Government’s ICT Project Failure Factors: A Revisit

Haslinda Sutan Ahmad Nawi1

Azizah Abdul Rahman2 Othman Ibrahim3

Faculty of Industrial Information Technology1 Universiti Selangor, Selangor, Malaysia

Faculty of Information Systems & Computer Science2,3 Universiti Teknologi Malaysia, Johor, Malaysia

haslindasan@unisel.edu.my1, azizahar@utm.my2, othmanibrahim@utm.my3

Abstract— Successful implementations of Information and Communication Technologies (ICT) projects act as strong foundations supporting government transformation programmes. The aim of this research is to revisit the failure factors linked to certain government’s ICT projects. The study analyzes the current gap between failure factors in Malaysian government agencies (practice) as compared to the literature consulted (theory). Project management factors and process factors are the two major factors that contributed to ICT project failures in the Malaysian government. We believe that this finding should be studied further.

Keywords- government’s ICT project; ICT project failure factors; ICT project evaluation

I. INTRODUCTION A government is a huge and complex organisation, which

operations and strategic focus could be greatly enhanced by ICT application which is well focused, in order to support improvements in productivity, management effectiveness and ultimately, the quality of services offered to citizens [1]. During the last decade, the public sector has globally embarked on a wide range of reforms and witnessed a growth in the number of government transformational projects. ICT initiatives is one of the complex change efforts that is intended to use new and emerging technologies to support a transformation in the operation and effectiveness of a government. Reference [2] supports the idea of ICTs having the potential to transform government structures and to improve the quality of government programs and services. Prior studies as in [3] mentioned many national, states, and local governments struggling to make better decisions about ICT investments as part of their transformation agendas. Organizations in the public sector too are increasingly seeking new tools to ameliorate their performance and provide better services to their citizens. For example, [4] contended that many governments around the world are greatly supporting the electronic delivery of public services to the citizens and the enterprises, enabling them to make most of their transactions within the government via electronic channels, i.e. E-government.

The Malaysian government has so many strategies to realize

their government transformation programme and ICT is one of

the key areas that support that programme. Thus, there will be many ICT projects introduced by the government to support their transformation initiative. For that reason, it is crucial to ensure that the ICT projects are successfully implemented. The Prime Minister of Malaysia, on 15 October 2010, announced the enhancement of ICT as the first strategy of the allocated RM119million 2011 budget. In addition to that, the 10th Malaysia Plan (10MP), clearly articulated the central role of ICT as a foundation for the nation to vault forward towards a high-value economy. In line with that, Malaysia’s government had listed ICT as its 12 National Key Economic Areas (NKEAs) in the new economic model (NEM) that intended to build the foundation for 10th Malaysian Plan. This translates to ICT playing a key strategic role as an enabler of national infrastructure, education and human capital development for the NEM. With this government’s target for making all services available electronically by 2015, pressure is increasing to address the causes of failure in ICT projects.

This paper considers perceptions of senior officers who manage and monitor ICT projects in government agencies. The study analyzes and identifies the failure factors of ICT projects in the Malaysian public sector as a lesson learned in order for the it to deliver effective service to the citizens through the implementation of ICT projects.

II. LITERATURE REVIEW

A. Definition ICT Project Failure Despite great efforts by project management professionals in

developing and implementing standards, process models, methodologies, and guidelines on best practices for ICT project management, the failure rate of ICT projects continues to be high. A survey in 2005 discovered that 31% of Information Systems (IS) projects failed to deliver on time and another 31%, within budget [5]. Furthermore, a study by Ernst & Young in the Czech Republic in 2009 revealed that more than 50% of IS projects were not finished on time or on budget. 5% of the projects were stopped before they were even completed.

Considering assessing the success or failure of ICT projects is somewhat subjective, [6] categorize different levels of project failure as below;

• Total Failure: An ICT project which has ended up as not being implemented, or a new project that has been implemented, but eventually abandoned.

• Partial Failure: Major goals of the ICT project have not been attained or significant undesirable outcomes are experienced. A reasonably clear form of partial failure is sustainability failure where a project succeeds initially, but then fails after a year or so.

• Success: An ICT project attains its major goals and does not experience significant undesirable outcomes.

