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Why internal IT projects fail.

Outsourcing, programming, IT projects

Why internal IT projects fail

It's 6 PM. I just came back from a business meeting where I had the opportunity to talk to people from the industry and exchange notes on sth with potential clients. Do you know this kind of meetings? There are a dozen or so guys sitting in one room, each of them is working in the industry for many years. Every each of them is a specialist in his field. This is the best place to catch the contacts, listen to unique stories and learn a bit about the market. It was the same this time, but the story I listened to showed me how little I know about this industry yet.

Hunting for antelopes

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The thing about meetings, or more precisely business conferences is that sometimes the most interesting are not lectures, but conversations over a coffee. Of course, the first coffee is a reconnaissance. Each of us is then a lion who wants to catch an antelope, get to the most interesting speakers and ask them questions. So we stood in the hotel lobby, squeezing cups and looking for groups to join. At one point I noticed a man who, like me, was waiting and watching. Without thinking longer, I went over and I greeted. After a quick exchange of courtesy, it turned out that I was talking to Robert, the senior manager of a British company. I do not give it its name, because it's the least important thing right now. More important is what we started talking. We talked about outsourcing projects and that several unsuccessful in-house implementations forced the management to change its mindset. During the last, dinner break, Robert told me the whole story.

The story of one project

Robert works for a company selling home and garden equipment. You know: everything from soup to nuts - from plastic cacti to concrete lions, posed in front of the door by the owners of the nouveau riche suburban homes, thinking they are modern Caesars. For a long time company has had two problems: the first was the lack of good internal communication, the second - incredibly outdated software that can be called CRM. As there was a small IT department in the team (including two proficient programmers), it was decided to give them a job to improve the old software written many years ago, combine it with the sales, warehouse, accounting, and logistics systems. Just such all in one machine. Additional funds were reserved in the budget and the time of the first meeting of the working team was established. It was supposed to take place a few days later.

Little earthquakes

Before Robert went on to the rest of his story, he made a small introduction. The company in which he works employs about 50 people. It would seem that with such a small number of employees, the flow of information and the implementation of internal projects will be extremely simple. Unfortunately, as in many teams, the marketing and sales departments did not always get along. As for the new e-commerce project, here emphasis was put on Magento, but eventually, another open source solution was chosen. Until then, everything looked ok, but the problems started at the first meeting with programmers and employees which will use CRM.

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The meeting was set for Monday - just after lunch - so that everyone would have coffee, dinner and some of their duties behind. No one thought then that the second half of the day would be spent on a non-productive business meeting that did not bring anything to the project. Why? 25 people took part in the meeting, that is half of the employees. Employees who did not do their jobs for the rest of the day. If we count that every one of them earns an average of £25 an hour and the meeting lasted for 5 hours, then simple math shows that company paid them more than £3,000 just for sitting and sharing ideas. Of course, this calculation is a big simplification, but it's about showing the scale. There were several such meetings at the first stage, and in fact, they only led to a few very basic assumptions.

Assumptions of the new CRM, made after 5 hours of the meeting:

  • simple in use,
  • connection with the scanner to automatically add invoice scans,
  • different access levels,
  • history of actions and changes,
  • nice, clear interface,
  • lead segmentation,
  • adding trade credit to the client,
  • integration with accounting and warehouse,
  • XML implementation,
  • adding tasks, setting priorities, in other words a task manager.

Of course, those are the most important ones that came to mind when exchanging ideas. Apart from them, a list of 50 more other appeared. At this stage, of course, the IT department was already talking about how they intend to do individual elements, and this knowledge was not needed by marketing employees or even management.

Nothing indicated that the project would be a failure

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After 10 days someone came up with the concept of not collecting more ideas and that meetings should only be carried out with a team of programmers. This time everything went much more smoothly, but here more problems appeared. First of all, the team had to be divided between the e-commerce and CRM project.

At this stage, someone was enlightened that CRM will have to be connected with the new store anyway. What's more, it was confirmed that existing CRM will be modified, because it will be faster and cheaper. Robert explained.

My interlocutor for a moment fell silent and pulled out the laptop from the bag next to the chair. A few moments passed and he looked up from the keyboard. He turned the computer over to me, showing me some statistics. He collected them sometime after the implementation went so badly that he began to worry about his job. He has managed the sales department so far, never supervising the work of programmers, he did not know what to demand of them and what are the real milestones of such works. On the screen, among others, there was research by McKinsey & Company, showing that 17% of IT projects go so badly that it threatens the existence of the company, 70% of projects are not implemented at all, and only 2.5% of all projects are completed in 100%, it's Gallup research. These are just a few of the statistics Robert showed.

What went wrong?

First of all, it was a mistake to distribute employees between two projects (CRM and e-commerce) and work with the old CRM engine. For a few days, nobody knew who had prepared the previous code, where the documentation was, and the person who was responsible for that implementation was not a company employee for a long time. Besides, there was no one to entrust with the coordination of programmers' work. That's why Robert got this job as an additional duty, which led to a situation in which his work began to be neglected. Nobody controlled the implementation itself. The new CRM began to be a monster, a hybrid of old and new, which once works well, and in other moment throws an unexpected "crash". There have been many occasions when the sales department could not complete the order because something did not work again. At the same time, the e-commerce project was not implemented, none of the programmers was a graphic designer, and someone had to cut the graphic designs of the store, so the company began to look for someone who can do it. So it took about 11 weeks, which did not move works any further. Finally, Robert went to the board and the proposed outsourcing of the project.

