A recent study of IT projects managed by various IT companies showed that nearly 15% of all software development projects get cancelled. This figure makes IT projects cancellation an important area of a company’s risk management plan. Whilst the impact of the project cancellation will vary from one company to another, it is undeniable that the mismanagement of project cancellations will make a bad situation worse and will have direct implications on the operational and sometimes strategic plans of an organisation.
At a high level, managing a project cancellation should ensure three outcomes. First, the organisation’s operations must remain unaffected. Second, the organisation’s reputation must remain unaffected. Finally, lessons must be learned from the situation in order to minimise the likelihood of it reoccurring in the future. These conditions are referred to as operational containment, credibility restoration, and organisational learning.
But what can your company directly do in the aftermath of a project cancellation to mitigate various risks? Iacovou and Dexter (2005) propose an 18 point plan to help an organisation deal with the cancellation of a project. Out of these 18 points, 10 are crucially important.
1. Prepare a communication plan: Communicating the cancellation decision to all affected parties should be your first course of action. Make sure you clearly explain the rationale and implications of the cancellation and advise all parties of any remedial plans. It’s also important to be as clear and honest as possible; this will dissipate any rumours and finger pointing and will highlight your and your company’s professionalism. If necessary, a senior executive should be involved in this communication effort.
2. Perform a post-mortem audit: In order to find the causes behind the project failure and learn from the mistakes made, a post-mortem analysis by an unbiased party is very important. This analysis should examine the views of senior-level managers, project team members, users, internal audit staff, and external reviewers and assess project performance against objectives and expectations.
3. Form a contingency plan jointly with the sponsor: If a contingency plan does not exist, work closely with the senior business executives and the system owners to formulate an action strategy to address the original need for the project. Reassess the business case of the project. If a solution is still needed, identify alternative ways to satisfy the business need. Although time pressures may be high and budgets low, treat this as a brand-new project and consider several options (e.g. previously rejected package solutions, delivering a downscaled project) before making any decisions.
4. Modify the current development process to reflect lessons learned: Following the post-mortem audit findings, determine what changes need to be made to the existing development process, practices, methodologies and tools in order to insure that past mistakes are not repeated. Use Total Quality Management (TQM) and benchmark your technical standards and methods against industry leaders. This decreases the risk of future failures and demonstrates the commitment of IT.
5. Reflect on your own role and responsibilities: You need to understand your role in the project’s set of complex relationships and activities. You can exert the greatest control over your own actions (as opposed to the actions of others). Understand your strengths and identify ways to address your weaknesses and gird yourself for the next project (there will always be another one).
6. Ensure continuity of service: It is critical to not let the failure overwhelm the IT department. IT professionals must maintain control and not let the department fall apart. The IT staff must show that they are still capable of and committed to delivering service to users and management. This will insure that the professional image of the department is maintained and its ability to work in difficult circumstances appreciated.
7. Provide staff counselling and appropriate new assignments: Always remember that project team members have invested a lot of time and energy into the failed project. As a result, many of them will feel guilty, frustrated, or vulnerable. Therefore, make sure you provide these employees with means to express their feelings. Career counselling should also be provided, if needed. Also, it is of paramount importance that you emphasise to deserving members their importance and value to the organisation. When possible, reassign these members to new projects as soon as practically possible.
8. Learn from mistakes: The project manager must be forthright and honest. If appropriate, the manager must take responsibility for any mistakes. Stonewalling and smoke screening will not help his/her situation or the organisation. This may be difficult, but over the long-term the manager will be better off.
9. Review related project decisions and long-range IT plans: Failure of a project can impact other project plans and corporate IT strategy significantly. Examine if other projects rest on the success of this cancelled one. Review and re-evaluate project resource allocation decisions and long range IT plans that may be affected by this dramatic change.
10. Determine responsibility of vendors: If outside vendors and/or consultants were involved, determine the extent of their responsibility for the project cancellation. Negotiate with them to receive some form of damage payment if they are responsible. Consider legal action if a serious breach of contract occurred.
References:
Iacovou, C. L., & Dexter, A. S. (2005). Surviving IT project cancellations.Communications of the ACM, 48(4), 83-86.