and is not able to finish it” points to the importance of consistent execution. In software development:
- Iterative progress through methodologies like Agile ensures steady advancement.
- Tracking progress and maintaining stakeholder alignment helps avoid scope creep or resource depletion.
5. Reputation and Accountability
The passage closes with the potential embarrassment of failing to complete the task, saying, “all that behold it begin to mock him.” In technology, failed projects can damage a company’s reputation, lower team morale, or erode stakeholder trust. It’s a reminder that delivering quality results on time is critical for maintaining credibility.
Summary
These ideas remind us of the necessity of:
1. Clarity of purpose: Why the project exists.
2. Comprehensive planning: Ensuring all costs (time, resources, risks) are accounted for.
3. Strong foundations: Designing and building with care from the start.
4. Diligent execution: Avoiding abandonment through consistent follow-through.
5. Outcome focus: Protecting reputation by striving for completion and quality.
This biblical wisdom can be a timeless guide to successful project management.
Costs are more extensive than money, and risks could be devastating. Failed IT projects can result in a wide range of issues for organizations, impacting their financial health, their reputation, operational efficiency, and overall strategic goals. Here are some of the specific problems associated with failed IT projects:
- Financial losses
- Operational disruptions
- Reputation damage
- Employee morale and turnover
- Data and security risks
- Lost competitive advantage
- Negative impact on strategic goals
- Legal and regulatory consequences
- Post-failure recovery costs
Let’s briefly review each of these costs.
Financial Losses result from cost overruns, wasted resources, and opportunity costs.
Failed projects often experience significant budget overruns due to poorly managed resources, unanticipated complexities, or continual changes in project scope. Investments in software, hardware, licenses, and personnel can become sunk costs, leading to financial waste and lost ROI. Resources allocated to a failed project could have been used for other initiatives that might have delivered value, causing a loss of potential revenue or market opportunities.
Operational Disruptions can result in downtime, productivity loss, system instability and delayed delivery.
Failed implementations can disrupt critical workflows and reduce productivity, especially if employees are forced to revert to outdated or manual processes. Incomplete or poorly executed projects may leave operational systems unstable, vulnerable to outages, or incompatible with other systems. When projects fail to meet deadlines, it can delay the delivery of services or products, impacting customer satisfaction and internal processes.
Reputation Damage occurs with customer dissatisfaction and loss of stakeholder trust. The result is a bruised image and brand.
Customers may lose confidence if they experience service disruptions, quality issues, or unfulfilled promises due to IT project failures. Failed projects can damage stakeholders’ trust in the organization’s ability to execute, potentially impacting future funding, support, or collaboration. Publicized project failures, especially cybersecurity breaches or data losses, can severely impact an organization’s brand reputation.
Low employee morale is born of employee frustration. Low morale results in increased turnover and reduced productivity.
Employees involved in the failed project may feel demotivated, especially if they invested significant time and effort only to see the project fail. Persistent failures and frustration with ineffective systems or processes may lead skilled employees to seek opportunities elsewhere. A failed project often leads to increased workloads, as employees may need to manually perform tasks the technology was intended to automate, resulting in burnout and reduced productivity.
Data and Security Risks increase vulnerability, cause data loss or inaccuracy, and can result in compliance violations.
Unfinished or improperly integrated systems may leave gaps in security, increasing the risk of cyber-attacks, data breaches, or compliance violations. Failed data migrations or poor data management can lead to data loss and inaccuracy that impact reporting, decision-making, and regulatory compliance. The organization may face legal action, fines, and penalties if a project fails to meet regulatory standards (e.g., GDPR, HIPAA).
Lost Competitive Advantage is the result of missed market opportunities and stagnation.
Failed projects can cause an organization to lose its competitive edge, especially if it lags behind competitors in adopting new technologies or enhancing service delivery. Without successful IT initiatives, organizations may struggle to innovate or optimize operations, resulting in stagnation or market share loss.
Negative Impact on Strategic Goals occurs from misaligning business objectives and project portfolio imbalances.
Failed IT projects often reveal poor alignment between technology initiatives and organizational goals, making it harder for the organization to achieve its strategic objectives. Failed projects can throw off an organization’s overall project portfolio, skewing resources toward “rescue missions” rather than focusing on projects that align with core business strategies.
Legal and Regulatory Consequences can include contractual disputes, litigation and fines, and loss of intellectual property.
If an IT project fails, there may be disputes with vendors or partners over breached contracts or unmet deliverables. Organizations may face lawsuits from clients, vendors, or other stakeholders if failures result in financial harm, data breaches, or regulatory non-compliance. Failed projects may expose intellectual property to risk, especially if proprietary processes, code, or ideas are improperly managed or discarded.
Post-Failure Recovery Costs result from project rework or redesign, system repairs and patching, and process redefinition.
Organizations may incur additional costs to salvage or restart the project, often requiring new personnel, resources, or tools. Fixing broken or incomplete systems can be costly and time-consuming, especially if significant rework is needed. The failure of one project often requires an overhaul of project management processes to prevent similar issues, which can involve retraining, tool acquisition, and policy updates.
In summary, inefficient IT projects are costly, risk-prone, and demoralizing, with negative impacts that can ripple across the organization, affecting finances, employee morale, and strategic positioning. Organizations can improve project outcomes and enhance their overall performance and resilience by addressing inefficiencies through proper planning, stakeholder alignment, and robust project governance.
Business executives would be well served to use a Business Technology Assessment to help them count the cost and make the best decisions on a technology strategy. Other resources on this topic include:
- Blog outlining, discussing, and diagnosing some of the iconic technology failures
- Blog outlining criteria for selecting a technology partner for your strategic planning and execution process
- Self-diagnostic survey regarding your strategic technology readiness
- Presentation of the 9 elements in the Strategic Framework used by STG
Discussing your goals, priorities, and questions may be advantageous for a serious business technology strategy.