Why do IT Projects Fail? A System Dynamics Approach to Management

Various studies lead by management consulting companies observe that IT projects still encounter very large rates of failures, regarding their implementation in organizations. These issues, mainly concerned with change management, have been explained by several factors. Despite technical problems due to the IT itself and/or its infrastructure, such factors could be users' lack of involvement, too few executive management support, lack of competences and expertise from both users and managerial teams, unclear business objectives, learning and training problems. As a result, many of these IT projects are cancelled before completion or not implemented at all. This study focuses on the diffusion phase of the IT in the organization, i.e. the phase which leads users to "normal operations", and which constitutes the final fit between the initial managerial goals and the actual use of the system. It would be argued in this talk that the diffusion phase of the IT in the company is crucial to its implementation's success. As an illustration, we have applied a logistic growth model to the diffusion of a new technology through a firm. The model consists of a pair of ODE's which were solved numerically to obtain the number of users and the benefit per user of using the technology as a function of time. The model has been compared to empirical data obtained from surveying a medium sized company and the results were in good agreement. The influence of the number of initial users was investigated. This model could be used to form the basis of a management tool to predict the time required for a firm to adopt a technology and the optimal number of initial users to train.