Another survey conducted by [7] shows around one-third of

IT projects were classified as successful in its studies in 2004, 2006 and 2009 (see Figure 1) and the failure rate of IT projects has actually increased further since 2004.

Average Cost Overrun: 45% Time Overrun: 63% Functionality Delivered on Average: 67%

Figure 1: Project Success Rate [7]

The Standish Group categorizes projects into three resolution

types; • Successful: The project is completed on time and on

budget, with all features and functions originally specified.

• Challenged: The project is completed and operational, but over-budget, over the time estimate, and with fewer features and functions than initially specified.

• Failed: The project is cancelled before completion or never implemented.

While [8] has several ways to define the successes or failures

of a project: • The project met its scope, time and cost goals. • The project satisfied the customer or sponsor. • The results of the project met its main objective.

B. ICT Projects Failure Factors A number of studies have dealt with the concept of success /

failure factors in ICT projects, and some different types of models have been established. Reference [9]’s survey, conducted in 2000, of close to 100 respondents associated with a major project failure in Singapore, grouped failure factors into three organizational categories as below;

• Context-driven: factors dealing with culture, leadership, and organizational issues.

• Content-driven: factors related to technology and business process, the ―what and the ―how.

• Process driven: factors related to strategic formulation and change management or under the influence of the project manager.

A different approach has been used as in [10]. They

categorized the framework as consisting of four quadrants: • Customer: focuses on risk factors relating to customers

and users. These factors are often beyond the project manager’s control.

• Scope and requirements: focuses on risk factors associated with a project manager’s inability to judge a system’s scope.

• Execution: focuses on such risk factors as inadequate project staffing, inappropriate development methodology, failure to define roles and responsibilities, and poor project planning and control.

• Environment: focuses on risk factors in both internal and external environments, including changes in organizational management.

Reference [11] who studied the cause of problems with the

Dutch government’s ICT projects categorize factors that could affect the project in threefold;

• Political complexity. • Organizational complexity. • Technical complexity.

Reference [12] in his study, believes that any symptom of a

project failure should belong to one of the 6 generic types of IT project failure root causes: project management factors; top management factors; technology factors; organizational factors; complexity / size factors; and process factors as in Figure 2 below;

Figure 2: IT Project Failure Root Causes [12]

All 4 approaches focused on the domain of IS and ICT project. Research on IS and ICT failure phenomena has been conducted in diverse perspectives. Reference [13] agreed that a fundamental reason that causes IS projects to fail is that they are too complex. Because of the complexity, projects must handle its complexity factors and also other major factors such as technological, organizational, top management and project management. In addition, [14] opined a process failure occurs when an IS cannot be developed within an allocated budget, and / or time schedule. Considering all these factors, the study adopted IT project failure root causes proposed by [12].

C. Government’s ICT Project Scenario While the benefits of ICT in a government cannot be

disputed, there are several concerns about its success as well as the strategies to be adopted in implementation of systems in various countries. In recent global history, studies show that managing projects are challenging as it is. There are many projects that fail due to various reasons. Putting ICT initiatives into practice is not easy, in fact, according to [15], majority of e-service implementation in developing countries fail, with 35% being classified as total failures (e-government was not implemented or was implemented but immediately abandoned), and 50% as partial failures (major goals were not attained and or there were undesirable outcomes). Reference [16] found that, most large IS projects will exceed their original budgets and timelines by more than 50%, and much more often in government than in private industry. In addition to that, there are evidence that “runaway” projects occur frequently, and new empirical evidence that they occur more often in government organization [16 & 17]. Reference [18] concluded that successful deployment of IT solutions in public organizations relies, among other factors, on the presence of clear IT strategic goals and on the efficient integration of IT into government organizational development. Furthermore, in their studies, the findings indicated clearly that the success or failure of such projects is caused by the role of top management rather than technological issues.

