Case Study of Successful Complex IT Projects
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Table of Contents
Executive Summary 2-3
Introduction 4-7
Part I: Industry Background and Projects’ Common Feature 8-12
Industry Background 8-10
Common Features in Two Projects 11-12
Part II: Research Methodology 13-15
Research Questions 13-14
Methodology 14-15
Part III Pre-implementation, Implementation & Post-implementation 16-23
BACSTEL-IP Project 16-19
Online Licensing Project 20-22
Similarities between VOCA and VOSA 23
Part IV: Findings 24-28 Part V: Critical Success Factors and the Project Success Model 29-32
Critical Success Factors 29-30
IT Project Model 31-32
Part VI: Lessons Learned and Conclusion 33-36
Lessons Learned 33-35
Conclusion 35-36
References
Appendix I: Researchers Involved in the Case Study Appendix II: List of Contributors
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Executive Summary
This report, produced by Lancaster University students and sponsored by The British
Computer Society, increases our understanding of successful complex IT projects. The
British Computer Society recommended the BACSTEL-IP project in VOCA, a private sector
company, and Online Licensing project in VOSA, a public sector organisation, as examples
of successful complex IT projects.
One of the key findings to emerge from this case study is that most complex IT projects are
likely to involve industry initiatives across multiple organisations which subsequently lead to
the execution of other projects in support of the functionalities of the core project. The
management of these complex relationships, including external outsourcing service
providers, is a key factor in successful implementations. Other important findings emerged
from the study and can be usefully categorised as: i) project management, ii) change
management, iii) industrial collaboration, iv) outsourcing and v) technology choice and
adoption. These findings were the researchers’ interpretations of the patterns observed in
the various stages of the projects, which cover the pre-implementation, implementation and
post-implementation stages.
Within project management senior management support, stakeholder management and
effective inter and intra organisational communications were identified as related findings.
Similarly, change management incorporates iterative software development and shift in
organisational culture. In addition, the choice of Internet technology by the two organisations
was identified as a strategic issue, which subsequently shaped many aspects of the
projects. Also, a high level of industry collaboration was evident during the implementation
of the projects. The selective use of experienced consultants in the right circumstances was
another important finding. Finally, the social system and the method of communication used
played a role in the adoption of the new technologies.
In addition to effective project and change management which are not entirely unanticipated,
other aspects, such as the need for industry collaboration, technology adoption and
selective outsourcing, have also emerged as important for successful complex IT projects.
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The Project Success Wheel (PSW) model was developed from the critical success factors
identified during the research process. The eight component elements of the model are: i)
senior management support, ii) relationship management, iii) effective change management,
iv) shared vision, v) skilled and competent staff, vi) industrial collaboration, vii) user
involvement and viii) effective project management. It is recommended that each of the
factors in the model must be present and applied holistically in order to increase the
chances of achieving a success in complex IT projects. However, none of the components
can be used to compensate for another.
In addition to the above, this study identified seven lessons learned by the managers
involved in the BACSTEL-IP and Online Licensing projects. These lessons are:
1) Selective use of outsourcing in the right circumstances is good
2) Do not take for granted that outsourcing companies know more than you do
3) Continuity must be maintained when switching between consultants and outsourcing
providers
4) Employ the right project management methodology from the start and rigorously follow it
5) Planning for change should encompass the entire aspect of the organisation
6) Do not change absolutely everything at the same time
7) Relevant preparations should be carried out inside the organisation, thereby laying the
foundation for change.
Organisations can learn from these lessons, which also serve as a useful guide to managers
who are in the process of embarking on complex IT projects.
In developing this case study, thirteen telephone and four face-to-face interviews were
conducted with the people that worked on the two projects, such as project managers,
solution architect, IT strategist, third party consultants etc. all of whom provided the
information necessary to create the case study. Confidential internal documents and reports
were also used in conjunction with other secondary data which were essential for
completing the study.
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Introduction
Background to the Study This case study was conducted by Lancaster University students on the MSc in E-Business
& Innovation on behalf of British Computer Society as a follow-up to the BCS/Royal
Academy of Engineering Report “The Challenges of Complex IT Projects” [1]. The findings
are expected to serve as an antidote to the many, well publicised examples of high profile IT
project failures in the private sector and in UK Government. The study is based on two
successful IT projects in private and public sectors and aims to encourage best practice in
the IT profession.
Complex IT Projects: Definition and Challenges BCS judging criteria for Technology and Business Achievement Awards was used for
defining successful IT projects. A project is deemed to be successful if it leads to improved
business performance, delivers functionality and additional benefits to the internal and
external stakeholders affected by the project. Moreover, a successful project is delivered on
time, on budget and to pre-agreed specifications.
The study defines complex IT project as a large scale project that encompasses the
boundary of a single organisation. It is more likely to be an industry initiative, touching upon
projects carried out by other participant organisations, to complement the delivered
functionalities. Furthermore, complex IT projects can be characterised by the existence of
multiple stakeholders with somewhat conflicting interests which are likely to be one of the
main areas of concern during project delivery.
There are numerous challenges inherent in complex IT projects [1]. First of all, IT projects do
not have well-defined constraints compared to projects in other disciplines such as civil
engineering. This lack of constraints, or the difficulty of communicating those, is likely to
influence customers’ and suppliers’ expectations of the project. Secondly, the visualisation
problem surrounding software development might lead to problems which may surface
during requirements specification phase and an inability of stakeholders to fully
comprehend, and therefore specify, what project deliverables should be. Another
characteristic of IT projects is a consequence of the perceived flexibility of software on
Case Study of Successful Complex IT Projects
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behalf of project owners who, due to visualisation problems and the lack of constraints
mentioned earlier, are likely to change their requirements during project implementation. In
addition to this, an IT projects’ outcome is likely to be uncertain until the project is actually
delivered. This could lead to uncertainty of project stakeholders regarding the feasibility of
the project.
IT projects, by nature, are based on various assumptions which are taken into consideration
during software development. Due to the sheer number of assumptions, sooner or later,
some of these assumptions will prove incorrect and might lead to project failure. Moreover, it
is very difficult to predict the effect of every single change on the entire project, therefore,
increasing the occurrence of project failure. Finally, complex IT projects are likely to alter
practices and lead to the business change within the organisations implementing them.
Therefore, it is important that complex IT projects should be recognised as a part of
organisational change programme.
