The Responsibility of Business and Information Systems Engineering in Large-Scale IT Projects

Abstract

The failure of IT projects has been subject to discussions for decades. For example, magazines report on historical failures of IT projects in the U.S. (Zeitler 2008), consulting firms analyze the failure of large-scale IT projects (Richter et al. 2008), and also science provides detailed studies about failures in selected major IT projects in Germany (Mertens 2009). Often, the so-called CHAOS report is used as a starting point for such analyses: according to this report, currently 24% of IT projects fail, 44% are considered to be challenged, and only 32% are successful (Eveleens and Verhoef 2010). From the perspective of business and information systems engineering (BISE), however, it is necessary to critically question the findings of the CHAOS report. The definition of “success” either remains unclear, or – if carried out – only the successful completion of the project’s implementation is assessed. However, it is not examined whether the project also helps to achieve the company’s objectives. This debate is not new. Already in 1998, Peter Mertens presented 15 theses in which he ultimately claimed that these analyses should focus on the overall objective of increasing corporate value, and derived what should actually be the proper goals of BISE. And yet there is still no single, accepted definition of when an IT project is to be considered a success. Against this background, the prudent scientist would do well to be careful with such general quantitative studies. Although the way of measuring success is controversial, it can be observed that still many large-scale IT projects face enormous problems or even fail. The direct and indirect effects are often dramatic and sometimes even threaten the existence of companies, as the following examples illustrate: In the first half of 2004, the supermarket chain Sainsbury’s had to record a profit decline of 88% compared to the previous year, after they failed to launch a new IT system. The new supply chain management system had proved inadequate so that the company had to let employees carry out processes instead of automating them. A total of 791 million U.S. dollars had to be charged off; Sainsbury’s decline to the third place in the British market has been blamed in large parts on the failure of the project. Toll Collect’s approach to establish a new system for track-based toll collection in Germany failed with great publicity effect with the termination letter from the Federal Transport Minister, stating that the offer is technically, legally, and economically unacceptable. This was preceded by months of quarrels due to numerous failures and ever-new delays. The system went live in early 2005 with a total delay of 16 months and limited functionality. On July, 29th 2005 the federal government therefore brought an action against the toll consortium and raised claims of 5.1 billion Euros. The dispute lasts until today. One of the largest IT projects in Europe with an estimated cost of up to 5.4 billion Euros, extensive requirements regarding data volume and protection is the introduction of the electronic health card in Germany. It was originally intended to replace the health insurance card on January 1st 2006 and now is several years behind schedule. The resulting loss of confidence of the public towards politics is enormous. Hence, the Chaos Computer Club summarized a study by Booz-Allen-Hamilton with the following words (translated): “In the best tradition of state-run large-scale software projects, another extremely expensive prestige project is consciously being approached here, the benefits of which are in no reasonable proportion to the risks and foreseeable problems. A first look at the data points to a massive explosion of costs through the introduction of the health card and to another technological disaster.” Such large-scale IT projects are likely to cause problems in future as well. Both, the increase in IT penetration of virtually all areas of life and their increasing interconnectedness, can be expected to increase the level of IT investments and the size of IT projects. This would also, unless countermeasures are taken, involve a higher number of failing projects, including – as mentioned above – huge tangible and intangible damage. Without a thorough performance analysis, largescale projects therefore continue to fail. Here, BISE as an interdisciplinary field of research is required to contribute to more success. In a first step, the following questions must be answered: