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It is estimated that more than 80% of IT (Information Technology) projects often are behind schedule as well as having cost overruns. This is especially the case with large IT projects that involve multiple stakeholders and take a lot of time to complete. There are many reasons for this situation and they range from not involving all the stakeholders at each stage or phase of the project, not getting the requisite signoffs from the clients, scope creep, and not staffing the team with the desired skills, and the fact that large IT projects need top and middle management monitoring and involvement.
The key aspect here is that large IT projects need exceptional coordination and communication and these calls for multiple project managers and a program manage who is responsible for the overall project.
In other words, since there are multiple interface points with external and internal stakeholders, there is a need for dedicated managers and project leaders for each customer touch point and each internal stakeholder interface.
To take the first reason, it is often the case that client signoff on the requirements is not obtained in totality or even for each phase of the project.
For instance, for a banking project, the clients have to sign off on the requirements upfront and the program manager has to ensure that everything is clearly written and spelt out.
In other word, the requirements have to be mutually agreed upon by the client and the vendor and there must not be any alterations to the requirements in subsequent phases. In practice, this is hard to actualize as clients often come up with new requirements and at different phases and hence, the best way to deal with this is to have the overall requirements or the 30,000 feet view signed off first so that minor changes or even major ones can be incorporated with the consent of the client who agrees to pay more for these changes.
Having said that, it is important to understand that “Scope Creep” or the extension of the requirements from what was agreed upon is natural in large IT projects.
The point here is that project management of large IT projects is usually one where elaboration and extension are common and hence complexity has to be dealt with. This is the reason why the program managers and the specific project manager who is in charge of the requirements and the scope must clearly communicate these aspects to the clients and get their approval before committing the vendor to the changes.
Talking about communication, it is the cardinal rule in project management that superlative communication must be practiced. We use the term superlative because even excellent communication is not enough when faced with the client who either tries to get more done for the same cost or blames the vendor for delays and cost overruns. Hence, the project managers must have superior communication skills and must have everything written down in official mails and project documents.
Apart from this, communication with internal stakeholders is another priority area as the support of finance, infrastructure, human resources, and administration teams is very important.
In other words, the internal stakeholders are as important as the external ones and hence, dedicated project leaders must be assigned to take care of these aspects.
Turning to the staffing of the team, it is often the case that large IT projects cannot find people with the desired skills and productivity leading to the same work taking more time and hence, imposing delays and cost overruns on the project. Hence, it is important to realize that staffing is a high priority item.
Finally, there must be active senior management involvement and monitoring of large IT projects as any escalations from the client are usually done to them rather than to the project manager. Hence, they must not be taken by surprise if the clients call the relationship manager directly.
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Costs in Project Management – Costs associated with the Projects
February 12, 2025