Success Rates of IT Projects The Standish Group Report from 1995 and its subsequent editions are the major source of
information on IT projects carried out worldwide, with emphasis on the US and Europe. The
report [2] identifies three types of project outcome - project success, when the project is
completed on time, on budget and with required features and functions; challenged projects,
when project is late, over budget and/or with less than required functions and features; and
project failure when project is cancelled prior to completion and never used. According to
the 2004 survey, 29% of all projects succeeded, 18% failed and 53% were challenged [2].
These figures, when compared to the same for 1994, 1996, 1998 and 2000, show a
significant improvement in IT project implementation, Figure 1.
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Figure 1 Success rates of IT projects 1994-2004
(Adopted from the ‘Extreme Chaos’ and ‘2004 Third Quarter Research Report’, The Standish Group)
In a ten-year period the percentage of successful IT projects has almost doubled, while
failed projects represent less than a fifth of all projects carried out. This may be because
business and IT managers have successfully identified critical success factors leading to
project delivery and gradually learnt how to mitigate challenges mentioned above.
Scope of the Report This report is based on two successful complex IT projects carried out by one private and
one public organisation.
VOCA (formerly known as BACS Limited) launched the platform for the future of automated
payments, called BACSTEL-IP in 2002 as part of a technology renewal programme
‘NewBACS’. In 2003 BACSTEL-IP won BCS “Technology Award: Services” for its unique
technical innovation within the electronic payments industry. In 2004 it won EEMA's Award
for “Excellence in Secure Electronic Business” as well as “European Banking Technology
Award for Outstanding Achievement of the Year” for its technology renewal programmes [5].
Vehicle and Operator Services Agency (VOSA) launched its Online Vehicles Licensing
project as part of a greater Traffic Area Network (TAN 21) project. VOSA Operator Licensing
development team won 2 out of 3 nominated awards for the greatest contribution to the
16
27
26
28
29
31
40
28
23
18
53
33
46
49
53
0% 20% 40% 60% 80% 100%
1994
1996
1998
2000
2004
YEAR
PERCENTAGE
SUCCESS FAILEDCHALLENGED
Case Study of Successful Complex IT Projects
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e-Government agenda in 2005 [3]. The categories of these awards were “Excellence in
Usership/User Growth” and “E-Government Excellence, Central Government: Team Award”.
The study identifies the critical success factors that led to the successful implementation of
the two projects, as well as the lessons learned in the process. In order to achieve that,
project managers, solution architect and others responsible for the project delivery were
interviewed. To corroborate the findings, customers and other third parties associated with
the projects also took part in the research. In total, 13 telephone and 4 face-to-face
interviews were conducted, providing researchers with valuable information on the
BACSTEL-IP and the Online Licensing projects.
Structure of the Case Study The structure of this report has been arranged in a chronological order so that the reader
can easily follow the progress of the information being presented. Part I covers the industry
background and the common features of the projects launched in VOCA and VOSA. Part II
explains the research methodology applied and identifies the research questions that form
the findings in this case. Part III covers pre-implementation, implementation and post-
implementation of BACSTEL-IP and Online Licensing projects. The findings are explained in
Part IV. Part V identifies the Project Success Wheel which was based on the critical success
factors previously identified. The final part draws out the lessons learned on the two
projects.
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Part I: Industry Background and Projects’ Common Features
This section of the study traces the history of the UK Payments and the Vehicle Licensing
industries, while also identifying the common features of projects launched across the two
and the environment surrounding them.
1. Industry Background UK Payments Industry The UK payments industry has at its heart the Association for Payment Clearing Services
(APAC) which was created in 1985 as a non-statutory association of major banks and
building societies and has become the umbrella body at the heart of the UK payments
industry. APACS provides the forum for discussion of non-competitive issues relating to
money transmission. The principal task of APACS is to maintain the integrity and efficiency
of UK payment systems by managing the principal UK payment clearing systems which
operate through the three separate clearing companies - BACS, CHAPS and Cheque and
Credit Company. VOCA (formerly known as BACS Limited) play an important part in
delivering a range of services to the payments industry.
CHAPS Clearing Company Limited Clearing House Automated Payment System (CHAPS) is an electronic transfer system for
sending same day value payments from bank to bank. It operates in partnership with the
Bank of England in providing a payment and settlement service for banks. The CHAPS
Clearing Company now operates two separate clearings, CHAPS Sterling and CHAPS
Euro. The CHAPS Sterling payment system, developed in 1984, is the second largest real-
time gross settlement systems in the world. CHAPS Euro is for clearing Euro-denominated
transactions. CHAPS offers its members and their participants an efficient, risk-free, reliable
same-day payment mechanism. Every CHAPS payment is unconditional, irrevocable and
guaranteed.
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Cheque and Credit Clearing Company The Cheque and Credit Clearing Company is responsible for the bulk clearing of cheques
and paper credits in Great Britain and has exchange centres in London and Edinburgh.
There are two clearings: The Cheque Clearing which deals with most inter bank cheques;
and the Credit Clearing which handles paper credit items.
Bankers Automated Clearing Service Bankers Automated Clearing Service (BACS) is responsible for bulk electronic clearing and
the management and provision of related payment services to the UK banking industry. It
was established in 1968 to provide a more efficient and streamlined method for handling
bulk payments without the need for paper. Until this time, all transactions between banks
consisted mainly of paper operation; therefore the introduction of a secure, electronic
method reduced both processing time and human error significantly. BACSTEL was
introduced in 1982 to replace the existing systems. It allowed users to submit their
transaction data over telephone lines. This increased speed of data delivery added further
levels of security to payment processing. In 2002 the processing was moved to a highly
secure site shared with the Bank of England. In the same year BACSTEL-IP was launched.
It allows users to submit and monitor payments using technology based on the Internet
Protocol (IP).
UK Licensing Industry The UK motor licensing industry is Government controlled through its agencies under the
Department for Transport. These agencies are in charge of all the licenses issued in various
categories. These are: private drivers, vocational drivers, vehicles and vehicle operators.
The Drivers and Vehicle Licensing Agency (DVLA) and the Vehicle and Operator Services
Agency (VOSA) are principally the two Government agencies responsible for issuing all
motor vehicle related licenses. In June 2003, the DVLA celebrated one hundred years of
driver and vehicle licensing in the UK. The DVLA has the responsibility for the issuance of
private vehicle driver’s license and all category of vehicle license also known as Road Tax.
