Government’s ICT Project Failure Factors: A

Revisit
Haslinda Sutan Ahmad Nawi1
Azizah Abdul Rahman2
Othman Ibrahim3
Faculty of Industrial Information Technology1
Universiti Selangor, Selangor, Malaysia
Faculty of Information Systems & Computer Science2,3
Universiti Teknologi Malaysia, Johor, Malaysia
[email protected], [email protected], [email protected]

Abstract— Successful implementations of Information and the key areas that support that programme. Thus, there will be
Communication Technologies (ICT) projects act as strong many ICT projects introduced by the government to support their
foundations supporting government transformation programmes. transformation initiative. For that reason, it is crucial to ensure
The aim of this research is to revisit the failure factors linked to that the ICT projects are successfully implemented. The Prime
certain government’s ICT projects. The study analyzes the current Minister of Malaysia, on 15 October 2010, announced the
gap between failure factors in Malaysian government agencies enhancement of ICT as the first strategy of the allocated
(practice) as compared to the literature consulted (theory). Project RM119million 2011 budget. In addition to that, the 10th
management factors and process factors are the two major factors Malaysia Plan (10MP), clearly articulated the central role of ICT
that contributed to ICT project failures in the Malaysian
as a foundation for the nation to vault forward towards a high-
government. We believe that this finding should be studied further.
value economy. In line with that, Malaysia’s government had
Keywords- government’s ICT project; ICT project failure factors; listed ICT as its 12 National Key Economic Areas (NKEAs) in
ICT project evaluation the new economic model (NEM) that intended to build the
foundation for 10th Malaysian Plan. This translates to ICT
playing a key strategic role as an enabler of national
I. INTRODUCTION infrastructure, education and human capital development for the
A government is a huge and complex organisation, which NEM. With this government’s target for making all services
operations and strategic focus could be greatly enhanced by ICT available electronically by 2015, pressure is increasing to address
application which is well focused, in order to support the causes of failure in ICT projects.
improvements in productivity, management effectiveness and This paper considers perceptions of senior officers who
ultimately, the quality of services offered to citizens [1]. During manage and monitor ICT projects in government agencies. The
the last decade, the public sector has globally embarked on a study analyzes and identifies the failure factors of ICT projects in
wide range of reforms and witnessed a growth in the number of the Malaysian public sector as a lesson learned in order for the it
government transformational projects. ICT initiatives is one of to deliver effective service to the citizens through the
the complex change efforts that is intended to use new and implementation of ICT projects.
emerging technologies to support a transformation in the
operation and effectiveness of a government. Reference [2]
supports the idea of ICTs having the potential to transform II. LITERATURE REVIEW
government structures and to improve the quality of government
programs and services. Prior studies as in [3] mentioned many A. Definition ICT Project Failure
national, states, and local governments struggling to make better Despite great efforts by project management professionals in
decisions about ICT investments as part of their transformation developing and implementing standards, process models,
agendas. Organizations in the public sector too are increasingly methodologies, and guidelines on best practices for ICT project
seeking new tools to ameliorate their performance and provide management, the failure rate of ICT projects continues to be
better services to their citizens. For example, [4] contended that high. A survey in 2005 discovered that 31% of Information
many governments around the world are greatly supporting the Systems (IS) projects failed to deliver on time and another 31%,
electronic delivery of public services to the citizens and the within budget [5]. Furthermore, a study by Ernst & Young in the
enterprises, enabling them to make most of their transactions Czech Republic in 2009 revealed that more than 50% of IS
within the government via electronic channels, i.e. E- projects were not finished on time or on budget. 5% of the
government. projects were stopped before they were even completed.