As ICT projects are renowned for their high failure rate, in

Malaysia, the government has recognized the problems related to the successful development of ICT systems, especially software projects. In the Malaysian public sector, the implementation approaches of the ICT projects handled are: in-sourcing (internal personnel and expert); outsourcing (external services); and co-sourcing (external services with internal expert). Subsequently, the types of the ICT project are; ICT research; ICT strategic plan; application system development; hardware and software procurement; ICT system enhancement; expansion of ICT system; and ICT compliance and fortification. According to the Attorney’s report in 2006, customs spent RM 290 million for underutilized systems and as a solution, they have appointed Deloitte Consulting firm to prepare a plan worth RM 451 million to overcome this problem [19]. The Ministry of Health has also invested in ICT for the MyHealth project but resulted in the project being extended from 2007 to 2012 [19]. This shows that

organizations must have proper planning in IT investment. Hence, highlighting IT governance practices by realizing the advantage of deploying IT governance model is crucial in order for the Malaysian public sector to retrieve competitive advantage and thus decrease the rate for IT project failures [20].

Meanwhile [21] puts an emphasis on a systemic approach to

project success or failure. This means that the ICT projects have to be aligned with business strategies, and the project portfolio management also needs to be adapted to the organizational strategy and culture. The Malaysian public sector should pay attention to focusing on the selection and management of a set of projects that meet specific government strategic objectives towards effective service delivery to its citizens. Reference [20] in their studies found that the proposed ICT project should be evaluated and prioritized according to several criteria such as alignment with ISP, alignment with NKRA (National Key Results Area), alignment with organization’s vision, mission and objective, and budget approval by the government.

III. METHODOLOGY The research methodology being used in this research was

qualitative method. Analysis of the factors contributing towards the ICT projects failure is the subject examined in this research. Three steps were involved in this study.

A. Literature Review The researchers identify the failure factors from the literature.

The study only focuses on application system development and ICT system enhancement projects. For this reason, the study adopted the six generic root causes [12] that is believed to be highly suitable for the application system domain.

B. Interview 6 respondents from the Malaysian public sector were

interviewed - 4 of the respondents were the senior officers who managed and monitored ICT projects for the past 10 years. Another 2 respondents were officers who have had more than 5 years experience in monitoring the ICT projects. Data were interpreted based from the respondents’ experience and example given during the interview sessions. To assure consistency, the study adopted the failure definition used by the Standish Group. The Standish Group categorizes projects into three resolution types which are;

• Successful: The project is completed on time and on budget, with all features and functions originally specified.

• Challenged: The project is completed and operational, but over-budget, over the time estimate, and with fewer features and functions than initially specified.

• Failed: The project is cancelled before completion or never implemented.

C. Data Analysis From the interview, the responses gathered were classified to

the identified failure factors from the literature. The methodology use in this study is summarized as in Figure

3.

Figure 3: Research framework

IV. RESULT AND DISCUSSION The result of the research contributes to the identification of

21 failure factors which influenced the ICT projects of the Malaysian public sector. These sub factors were re-classified into 6 main factors: project management factors; top management factors; technology factors; organizational factors; complexity / size factors; and process factors.

A. Project Management Factors The issues of not meeting the user requirement were common

issues arising in most of the projects. One of the respondents said that, it is caused by the failure of the vendor to get user involvement in the project. In some cases, different officers were assigned for the same module and this made it difficult for the vendor to get a consistent cooperation.

Controlling and managing risk in ICT projects is considered to be a major contributor to project success. Not managing the project risk until it becomes a problem was also highlighted by the respondents as a major cause of project failure. One of the examples given is that the project was behind schedule because the vendor could not deliver the product due to shipping problems. A better risk management, as a project and organizational capability, is critical for the ICT project success in the public sector environment.

Other than that, underestimating the complexity of the project task and activities also leads to more resources required to resolve the resulting issues. Furthermore, inadequate project planning causes a delay in project implementation, which resulted into inappropriate systems with outdated design and obsolete technology.

Another common occurring issue is when either side fails to adhere to the contract during the project as a result of inadequate resource or contract management or change control processes. An example of this is, the vendor agreeing to take on extra work, out

of scope of the original contract, without the time or resources within the contractual allocation to actually deliver.

Most of the Project Managers had no project management skills and sometimes, no appropriate ICT background. Sometimes, not only the project manager but the entire team has weaknesses in managing ICT projects. Some project managers still fail to make good project managers despite having IT background. In addition to this, another common scenario is the failure to involve the right people for the project because of ‘office politics’ during the project implementation. An example of this is favouritism, where the selected person is the favorite person of the person in charge of the department.

B. Top Management Factors It is vital for senior management to be supportive of a project

and to provide the necessary resources to carry it out. However, inappropriate ICT knowledge, lack of familiarity, and background among the top management who were selected and decided on the project with the target technologies will cause inaccurate decision and eventually contribute to the project’s failure.