Since 1991 it took over the issuing of the Vocational driving licences from Traffic and Area
Network (TAN), which was merged with the Vehicle Inspectorate (VI) to form VOSA in 2003.
VOSA provides support to delivery of a service for Traffic Commissioners, who are the
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regulators of the commercial vehicle operator industry, through six regional offices covering
120,000 operators throughout England, Wales and Scotland.
VOSA works with the traffic commissioners to enforce compliance with commercial vehicle
operator licensing requirements and the processing of applications for licenses for Goods
Vehicle (GV) and Public Service Vehicles (PSV) among other functions. Licensing of goods
vehicles and operators was introduced in 1933 with the Road and Rail Traffic Act. In 1988,
the goods operator licensing system was computerised in order to create a more efficient
system using the available technology. However, with improved technology innovations,
such as the Internet, it was observed that there is the need to design a new licensing
process which could exploit the capabilities of these new technology innovations. VOSA
launched its Operator’s Online Self-service Licensing project in 2004. It is an Internet-based
real time transactional service and allows goods vehicle operators direct access to their own
license records and to input and track progress on applications.
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2. Common Features in the Two Projects
This section looks at the similarities shared by the BACSTEL-IP and the Online Licensing
projects that justify their consideration as case studies of successful complex IT projects.
These similarities are: i) a platform for collaboration with other organisations, ii) the use of
Internet technology, iii) security requirements, iv) systems reliability characteristics and v)
part of a wider organisational change programme.
Collaborative Platform The payments industry is exchange-oriented with the need for several organisations to work
and collaborate seamlessly together. The BACSTEL-IP project provided an appropriate
platform which meets the requirements of relevant policies designed within the regulatory
framework of the Bank of England to promote good behaviour among all the industry
stakeholders. The stakeholders who used VOCA’s platform to collaborate together included
banks, bureaus, client organisations, BACS etc. Similarly, the Operator’s Online Licensing
project has at its heart several organisations such as the DVLA, DSA, VCA and vehicle
operator organisations that must work together under the oversight of the Department for
Transport. To enable these agencies to collaborate in order to provide efficient services,
technology is deployed of which the Online Licensing project is a part.
Internet Technology Another similar feature shared by the BACSTEL-IP project of VOCA and the Online
Licensing project of VOSA is that both projects utilise Internet technology. BACSTEL-IP
uses Internet Protocol and is one of the largest Java 2 Platform, Enterprise Edition (J2EE)
business applications in the world, enabling web-based enterprise applications online. Also,
the Online Licensing project is an initiative which enables vehicle operators to carry out their
business with VOSA and has allowed VOSA to work seamlessly with other agencies using
Internet technology.
J2EE is a platform-independent, Java-centric environment from Sun for developing, building
and deploying Web-based enterprise applications online. The J2EE platform consists of a
set of services, APIs, and protocols that provide the functionality for developing multi-tiered,
Web-based applications [4].
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Security The functions which BACSTEL-IP provides require the deployment of security features
capable of providing a tamper-proof system and delivering an audit trail of all transactions.
Therefore, the BACSTEL-IP project has security requirements at the highest levels of
authentication and auditability over an end-to-end secure network. Similarly, the Online
Licensing project has the capability for online payments of application fees by credit or debit
cards. A robust security framework is also deployed to ensure a secure network for
transmitting customer details over the network and an audit trail for all transactions.
Systems Reliability Due to the critical nature of the BACSTEL-IP project which processes an average of 60
million transactions per day, it is important that the system is reliable and available as and
when needed. This requirement is shared by the Online Licensing project not only because
of the need to offer reliable service to the customers, but also to ensure adequate capacity,
resilience and availability to share vital and timely information with other Government
agencies VOSA collaborates with.
Element of a Wider Programme The two projects, BACSTEL-IP and Online Licensing, are both elements of the
organisational change programmes undertaken by the respective organisations.
BACSTEL-IP is a phase of the wider NewBACS project by VOCA, while Online Licensing is
an element of the TAN 21 project undertaken by VOSA.
This section has looked at the similarities between the BACSTEL-IP and Online Licensing
projects. Self-evidently, there are enough justifications to study the two projects.
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Part II: Research Methodology
A multiple-case study approach was taken and conducted with both public and private
sectors complex IT projects in order to allow for comparison between the two and produce
more representative and generalisable findings. This section identifies the research
questions that are relevant to the study and explains the overall methodology adopted.
1. Research Questions The study is designed to answer the following research questions:
1. How can project managers achieve successful IT project implementation?
2. What types of issues are more likely to lead to IT project success- managerial or
technical?
3. To what extent does organisational culture influence complex IT project success?
4. How do organisations deal with change brought in by complex IT project
implementation?
5. What is the evidence and effect of wider industry collaboration on complex IT projects?
6. Why do organisations collaborate on complex IT projects?
7. What issues influence the adoption of new technology solutions?
8. What were the reasons behind outsourcing and how was the outsourcing relationship
managed?
9. What are the critical success factors for complex IT projects?
10. What lessons can be learned from the case study of successful IT projects?
The questions above have been designed around BCS judging criteria used when deciding
upon the Business Achievement Award [6]: the effectiveness of the relationships between all
the main parties; and management of the development, implementation and operation of the
system.
These judging criteria for giving Business Achievement Awards evaluate projects on the
basis of meeting time, quality and cost budgets. In addition winning IT projects are also
evaluated in terms of impact on customers, business impact on the organisations and a
variety of other benchmarks bordering on marketing and people management issues. These
Case Study of Successful Complex IT Projects
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can be linked to technology choice and adoption, outsourcing and industrial collaboration
concepts, which are the areas covered by the research questions.
2. Methodology Primary Research In order to answer the above questions qualitative research, with strong emphasis on semi-
structured interviews, was conducted. Due to time constraints it was agreed to use
telephone interviews as the major source of information, followed by face-to-face interviews
of key project stakeholders. In total, for the BACSTEL-IP project researchers carried out 3
face-to-face interviews averaging 76 minutes, and 12 telephone interviews averaging 35
minutes. Five VOCA representatives, including Project Manager, Technology Strategy
Manager, Commercial Business Manager, Marketing Manager and Solution Architect were
interviewed either face-to-face or via telephone. This provided researchers with valuable
information for the entire research process. A wide array of stakeholders, including 3 banks,
5 software suppliers and 4 clients using BACSTEL-IP system were interviewed using the
telephone. They allowed researchers to understand the perceptions of external stakeholders
regarding the IT project performance, thus making overall findings more valid and less
biased.