The Malaysian government has so many strategies to realize

their government transformation programme and ICT is one of
 Considering assessing the success or failure of ICT projects is • Context-driven: factors dealing with culture, leadership,
somewhat subjective, [6] categorize different levels of project and organizational issues.
failure as below; • Content-driven: factors related to technology and
• Total Failure: An ICT project which has ended up as not business process, the ―what and the ―how.
being implemented, or a new project that has been • Process driven: factors related to strategic formulation
implemented, but eventually abandoned. and change management or under the influence of the
• Partial Failure: Major goals of the ICT project have not project manager.
been attained or significant undesirable outcomes are
experienced. A reasonably clear form of partial failure is A different approach has been used as in [10]. They
sustainability failure where a project succeeds initially, categorized the framework as consisting of four quadrants:
but then fails after a year or so. • Customer: focuses on risk factors relating to customers
• Success: An ICT project attains its major goals and does and users. These factors are often beyond the project
not experience significant undesirable outcomes. manager’s control.
• Scope and requirements: focuses on risk factors
Another survey conducted by [7] shows around one-third of associated with a project manager’s inability to judge a
IT projects were classified as successful in its studies in 2004, system’s scope.
2006 and 2009 (see Figure 1) and the failure rate of IT projects • Execution: focuses on such risk factors as inadequate
has actually increased further since 2004. project staffing, inappropriate development
methodology, failure to define roles and responsibilities,
and poor project planning and control.
• Environment: focuses on risk factors in both internal and
external environments, including changes in
organizational management.

Reference [11] who studied the cause of problems with the

Dutch government’s ICT projects categorize factors that could
affect the project in threefold;
Average Cost Overrun: 45% Time Overrun: 63% Functionality Delivered on Average: 67% • Political complexity.
Figure 1: Project Success Rate [7]
• Organizational complexity.
• Technical complexity.
The Standish Group categorizes projects into three resolution
types; Reference [12] in his study, believes that any symptom of a
• Successful: The project is completed on time and on project failure should belong to one of the 6 generic types of IT
budget, with all features and functions originally project failure root causes: project management factors; top
specified. management factors; technology factors; organizational factors;
complexity / size factors; and process factors as in Figure 2
• Challenged: The project is completed and operational,
below;
but over-budget, over the time estimate, and with fewer
features and functions than initially specified.
• Failed: The project is cancelled before completion or
never implemented.

While [8] has several ways to define the successes or failures

of a project:
• The project met its scope, time and cost goals.
• The project satisfied the customer or sponsor.
• The results of the project met its main objective.