Prepared for the worst

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So far, the company has not spent a large part of the reserved budget, because the work was done internally, but all the time there were losses that were caused by the current project. When looking for solutions, Robert decided to review the offers of software houses. He stated that the outsourcing to which the management was so negative, could be the best solution. He provided himself with a small brief, which showed, on examples, and most importantly on numbers, the benefits of delegating tasks outside. The most important was the information that 27% of companies outsourced processes to cut company costs because this method can save up to 60% of the assumed costs. 57% of companies declared that thanks to this they can focus on the main activity of the company, which avoids losses. The talk with the management was turbulent, but due to the fact that the budget was not yet broken, Robert was allowed to act.

Expert support

The market analysis allowed for quick verification of offers. The first conversations took place as well as meetings. In the end, it was decided to choose programmers from Poland, among others because they had a great reputation, and besides, they were much cheaper than their foreign colleagues. At first, somewhere in Robert's, mind there was a fear of how they would manage communication, what the implementation would look like, etc. He was afraid that he would not have control over the task when no one from the outside team would work in the office. However, his doubts were quickly resolved.

A few days later, two employees chosen during the analysis of software house offers appeared in Robert's office. They spent 7 hours together, during which they analyzed the needs of Robert and his employees. They got acquainted with the current company structure, and most importantly, they personally saw what processes and communication between departments look like. There were three such meetings, but they were very different from the mentioned brainstorms. In this case, short interviews were conducted with employees, they were given a questionnaire to fill out, which helped to select the most important needs and problems. These two people gathered more information for implementation in a few hours than the Robert entire team in several days. This was mainly due to the fact that external developers worked according to a methodology that facilitated their work and helped to predict what events could occur at every stage of cooperation. For Robert and his employees Agile, Waterfall, or MoScoW, these were just words, but for coders, it was a travel map.

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The main needs that emerged during brainstorming were quickly verified. It has been decided that the internal IT department will support outside programmers, which will additionally make them able to increase their knowledge. Duties were delegated, but most importantly, three main elements were identified, which were previously only outlined: the budget, the plan of action with dates and the full specification. In addition to the project, a project manager from a development company was assigned, who took Robert's responsibilities from him, thanks to which he could focus on the work of his subordinates. This person managed a total of 7 people, three of them were employees assigned from Robert's company. In order to avoid one of the most important problems of project implementation, i.e. communication noise, which is reported by 57% of the surveyed project managers, an online project management tool was used in which all the information, remarks and changes were available. Each person responsible for the work had access to the necessary data, and it was also seen how the work goes. Reporting was set for 7-day periods, thanks to which one party could work calmly, and the other knew that every Monday they would receive a list of completed works and information on how far to close the project is.

Maybe it's not a fairy tale, but...

Implementation was successful. Robert noticed that during the cooperation two or three times there were minor clashes, which resulted from understatements, but eventually it, was possible to finalize the cooperation. The entire CRM was rebuilt and connected to the store. Several processes have been improved. Robert, now in love with the LEAN methodology, introduced several changes to the circulation of documents and acceptance of sales cards, thanks to which several hours of work per month were saved. As a last resort, the whole extended for 4 weeks due to additional implementations, which were not mentioned at the beginning. Even with these additional works, the project was completed with expenditures 30% lower than planned.

The lesson for the future

At the end of his story, Robert closed his laptop and reached for a cup of coffee. I was curious about his opinion on cooperation with a software house. I wondered if he would ever need help again, would he take the same step. The answer was one. He stated that the biggest problem was the belief that his small IT department would cope with two large implementations. Software house has its own group of developers, specialists from various languages, graphic designers, and experts who can do anything. There, even one person is able to lead the project alone and find a solution to the given problems. They are versatile people who can work in a team, as well as individually. In addition, they coordinate the work of their team themselves, they want to finish the order as quickly as possible, a creation of the highest quality code, because in this industry news spreads quickly. The methodology of their work, internal discipline and the fact that they focus on one project, without unnecessary distractions, make them operate more efficiently, faster, and most importantly cheaper than some internal teams. And one more thing - the models of work: body leasing, team leasing, as well as total outsourcing of the project, make them tailored to the requirements of each client. It does not matter if we work with a team of 5 or 50 people, this way of thinking and analyzing speaks for this group of specialists. In addition, there is one more thing. Polish programmers are among the world's top experts and employees. Another work culture, as well as the aforementioned knowledge, means that nothing is impossible for them. For Robert company, it was a valuable lesson.

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That's how our meeting ended, I listened to his story with great interest. It turns out that many companies still do not exactly know how they operate and what software houses do. Also that the help of external developers is much cheaper than hiring their own specialists for one project. Most importantly: the customer always receives full support from the team of developers and he is not left alone. Often, with the implementation, he receives several months of support.

We sat with Robert for a while, exchanged business cards and finally, we shook hands with goodbye. Maybe someday we will meet at another business conference, or maybe as a partner at the next implementation.

Adam Trojanczyk

CEO of Cat In Black Software House (a software house that builds awesome apps). He was employed by the largest digital agencies. He is also the founder and CTO of Tap To Speak (the award-winning worldwide application).

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