Access to the stakeholders involved in the VOSA project was limited, compared to the
VOCA project. The researchers managed to secure face-to-face interview with three VOSA
managers and an external consultant and one telephone interview with a vehicle operator
using the system. The limited number of interviewees could also be explained by the smaller
scope of the Online Licensing project compared to BACSTEL-IP project.
Secondary Research In order to further enrich the findings, researchers relied on several sources of secondary
data, including company reports and publications, project closure reports which were
provided by the two companies. Other IT industry reports, such as Standish Group CHAOS
Report [7], The Challenges of Complex IT Projects [1], Modernising Government Report [8],
SmartGov: Renewing Electronic Government for Improved Service Delivery [9] were also
used. These enabled a better understanding of the environment in which IT projects are
managed, and helped identify the underlying features which accompanied both IT projects.
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Reliability and Validity of the Research Bearing in mind that validity and reliability of research are crucial for the credibility of this
case study, researchers adopted a data triangulation method. This has been demonstrated
in the usage of multiple data sources, like banks, clients, software suppliers as well as
VOCA’s own management team in BACSTEL-IP case; and VOSA management team,
consultants and clients in Online Licensing case.
Moreover, validity of the study is enhanced with all three researchers being present during
the entire research process. This serves to minimise personal perception and attitude of
individual researcher towards the interview process and findings, thus, leading to a more
objective interpretation of interviewees’ feedback.
In addition to this, validity of the research is ensured by involving the major stakeholders of
the projects in proof-reading all findings and verifying them. This contributed towards a
greater authenticity of the findings. Finally, secondary data was used to ensure that all the
gaps encountered during the research process were recognised and managed.
Limitations of the Research Despite various measures taken to improve the credibility, reliability and generalisability of
the case study, it is important to mention limitations of this research. Firstly, the relatively
small sample size of the interviewees, especially in the Online Licensing project, was
recognised as a major limitation of the study.
Secondly, being a case study of two IT projects, one public and one private, this report has
to be taken with some caution when trying to generalise the findings towards all IT projects.
This is one of the characteristics of the case study approach.
Moreover, although this case study intends to provide some comparison between the IT
project management experience in public and private sector, one has to bear in mind that
the two projects involved have different scopes and complexity levels, therefore, a perfect
comparison between the two is unachievable.
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Part III: Pre-implementation, Implementation and Post- implementation of BACSTEL-IP and Online Licensing Projects
This section of the case study explores the various implementation stages of the two
projects, based on the interviews carried out with VOCA and VOSA representatives.
1. BACSTEL-IP Project
Pre-implementation Before BACSTEL-IP was launched in October 2002, the operations of the inter-bank
payments processing of Direct Debits, Direct Credits and Standing Orders had evolved over
time. VOCA, formally BACS Limited, has a culture of embarking on a major technology
renewal programme approximately every ten years. In 1975 it introduced its first powerful
transaction processors CEFT, which ran on magnetic tapes. This enabled a fast and a
secure operation which was an improvement over paper based transactions processing.
BACSTEL was introduced in 1982 with an improved capability for users to submit
transactions data over telephone lines, thereby reducing the need for the use of magnetic
tapes with the cumbersome operations around it. BACSTEL further enabled an increase in
the speed of data delivery and the introduction of an additional level of security to payments
processing. By the mid-nineties, due to the prevalence of secure telephone line connections
to the system, using magnetic tapes ceased entirely, a development which was a significant
step towards complete automation.
Also in the 1990s, with the advent of increased processing power in computing, a
Replacement Electronic Funds Transfer (REFT), was introduced which extended the
features of BACSTEL and further enabled a faster and more secure operations. This
development also led to greater flexibility in the range of services offered to users. With the
need for additional security, the processing of transactions was moved to a highly secure
site shared with the Bank of England in 2002. In the same year, BACSTEL-IP was
introduced. It is a more secure site and allows users to submit and monitor payments using
Internet technology.
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BACSTEL had to be changed in spite of its stability and reliability because of the need to
migrate to a system that runs on current state-of-the art technology capable of coping with
the increasing transaction volume and security requirements. The background work for
BACSTEL-IP started in 1999 with the recognition within BACS and the wider payments
industry of the need to do ‘something’ about the operations of the low-value, high volume
category of Inter-bank transactions processing. It was, however, not clear what had to be
done at that time; but VOCA commenced the re-thinking of its operations with an overview
appraisal of its internal capabilities. The strength of the organisation in project management,
service delivery and applications development were identified. It came to light that ‘current
technology strategy’ type skill and development capability needed to be improved upon. This
level of reflection established the scope which was subsequently addressed by the
NewBACS programme, of which BACSTEL-IP emerged as a component project.
Following this, a high level proposal was drawn up. The proposal set out the environmental
changes in the world and the appropriate response to the emerging global developments. A
business and technology case was made for a technology renewal programme which fitted
within the scope of other industry initiatives that were going at the time. There was
considerable support from the senior management for the technology renewal programme,
which subsequently sensitised the workforce by embarking on a substantial cultural change
to reflect that the market and customer expectations had changed. In 2000 these proposals
were presented to the Board which comprises 12 UK banks. Agreements were reached that
a real plan of action should be presented one year later. In 2001, a three month project
called “Delivery Zero” was completed. This project defined in detail the overall strategy for
the NewBACS programme and was the high level scope within which the BACSTEL-IP
project was delivered.
Implementation For the successful implementation of VOCA’S BACSTEL-IP project, a range of factors were
involved in delivering the project on time, to specification and five per cent under the
approved budget. In the first instance, it was understood that a substantial cultural change
programme had to be undertaken to sufficiently sensitise all employees. This contributed to
creating the appropriate atmosphere necessary to handle the changes that were being
embarked upon.
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In addition to the cultural re-orientation mentioned above, stakeholder management was an
important part of the project. VOCA needed to work with twelve bank groups each of which
had its own agenda, internal processes and unique requirements, and the need for
successful collaboration was evident.