C. Technology Factors The developers fail to align the system design and technology

used with the current technology, which resulted into inappropriate systems with old design and obsolete technology. This always occurred with the overextended schedule project. Apart from that, low quality of the end product is also mentioned during the interview. This relates to the technological factors and the fact that the person responsible and accountable not possessing appropriate ICT background. Another complicating technological factor is that ICT systems often have to be connected to other systems already in operation. Compatibility between ICT systems – already a major issue within a single agency – becomes especially challenging where a number of agencies are involved.

D. Organizational Factors The average cost of a project has been cut by the government

due to the economy downturn scenario. In other cases, there are agencies or the project champions which did not accurately complete the project cost estimation which resulted to budget overruns.

E. Complexity / Size Factors Size and complexity of the projects also cause delay and

frequent budget overruns. The number of agencies involved is too high and it becomes complicated because their business processes are related and require exchange of information. Central steering of the project is difficult or sometimes even impossible in these cases.

F. Process Factors Project was given without any prior feasibility study, due to

no project selection process. In addition to that, two respondents said the selection of the project is not based on government strategic plan such as the NKRA, NKEA and etc. They also

mentioned that while selecting the project, the government doesn’t have an appropriate ICT project evaluation process. The respondents also highlighted that one of the causes of project failure is that no business process reengineering (BPR) takes place before the project starts although the project is big and complex. Other than that, there is no standard methodology used during the project execution. The projects always depend on the vendor’s methods of project management and execution. As a result, it is difficult to monitor the project.

In several projects, the vendor didn’t get user involvement especially during the user acceptance test. As a result, users did not use the system after it has been implemented. This happened due to the systems not meeting their requirements and work process. In addition to that point, the users complain that the vendor failed to follow their expectations.

The classified and identified failure factors are as depicted in

the Table 1.

Table 1: Classified Failure Factors

Identified Failure Factors from the

Literature Classified Failure Factors from the Field

1 Project

Management Factors

1 Lack of user involvement.

2 Mismanaging of project risk.

3 Inadequate estimation of work.

4 Breaching of contract.

5 Lack of project plan.

6 Lack of skills and knowledge in project management .

7 Inadequate ICT background for Project Managers.

2 Top

Management Factors

1 Incompetent in making decision on selecting ICT projects.

3 Technology

Factors

1 The design and technology used not inline with the current technology.

2 Low quality of the end products.

3 Low or no compatibility between new system and the existing systems.

4 Organizational

Factors

1 Reduction of Project Cost.

2 Inadequate cost estimation.

5 Complexity / Size Factors

1 Project too big and complicated (ambitious).

6 Process Factors

1 No feasibility study conducted.

2 No project selection process carried out.

3 No BPR process conducted.

4 No standard methodology in place.

5 End user does not involved in user acceptance process.

6 User requirement not met.

7 No systematic and appropriate project evaluation process.

V. CONCLUSION From the findings, the failure factors were classified into the

six generic types of IT project failure root causes by [12]. This means that such factors are not unique to the Malaysian government, yet it must be considered in future in managing ICT projects. However, major factors are focusing on the project management factors and process factors. Project management factors are currently being solved by the government by adapting a standard project management life cycle. The authorities are also in the process of educating the ICT project managers in the public sector by providing internal workshops on project management. The process factors are currently less addressed by the authorities and require further research where we will consider in our further investigation. Within that process factor, two of the interrelated subjects that could be the issues that need further investigate are the absence of a project selection process; and the need for a systematic and appropriate ICT project evaluation process to be in place. In addition to that, top management factors reported that there are inappropriate ICT knowledge, lack of familiarity, and background of ICT among the top management who selected and decided on the project with the target technologies. Furthermore, [20] supported that there is no specific IT governance practices model for IT project approval and implementation in the Malaysian public sector. This means that it is necessary to pay attention to the way ICT projects were selected in the public sector.

However this study only involved 6 respondents who are Malaysian government officers. It identified failure factors that will be associated and related to our next investigation on sustainable e-service.

ACKNOWLEDGMENT I would like to thank the editors and reviewers for their

suggestions on this paper. Their comments helped to make this a better piece of research.

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