IT Project or Business Project?


100% of IT projects fail.

OK, maybe it’s not all of them, but everyone can agree the percentage is larger than anyone connected with the process would want to see.  While there has been much research on this, with case studies, methodologies and frameworks developed to help an organization be successful at implementing a project; one reason that often goes unnoticed is how the project is defined from the very beginning.  Is it really an IT project, or is it a Business Project that involves IT?

Now, before you go off and say, “Well, every project is a business project,” let’s set up some parameters for this discussion.  We’ll use the traditional paradigm in an organization that IT is a department, and anything that involves technology will be led by the IT department (PMO, etc.).

The way it traditionally works is the organization decides it wants to install a new system to help it improve a particular Business area (doesn’t matter if it was initiated by IT or the Business area), then, once approved, a project manager from IT is assigned to lead the project.  There is probably a “champion” from the Business area (likely a VP), and there may, or may not be dedicated resources allocated from the Business area.  If a resource is dedicated, it’s usually someone who “has the time.”  So, off the organization goes with its latest “IT Project.”  The IT PMO leader reports out to the “steering committee” that has been set up to oversee all IT Projects.  As time goes by, hiccups happen, setbacks occur, and the IT project manager is answering to all of the issues the project is having.  When it is “finally” implemented, it doesn’t work as expected, and is usually deemed another failure (the degree of which varies).  Who catches the ire of management, well, IT of course.  After all, they were the ones who were responsible to manage and implement the project.  So, IT leadership huddles up and tries to come up with a new project management approach, or technique to manage their “IT Projects.”  And the cycle repeats again and again and again.

Why does this happen?  Because we define every project that deals with technology as an IT project, and then try to manage and lead it accordingly.  And we fail.  So, what should we do?  The first step is to determine if we have an IT project, or a Business Project that involves technology.  This is done by determining who will get the greatest benefit or impact from implementing the project as the organization measures itself.  If the organization is installing a new finance system, then although the whole company can benefit from this, the greatest impact on the business processes is probably in the finance department.  Therefore, someone from the Finance team should lead the project day to day (with project management support from IT).  Likewise, if it’s a server virtualization project, then, although virtualization will benefit the entire organization, the business process impact is in the IT department; so this should be led by IT.

To improve your chances of success, identify the true project owner – who is impacted most, and who gets the most benefit, then select the project leader from that area.  This is a great opportunity for an up and coming leader to show their stuff!  Give them the proper support (like PM from IT experts) and authority they need, and let them get to work.

You will be amazed at the results.


9 Responses to IT Project or Business Project?

  1. Tony Fink says:

    Good article!!!

  2. […] wrote a piece titled “IT Project or Business Project?” that really blew me away with it’s simple approach to leading projects by first asking […]

  3. Nice article. The problem is that the PMO exists in the IT organization. This makes it difficult for responsibility to be assigned outside the PMO. A Strategic Program Office (SPO / SP3O) or Business Program Office should exist that reports to the COO or to a CPO for those projects that are more than IT.

  4. Absolutely agree! I have long been a believer that there should be some sort of centralized (non-biased) Project management group in an organization. If that group does exist in IT (report to CIO), then in that organization, IT’s role would be much different than in most.

  5. Mick Wren says:

    I’d go one step further than Glenn and say that there should be a centralised business change function within any business with the objective of performing any and all changes to a business.(Hammer made an excellent case for this sort of function in chapter 13 of ‘Beyond Reengineering’.) All business changes contain their own unique combination of systems, process, people and facilities change. We don’t just need IT project manager and/or business project managers we need business change project managers (and analysts and designers etc). The question of alignment would disappear as all projects would align all necessary parts of the business as a matter of course in defining the business changes.

  6. Peter Thomas says:

    Good observations – I think I may have been channelling you when I wrote:

  7. Mick Wren says:

    Excellent article but again I’d go one step further and say that it is no good IT managers embracing the business (enlightened IT managers have been trying that for many years). They will still be viewed by the rest of the business as IT.

    We need to be more bold than that and remove all change activity from those parts of the business that currently perform change (e.g. IT, HR, facilities, tom, dick and harry) and unify them into a business wide business change function. This would remove the vertical line (chasm?) between IT and the rest of the business, replacing it with a horizontal line between the business change function and the operational business.

    I’ve been preaching this for years (maybe not loud enough, see but have yet to find a CEO brave enough (in enough pain?) to take this on.

  8. Joe Pearson says:

    I like the distinction that some projects are business projects and some – like server virtualisation – really are IT projects. I suppose one way of determining which is which is to ask: who gets the benefit? (A question too easy to fudge, perhaps.)

    Who decides the requirements for the project, and the success criteria? (In the virtualisation case, the business criteria might be nothing more than “keep services the same”. They might include “save money” but that is a perpetual goal, not a specific one.)

    Who has to act and use the results after the end of the project, in order for it to be a success? That’s the most important distinction. If the business can’t use the product because it doesn’t function well, then IT failed to deliver a business project. If the business won’t use the product because they didn’t bother to participate in reqts, test, uat, etc, then the business failed … and IT should not be blamed.

  9. Michael Keen says:


    great article and I’m glad my statement on that Town Hall meeting sparked something.

    To address Mick Wren’s response, he is right on the money. The problem I run into daily when speaking to companies is that there is a lot of talk about IT and how to work better with the business. Mostly, this is a lot of hot air. The first thing I tell these companies is that they need a framework, but most importantly an organization that understands and embraces change. This is very hard to find.

    I use a graphic in my presentations from a study that McKinsey did late last year where it shows that the majority of business executives believe that technology performance will increase if the technology is under the businesses control. What does this say about IT’s ability to respond and adapt to changing business conditions? It doesn’t speak very highly that’s for darn sure. How do we change that? ITaaS with strong EA and IT Governance models, not to mention understanding how to build solid business cases that just go beyond ROI models etc.

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