Another issue involved in the implementation of BACSTEL-IP project was the requirement
that every member of staff, both in-house and outside consultants, involved in the project
must be skilled in the usage of an established project management methodology. Everyone
on the project was mandated to be competent and certified in the use of PRINCE2. This
facilitated effective communication and understanding among the personnel involved in the
project. Also, a modified version of PRINCE2 was employed and integrated with the
Rational Unified Process (RUP), which enabled iterative development throughout the project
phases.
PRINCE2 is a process-based approach for project management providing an easily tailored
and scaleable method for the management of all types of projects. Each process is defined
with its key inputs and outputs together with the specific objectives to be achieved and
activities to be carried out [10].
Rational Unified Process (RUP) is a configurable software development process platform
that delivers best practices and a configurable architecture. It enables the selection and
deployment of only the process components for each stage of a project [11].
Furthermore, it was recognised that JAVA skills would be the core skills required to deliver
on the project successfully. A comprehensive skill and competency evaluation was carried
out and appropriate rationalisation was done. Moreover, to ensure the involvement of only
highly skilled and focused workforce, a selective use of outsourcing partners was made,
which subsequently involved vendors operating at the leading edge of technologies required
to deliver on the NewBACS project and the BACSTEL-IP project in particular. Also, the
ability to manage the outsourcing partners involved in the project can not be
overemphasised. It was important to work closely and alongside them in order to keep track
of the entire project. This served to allow for close monitoring of the progress on the project
which made it possible for VOCA to take action to correct any lapses that surfaced.
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Finally, substantial testing with special tools was carried out at a very early stage and
continued through the life cycle of the BACSTEL-IP project. This contributed significantly to
the success of the project.
Post-implementation The launching of BACSTEL-IP in 2002 marked the emergence of a new platform that was
built in line with modern technology trends for processing the low value, large volume
transactions in the payment industry. VOCA has continued to deploy resources in order to
ensure the new technology solution runs effectively as part of the national critical
infrastructure considering the volume of transactions it processes on a daily basis. One of
the challenges that VOCA has faced is to ensure that the system is reliable and available at
all times. The organisation has strategies in place to minimise or entirely eliminate any
incidence of downtime on the system.
In doing this, the need to collaborate more effectively with technology partners and software
suppliers was recognised. Getting BACSTEL-IP, a mission critical project, to function has
been a major achievement for VOCA. Future challenges are centred around building on the
existing solution by providing additional functionalities in line with emerging needs in the UK
payments industry.
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2. Online Licensing Project
Pre-implementation Before the Operator Online Licensing project became operational in 2004 the previous
system was paper intensive with administrative procedures that were not customer focused.
Moreover, the commercial vehicle transport industry had a slow forms-based service with
quality that could be significantly improved upon. Staff shared obsolete workstations running
1980s software, there was no electronic communications, and there was little sharing of
information. The information technology at the time was built on the infrastructure of a
legacy system. The Operator Licensing part of VOSA as an organisation had no culture of
leading technology innovations. The need for a major change renewal programme that led
to the Online Licensing project was driven from the outside and more specifically by events
happening in the environment regarding the potential of ICT and e-commerce technology.
The project started from a strategic review to identify the core business of the Operator
Licensing part of VOSA, an action which enabled an understanding that the organisation’s
business in terms as of customer service. This also informed the thrust of the new structure
towards entrenching customer facing roles within the organisation.
The tone for the change was set by the central Government by calling for e-Government
initiatives from public services organisations. The senior management of the VOSA
Licensing business asserted its commitment for a change agenda by engaging outside
consultants to serve as the catalysts and to provide direction for the new vision, strategy and
structure of self service and e-development. This provided VOSA the capability from the
outside to deliver on a new articulated vision directed at changing the work processes,
streamlining and aligning them to fit into feasible current technology trends.
Seven projects were subsequently identified which culminated into the formation of seven
project teams with the Online Licensing project as one of these projects. The first three
months were devoted to designing individual Blueprints for each project. This laid the
foundation for the Online Licensing project and the future direction of VOSA.
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Implementation The Online Licensing project was more of a change management, rather than a pure
technology project. Recognition of this informed the substantial cultural and structural
changes within the organisation during the implementation of the Online Licensing project.
The project implementation rested on the foundation of aligning the technology solution with
the new structure and culture. This established customer service orientation and customer
facing roles that served as points of contact with outside customers. In implementing this
development, significant stakeholder participation was involved throughout the period of
project implementation. Substantial training of staff was undertaken. Outside users were
also engaged to participate in pilot programmes. These contributed to establishing
ownership as everyone was carried along on emerging developments. Also, the project
team was led by VOSA staff who worked alongside the technology developers, and
managed the overall delivery to ensure that the solutions aligned with the business
processes of the organisation.
In addition to the strategies deployed to promote user involvement in the Online Licensing
project during implementation, it was also important to devise a means to manage the
outsourcing relationships. Since software and infrastructure services were outsourced,
substantial collaboration was maintained with suppliers to jointly develop an innovative
solution that enabled a seamless migration from the prior legacy systems. Another important
point during implementation was that only standard market-leading technology was
deployed, a decision which served to ensure the reliability of the system.
Furthermore, for an effective implementation, a modified version of PRINCE2 guidelines was
used in conjunction with a Rapid Application Development (RAD) approach. This enabled a
robust development which satisfied emergent requirements and met the challenging
timescale. Substantial testing was carried out on the system which was done from
architecture design and approval, through to the implementation of the ‘model office’, pilot
and to roll-out.
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Post-implementation The launching of the Online Licensing project was a landmark achievement on the part of
VOSA in re-defining the standards on which Government service is delivered to the public.
Vehicle operators can now transact their business on a self-service basis, a development
which significantly reduced the time it takes to process a transaction from fourteen days to a
few hours.
New challenges have, however, emerged for VOSA as an organisation. These take the form
of encouraging a widespread adoption of the system by external users and other
Government agencies. VOSA has embarked on other complementary projects in order to
introduce additional functionalities. These are expected to enhance the capability of the
system. It is hoped that this would further encourage more users to adopt an online platform
to transact with the Government as more benefits are introduced.
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3. Similarities between VOCA and VOSA
A brief comparison of the two companies and their experience during the complex IT project
developments are detailed in this section and will be used to help identify the common
challenges encountered during project implementation.
