Do We Need to Know Exact Cost of Failed IT Projects?

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My post from last week on IT project failures gave a prominent shout-out to Roger Sessions, chief technology officer at ObjectWatch Inc., and author of "Simple Architectures for Complex Enterprises." He's gotten a lot of recent attention in the blogosphere with a white paper in which he estimates the annual cost of failed IT projects at an astronomical $6.2 trillion.


Among those who disagree with Sessions' methodology is IT Business Edge contributor Dennis Byron, who came up with a far lower $500 billion estimate for the annual cost of failed IT projects when he crunched the numbers. You can make your own judgment -- and see those of others, including bloggers Michael Krigsman, Leo de Sousa and Todd Williams -- by downloading Sessions' white paper, which is titled "The IT Complexity Crisis: Danger and Opportunity."


Writing on ZDNet, Michael Krigsman this morning highlights another critique of Sessions' numbers, this one by IT consultant Bruce Webster. Krigsman shares Webster's key points and knocks him a bit for not providing numbers of his own. Reworking Sessions' original numbers using different assumptions -- as Byron did in his post for IT Business Edge -- would be "a worthwhile project," writes Krigsman.


Not being a natural numbers person, I'm a little frustrated by all this wrangling over the precise cost of IT failures. As Sessions wrote in a comment on my post:


I hope readers don't get overly focused on the exact cost of the IT failure. The much more important message is that what we are doing today is not working. We can either continue doing what we are doing even though it isn't working (the traditional definition of insanity!) or start doing something else.


One thing I think we can all agree on, the cost (whatever it is) is too high. Focusing narrowly on the numbers is an interesting mathematical exercise, but I worry it could divert attention from actually solving some of the problems that commonly wreck IT projects. Sessions certainly hits on a serious one: projects that are just too large and complex to succeed.


A main impetus of Agile software development is to reduce complexity, which is why more companies are using some form of Agile for their tech implementations. IT Business Edge parent Narrowcast Group recently switched from a traditional waterfall development process to a modified Agile one. We posted our new project development process in our Knowledge Network earlier this month.


Krigsman makes a fine point, however. Coming up with a model that would more accurately quantify the cost of IT failures should reveal some of the more common causes of IT failure and help companies make smarter IT investments.