5 Tips to Reduce IT Project Risks & Costs

Today’s Daily News featured an update on New York City’s infamous CityTime project.  If you haven’t heard, CityTime was the Big Apple’s IT spending orgy.  It was planned as a $60 million payroll automation project, but the cost skyrocketed to $600 million.  Read about it here:  http://www.huffingtonpost.com/2011/06/20/city-time_n_880758.html

While malfeasance was at the core of this rotten apple, C-Level executives can learn from New York City’s mistakes.  Smart leaders avoid computerizing what they don’t understand or can’t envision.  They recognize that increasing complexity translates to more IT cost and risk.

Here are five tips to lower IT project cost and risk:

  1. Convert Less Data – Data conversion is messy and expensive.  Other than critical data or government mandated records, why invest in converting data that will have little value in the future?  The more data converted, the more hours spent cleansing that data.  Convert only what you need to help run the organization going forward.
  2. Test Later – Like data, testing is critical, but too much can be bad.  Too often, legions of testers will run through complex testing scripts and then a scope change negates the value of the test.  Run your tests once scope has been locked down.
  3. Avoid Vendor Boondoggles – Vendor sponsored conferences with rock stars, golf tournaments and so-called learning events are all designed to persuade IT leaders to spend more money.  Avoid these boondoggles.
  4. Say No to the Bait & Switch – Your lead consultant was just reassigned to another client, and your consulting firm’s partner tells you that the transition to his replacement will be seamless.  Negotiate for a refund for the learning curve investment your organization made in that first consultant
  5. Don’t Pay for Partner Time – When the head honcho from the vendor spends a day at your site, recognize that he’s probably there to sell you more software or services.  Check your invoice to ensure his selling time is not being billed to you.

IT projects are more likely to succeed when the scope is simple, the team is lean, and the timeframe is short.  Often a high-risk, multi-threaded complex project can be reconstructed as a sequence of linear, lower-risk short-term projects.