It was clear that neither VOCA nor the VOSA Licensing business had recognisable business
or IT strategies in place before embarking on their respective projects. Therefore, the need
to create IT strategy with corresponding business strategy was acknowledged. Within VOCA
this took the shape of three White Papers on business, technology and programme
management while in VOSA seven Blueprints were created, identifying what changes were
likely to occur and how they would affect the departments within the organisation.
The two organisations, not having implemented major IT projects for many years, embarked
on these radical projects that required rigorous change within the company culture and
structure. In order to handle the change, services of outside consultants were engaged
which proved important in ensuring that the organisational culture aligned with the changes
that were to be introduced through new technology development. Moreover, change
management procedures were in place to ensure smooth transformation. As a result, the
organisations achieved cultural shift from conservative to a much more innovative culture. It
was emphasised that outside consultants were major change catalysts in the technology
renewal process.
Another similarity between the two companies was that both underestimated to some extent
the inherent complexity involved in embarking on the technology change programme in
respect to human resources required to develop the IT systems. In VOCA, for example,
inadequate JAVA skills were identified, while in VOSA general IT skill levels were low. To
compensate for these deficiencies, the two organisations had to outsource some or all parts
of the IT development to third parties.
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Part IV: Findings
This part of the report identifies the findings of the case study. These are categorised into
major headings identified from the research questions in Part II of this report.
1. Project Management It was found that a detailed project plan before project commencement helped to achieve
successful delivery of the IT projects. Before the BACSTEL-IP project was launched a high
level of strategic review was done which led towards the write up of three white papers on
business, technology and programme management. These papers presented high level
proposals defining the scope of the entire NewBACS Programme and BACSTEL-IP project
in particular. In the Online Licensing project, experienced consultants were engaged to
conduct a feasibility study. Wide consultation was done which led to the production of seven
blueprints specifying the change framework for the entire project.
There were regular stakeholder and progress meetings which helped to evaluate stages in
project development, thereby contributing to success in complex IT projects. These allowed
VOCA to stem project slip. When, as a result of constant progress monitoring, it was clear
that Rational Unified Process (RUP) was not generating the required results the
methodology was re-introduced. Similarly, VOSA at some stage in project implementation
had to re-evaluate progress of the project and make appropriate changes.
Senior management support is a crucial factor in successful delivery of complex IT projects.
It was recognised that in VOCA the IT Director acted as the main catalyst for the project
outcome. He was able to get the management team together before the project started and
energised them around what needed to be done. He also introduced the concept of White
Papers mentioned above. In VOSA, on the other hand, senior management was responsible
for the projects’ emphasis on the best technology and timely management of organisational
change that was to accompany new technology development.
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Shared vision and effective communication channels are essential for delivering successful
IT projects in complex environments. For both organisations the need for change emanated
from the top and was effectively communicated to every level of the organisation. Although
VOSA had separate change programmes for senior management and the rest of the staff, it
was decided that both went through the same thinking process in order to entrench the new
vision. Similarly, within VOCA effective communication of the vision and new organisational
strategy was carried out.
Rigorous and flexible execution of previously agreed project management methodology
contributes to successful IT project development. During BACSTEL-IP implementation, for
example, a combination of PRINCE2 and RUP was used. The two methodologies
complemented each other and allowed project management team to better control the entire
process as well as allow for more efficient change management.
The ability to manage multiple stakeholders with conflicting interests is important for
delivering success in complex IT projects. Both VOCA and VOSA employed stakeholder
management techniques, where regular meetings with direct stakeholders were carried out
to ensure that all requirements and expectations have been met, and any conflicts between
stakeholder interests were resolved.
From the research, the general impression obtained was that both managerial and technical
elements of the complex IT projects should receive equal attention and that neither should
be considered inferior to the other. Nevertheless, there are particular stages of the project
when one should concentrate on technical rather than project management issues and vice
versa. During the early stage of the project management, issues such as motivating staff,
managing resources and ensuring the correct business and IT strategies are in place, are
more likely to prevail. This was evident in both organisations under study. Later on, during
the software development stage, technical issues were seen as more important and
required greater attention.
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2. Change Management In both organisations an equivalent to a ‘change management board’ was established,
overseeing any changes taking place and assessing their impact on internal and external
stakeholders. The board was also in charge of deciding whether the change should be
implemented or not. In VOCA, for example, it was anticipated that significant IT change
would need to take place and require substantial cultural change within the organisation.
Moreover, iterative software development allowed for effective management of change and
risks that may develop during the project implementation. This ensured that no change
would have a fatal impact on the overall project, since RUP methodology was based on
small steps being taken at a time, thus avoiding ‘big bang’ situations. Moreover, VOCA
adopted a policy of allocating a certain number of mandates to the changes that might come
along, thus ensuring greater flexibility.
Complex IT projects usually have a high impact on organisational culture. Findings show
that in both VOSA and VOCA IT projects led towards a shift in organisational culture from
more conservative towards more innovative and a learning-oriented culture. Furthermore, a
decisive role in cultural shift was played by external consultants who were catalysts for
change during the IT project implementations. Consensus emerged that without cultural shift
towards a more progressive and innovative organisation neither project would have
succeeded.
3. Industry Collaboration The interviews conducted show that organisations within and outside the same industry on
the BACSTEL-IP and Online Licensing projects had to collaborate to deliver on the project.
In the case of VOCA, members that sponsored the project signed up to collaborate through
a formal agreement to have one central facility that everyone could access. In addition,
bilateral agreements were signed by member banks to enable a straight-through processing
of transactions facilitated by the BACSTEL-IP project. Also, the member banks formed the
committee that determined the requirements and managed emerging issues on the project.
Furthermore, VOCA maintained a collaborative approach with its consultants and
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technology partners throughout the life of the project, which significantly contributed to the
success.
However, limits to the level of collaboration surfaced during the project implementation. The
member banks could not collaborate on security and internal administrative standards. This
was due to unwillingness of the parties to compromise their uniqueness and established
ways of running internal processes.
Another finding identified from the research seeks to answer the question “why do
organisations collaborate on complex IT projects?” In answering this, the interviews
conducted reveal that the collaborative relationship involved in the two projects is a
resource-based alliance. The member organisations in VOCA joined forces to share industry
developmental costs. In addition, standard agreements were established by VOCA and
VOSA which enabled them to share customer information (VOSA shares customer
information for transport regulation purposes and VOCA does that to enable corresponding
debit and credit transactions in other banks).
4. Outsourcing Understanding the dilemma of where, why, when and how to successfully outsource has
emerged as one of the most difficult and important business skills needed for organisations’
survival.
