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 failure. A recent summary estimated that 30 to 70% of IT projects aimed at process improvement do not live up to expectations. This echoes early research on IT project implementation. With major IT-enabled process changes, involved in ERP, CRM, and SCM projects, major delays and overruns can result in missing revenue and profit targets for firms. Over the years the stakes have grown but business still has problems in managing IT-enabled projects. This paper addresses why and what can be done. It is argued that the problem stems from senior and project management failing to take three steps: (1) assessing the risks of the change up front (the most serious are the changes needed in the business, not the changes in the technology; (2) mitigating the causes of highest risk at the front end and as the project progresses; and (3) adjusting the method of project management to minimize the remaining risks. This assess-mitigate-adjust approach aims to minimize the risks over a project's lifecycle and thereby increase the changes of success.