The research identified that selective use of experienced consultants in the right
circumstances contributes to project success. VOCA was very selective in hiring external
consultants and it made sure that every third party employed was scrutinised. As a result of
this outsourcing strategy the organisation was able to benefit from the high level of
knowledge and skill transfer, which, consequently, led towards successful BACSTEL-IP
implementation. VOSA also relied on an experienced third party from the project outset. As
a result of this, the organisation and its employees went through a learning process which
helped VOSA to achieve a successful implementation.
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5. Technology Choice and Adoption Both BACSTEL-IP and Online Licensing project involved usage of Internet technology. One
of the multiple reasons behind this was that Internet technology was new at the time and
since VOCA and VOSA wanted to employ state-of-the-art technology, it was the obvious
choice. In addition to this, it was expected that Internet technology would improve processes
in place by making them more efficient and substantially reducing the time it takes to
complete a transaction.
Moreover, both organisations intended to bring some change to the business process and
IP technology allowed new ways of doing business to emerge. This led to a change of end
users’ role in the business model from passive to active. The new business model required
end users to be capable of using the technology, which was achieved by providing training
for them. Research shows that technology adoption from the end users and their
commitment to the system were fundamental for success of BACSTEL-IP and Online
Licensing projects.
From the research it is apparent that the factors influencing the adoption of the BACSTEL-IP
and Online Licensing projects centred on the social system within which the projects were
executed and the methods of communication used. For the BACSTEL-IP evolving a
renewed payment processing system served to mobilise all industry participants and
especially for the users to adopt the system. Similarly, for the Online Licensing project, the
industry was used as a platform to encourage the adoption of the new system through pilot
programmes.
Apart from using pilot programmes to get users to accept the new system, the organisations
embarked on a mass-awareness campaign directed to emphasise the relative benefits of
the new system which included ‘ease of use’, ‘more speedy service’ and a ‘more secure
data’.
It was, however, discovered that organisations with new management or with an incidence
of a recent management shake-up are more likely to be late adopters of a new industry-wide
technology initiatives as they are more likely to be concerned with strengthening their
internal system.
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Part V: Critical Success Factors and the Project Success Model
This part of the report identifies the critical success factors (CSF) and the IT Project Model.
It is expected that the Project Success Wheel (PSW) will serve as a guideline to
organisations undertaking complex IT projects.
1. Critical Success Factors
The research has identified several critical success factors, which have contributed towards
the delivery of BACSTEL-IP and Online Licensing projects. First of all, senior management
support was seen as a critical element for the delivery of the projects. It brought in an
additional sense of importance and urgency to the project. It also ensured that, if delivered
successfully, the entire organisation would benefit from the project.
Secondly, due to the level of industry collaboration involved, effective relationship
management among the stakeholders, sponsors, outsourcers and end-users can not be
overemphasised. Managing the relationship with external outsourcing service providers was
identified as being particular important.
Industrial collaboration was also very important in ensuring the success of the two projects
in the case study. It enabled sharing of the project costs and execution of complementary
projects necessary for the smooth functioning of the system.
Furthermore, shared vision and understanding of responsibilities were also critical for project
success. They contributed to creating a single purpose of vision necessary to deploy a
potent programme. Continuous communication among the parties was sustained and
helped in leading to project success.
Effective change management was paramount for the delivery of BASCTEL-IP and Online
Licensing projects due to their complexity and uniqueness. It ensured smooth inter and
intra-organisational transformation which is important for such large scale projects.
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Skilled and competent staff was another critical success factor identified. This reinforced
knowledge transfer and the organisational learning that took place when the projects were
implemented. Both projects were by-products of excellent communication and the diffusion
of skills within the organisations. These, combined with empowerment and flexibility of staff
to adapt to the new environment, helped in achieving success in the complex IT projects.
Effective project management techniques, which incorporated project planning, continuous
monitoring and reporting of the progress, as well as effective resource management, were
also considered as critical success factors.
Finally, user involvement was critical for successful delivery of BACSTEL-IP and Online
Licensing projects. Therefore, project owners and managers should pay particular attention
to the customer side of the project delivery and ensure the continuous involvement of end-
users throughout the project life-cycle.
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2. IT Project Model
The Project Success Wheel (PSW) model (Figure 2) was generated by the researchers and
is a synthesis of the critical success factors identified from the study.
Figure 2 Project Success Wheel (PSW) Model Each of the variables in the model must be present for achieving success in complex IT
projects. However, industrial collaboration, shared vision and relationship management
(particularly with external outsourcing partners), as depicted in the model above, were the
Project
Management
User
Involvement
Industrial
Collaboration
Relationship Management
Shared Vision
Effective Change
Management
Skilled and Competent
Staff
Senior
ManagementSupport
Successful Complex IT
Project
Case Study of Successful Complex IT Projects
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key contributors to the study. The three factors have not been emphasised in previous
research on complex IT projects, therefore, it was essential to highlight them.
Industrial collaboration involved the need for a formal arrangement to articulate a vision of
what needs to be done to move the industry forward. On the BACSTEL-IP and Online
Licensing projects, there was a significant industry collaboration involved, which contributed
to the success of the project. In the same vein on relationship management, the two
organisations worked closely with their outside outsourcing partners. For effective
interaction among all the disparate parties, a shared vision in communicating the extent and
implications of the projects must be maintained. These three factors combined are the key
contributors to project success from this study.
It should be borne in mind that none of the components can be used to compensate for
another. It is expected that the model might be used holistically as a checklist by managers
to help them increase the likelihood of success in complex IT projects.
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Part VI: Lessons Learned and Conclusion
The lessons learned, as drawn out from the primary research, are presented in this section.
These have been laid out in numerical order to aid an easy understanding.
1. Lessons Learned Taking into consideration that two fairly distinct IT projects have been the focus of this case
study, several mutually–shared lessons were identified. Out of the seven lessons learned
more than half relate to the process of outsourcing IT services. The implication of this is that
organisations need to pay particular attention to their relationship with third parties.
Lesson 1
Selective use of outsourcing in the right circumstances is good
This implies that organisations must evaluate the reasons for outsourcing particular parts of
the project provided that the need to outsource IT services has been identified. A rigorous
process should be followed to select potential service suppliers. Each must be scrutinised to
identify the supplier whose involvement would make the most desirable impact on the
project.
Lesson 2
Do not take for granted that outsourcing company knows more than you do
During project implementation it should not be taken for granted that the outsourcing
company always possesses the skills required and knows what should be delivered and
how. Therefore, organisations need to constantly monitor and control the activities of outside
consultants and the deliverables in order to ensure that their project is not slipping, and
thereby deviating from the original scope.
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Lesson 3 Continuity must be maintained when switching between consultants
and outsourcing providers
Sometimes it might be necessary to switch between third parties involved in the project;
however, it is important to maintain continuity and allow for a smooth transition so that the
project would be on track and within the original scope. This would serve to ensure the
efficient use of all the resources required to complete the project.
Lesson 4 Employ the right project management methodology from the start
and follow it rigorously
When implementing complex IT projects application of a particular methodology must be
reviewed from time to time, especially if several parties are involved in project delivery. This
will ensure that all the methodologies used during the project implementation align to deliver
on the project. This helps to avoid potential project failure caused by the usage of different
methodologies.
Lesson 5 Planning for change encompasses the entire organisation
It is important to ensure detailed planning of the project before organisations embark on a
change programme using IT projects. All areas that are likely to be affected by the project
should be covered during the evaluation process. Moreover, contingency planning will allow
for a greater flexibility and improved risk management.
Lesson 6
Do not change absolutely everything at the same time
Management of the changes which are likely to take place as a result of IT project
implementation is very important and must be carefully done. Only the changes that are
critical to the project success should be considered. Moreover, in a situation requiring a
change to several elements of the project, careful prioritisation must be carried out.
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Lesson 7 Relevant preparations should be carried out inside the organisation
thereby laying foundations for change
Since it is most likely that complex IT projects will lead to radical change, it is important to
ensure that the environment within the organisation is prepared to embrace the impending
change.
2. Conclusion
This report is based on an in-depth research conducted on the BACSTEL-IP project,
launched by VOCA, a private sector organisation; and the Operator Online Licensing project
launched by VOSA, a public sector organisation.
From the case study, there was no significant difference in the factors that contributed to
success between the projects in the private and public sectors. It was also observed that a
complex IT project is most likely to be part of an industry initiative, touching on other projects
to complement its functionalities. The judging criteria for giving IT professional awards by
the British Computer Society was used for the background definition of successful, complex
IT projects. This is particularly important because the projects are not only evaluated on the
basis of meeting time, quality and cost budgets. Award-winning IT projects are also
assessed in terms of impact on customers and on the organisations’ internal processes, as
well as a variety of other benchmarks bordering on marketing and people-management
issues.
This report identifies a range of key findings which, together with critical success factors,
increase our understanding of successful complex IT projects. The key findings that were
identified from this study are: project management, change management, industrial
collaboration, outsourcing and technology choice and adoption. These findings, which cover
pre-implementation, implementation and post-implementation stages, were the researchers’
interpretations of the patterns observed in the various stages of the projects.
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In addition to the effective project and change management other critical success factors
significant for success in complex IT projects were identified. Namely, the need for industry
collaboration, technology adoption and selective outsourcing also emerged.
The Project Success Wheel model (Figure 2) was developed from the critical success
factors identified from the research. The eight factors in the model are: top management
support, effective change management, skilled and competent staff, user involvement,
effective project management, industrial collaboration, shared vision and relationship
management (particularly with external outsourcing partners). However, the last three
factors combined were recognised as the key contributors from this study. It is
recommended that each of the variables in the model must be present in order to achieve
success in complex IT projects. It should be borne in mind that none of the components can
be used to compensate for another.
Furthermore, this work identifies seven lessons learned by the managers involved in the
BACSTEL-IP and Online Licensing projects. Firstly, the selective use of outsourcing in the
right circumstances is good. Secondly, organisations should not take for granted that
outsourcing companies know more than they do. Thirdly, continuity must be maintained
when switching between consultants and outsourcing providers. Fourthly, that the right
project management methodology should be employed from the start and followed
rigorously. Fifthly, planning for change should encompass the entire organisation. Sixthly
that project managers should not change absolutely everything at the same time. Finally,
relevant preparations should be carried out inside the organisation in order to lay the
foundation for change.
Organisations can learn from these lessons. In addition, a rigorous application of the Project
Success Wheel provides informed guidelines to managers who are embarking on a major IT
project and eliminates issues associated with high profile project failures.
It is suggested that further research is carried out in order to improve the generalisability of
the findings. This could be achieved by increasing the sample size considerably to cover
organisations of various sizes from numerous industries. Also, quantitative research could
be employed on the variables identified in the study to measure their individual impact on IT
projects.
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References
[1] “The Challenges of Complex IT Projects” by Royal Academy of Engineering and The
British Computer Society, April 2004
[2] “2004 Third Quarter Research Report”, The Standish Group International, Inc
[3] http://publictechnology.net/print.php?sid=2329
[4] http://www.voca.co.uk/press/awards.php
[5] http://java.sun.com
[6]www.bcs.org/BCS/Awards/Awards/Professional/JudgingCriteria/Technology
[7] “The Standish Group CHAOS Report”, 1995, The Standish Group International
[8] “Modernising Government” March 1999
[9] “SmartGov. Renewing Electronic Government for Improved Service Delivery”, iSociety
July 2003
[10] http://www.ogc.gov.uk/prince2/
[11] http://www-306.ibm.com/software/awdtools/rup/
Case Study of Successful Complex IT Projects
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Appendix I: Researchers Involved in the Case Study
Olaseni Alaka Lancaster University
Dilwar Hussain Lancaster University
Marina Vojinovic Lancaster University
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Appendix II: List of Contributors
Tim Lamberstock VOCA
Chris Dunne VOCA
David Smith VOCA
John Wright VOCA
Mike Hutchinson VOCA
Bill Buckley VOSA
Linda Stempt VOSA
Ian Adams VOSA
John Kopij HEDRA
Phil Petit Colchester Council
Sue Williams-Lee Hinckley and Bosworth Council
John McColgan University of Strathclyde
Anonymous Conwy Borough Council
Derek McGain Version One
Catherine Murphy Version One
Adrian Stafford Jones Albany Software
Brian Greener Microgen
Martyn Shuttler Eiger Systems
Bob Schiller Barclays Plc
Anonymous Royal Bank of Scotland Group
Anonymous Abbey