B. ICT Projects Failure Factors

A number of studies have dealt with the concept of success /
failure factors in ICT projects, and some different types of
models have been established. Reference [9]’s survey, conducted
in 2000, of close to 100 respondents associated with a major
project failure in Singapore, grouped failure factors into three Figure 2: IT Project Failure Root Causes [12]
organizational categories as below;
 All 4 approaches focused on the domain of IS and ICT organizations must have proper planning in IT investment.
project. Research on IS and ICT failure phenomena has been Hence, highlighting IT governance practices by realizing the
conducted in diverse perspectives. Reference [13] agreed that a advantage of deploying IT governance model is crucial in order
fundamental reason that causes IS projects to fail is that they are for the Malaysian public sector to retrieve competitive advantage
too complex. Because of the complexity, projects must handle its and thus decrease the rate for IT project failures [20].
complexity factors and also other major factors such as
technological, organizational, top management and project Meanwhile [21] puts an emphasis on a systemic approach to
management. In addition, [14] opined a process failure occurs project success or failure. This means that the ICT projects have
when an IS cannot be developed within an allocated budget, and / to be aligned with business strategies, and the project portfolio
or time schedule. Considering all these factors, the study adopted management also needs to be adapted to the organizational
IT project failure root causes proposed by [12]. strategy and culture. The Malaysian public sector should pay
attention to focusing on the selection and management of a set of
projects that meet specific government strategic objectives
C. Government’s ICT Project Scenario towards effective service delivery to its citizens. Reference [20]
While the benefits of ICT in a government cannot be in their studies found that the proposed ICT project should be
disputed, there are several concerns about its success as well as evaluated and prioritized according to several criteria such as
the strategies to be adopted in implementation of systems in alignment with ISP, alignment with NKRA (National Key
various countries. In recent global history, studies show that Results Area), alignment with organization’s vision, mission and
managing projects are challenging as it is. There are many objective, and budget approval by the government.
projects that fail due to various reasons. Putting ICT initiatives
into practice is not easy, in fact, according to [15], majority of e-
service implementation in developing countries fail, with 35% III. METHODOLOGY
being classified as total failures (e-government was not The research methodology being used in this research was
implemented or was implemented but immediately abandoned), qualitative method. Analysis of the factors contributing towards
and 50% as partial failures (major goals were not attained and or the ICT projects failure is the subject examined in this research.
there were undesirable outcomes). Reference [16] found that, Three steps were involved in this study.
most large IS projects will exceed their original budgets and
timelines by more than 50%, and much more often in A. Literature Review
government than in private industry. In addition to that, there are The researchers identify the failure factors from the literature.
evidence that “runaway” projects occur frequently, and new The study only focuses on application system development and
empirical evidence that they occur more often in government ICT system enhancement projects. For this reason, the study
organization [16 & 17]. Reference [18] concluded that successful adopted the six generic root causes [12] that is believed to be
deployment of IT solutions in public organizations relies, among highly suitable for the application system domain.
other factors, on the presence of clear IT strategic goals and on
the efficient integration of IT into government organizational B. Interview
development. Furthermore, in their studies, the findings indicated 6 respondents from the Malaysian public sector were
clearly that the success or failure of such projects is caused by the interviewed - 4 of the respondents were the senior officers who
role of top management rather than technological issues. managed and monitored ICT projects for the past 10 years.
Another 2 respondents were officers who have had more than 5
As ICT projects are renowned for their high failure rate, in years experience in monitoring the ICT projects. Data were
Malaysia, the government has recognized the problems related to interpreted based from the respondents’ experience and example
the successful development of ICT systems, especially software given during the interview sessions. To assure consistency, the
projects. In the Malaysian public sector, the implementation study adopted the failure definition used by the Standish Group.
approaches of the ICT projects handled are: in-sourcing (internal The Standish Group categorizes projects into three resolution
personnel and expert); outsourcing (external services); and co- types which are;
sourcing (external services with internal expert). Subsequently, • Successful: The project is completed on time and on
the types of the ICT project are; ICT research; ICT strategic plan; budget, with all features and functions originally
application system development; hardware and software specified.
procurement; ICT system enhancement; expansion of ICT • Challenged: The project is completed and operational,
system; and ICT compliance and fortification. According to the but over-budget, over the time estimate, and with fewer
Attorney’s report in 2006, customs spent RM 290 million for features and functions than initially specified.
underutilized systems and as a solution, they have appointed • Failed: The project is cancelled before completion or
Deloitte Consulting firm to prepare a plan worth RM 451 million never implemented.
to overcome this problem [19]. The Ministry of Health has also
invested in ICT for the MyHealth project but resulted in the
project being extended from 2007 to 2012 [19]. This shows that
C. Data Analysis of scope of the original contract, without the time or resources
From the interview, the responses gathered were classified to within the contractual allocation to actually deliver.
the identified failure factors from the literature. Most of the Project Managers had no project management
skills and sometimes, no appropriate ICT background.
The methodology use in this study is summarized as in Figure Sometimes, not only the project manager but the entire team has
3. weaknesses in managing ICT projects. Some project managers
still fail to make good project managers despite having IT
background. In addition to this, another common scenario is the
failure to involve the right people for the project because of
‘office politics’ during the project implementation. An example
of this is favouritism, where the selected person is the favorite
person of the person in charge of the department.
B. Top Management Factors
It is vital for senior management to be supportive of a project
and to provide the necessary resources to carry it out. However,
inappropriate ICT knowledge, lack of familiarity, and
background among the top management who were selected and
decided on the project with the target technologies will cause
Figure 3: Research framework inaccurate decision and eventually contribute to the project’s
failure.

IV. RESULT AND DISCUSSION C. Technology Factors

The result of the research contributes to the identification of The developers fail to align the system design and technology
21 failure factors which influenced the ICT projects of the used with the current technology, which resulted into
Malaysian public sector. These sub factors were re-classified into inappropriate systems with old design and obsolete technology.
6 main factors: project management factors; top management This always occurred with the overextended schedule project.
factors; technology factors; organizational factors; complexity / Apart from that, low quality of the end product is also mentioned
size factors; and process factors. during the interview. This relates to the technological factors and
the fact that the person responsible and accountable not
A. Project Management Factors possessing appropriate ICT background. Another complicating
The issues of not meeting the user requirement were common technological factor is that ICT systems often have to be
issues arising in most of the projects. One of the respondents said connected to other systems already in operation. Compatibility
that, it is caused by the failure of the vendor to get user between ICT systems – already a major issue within a single
involvement in the project. In some cases, different officers were agency – becomes especially challenging where a number of
assigned for the same module and this made it difficult for the agencies are involved.
vendor to get a consistent cooperation. D. Organizational Factors
Controlling and managing risk in ICT projects is considered
to be a major contributor to project success. Not managing the The average cost of a project has been cut by the government
project risk until it becomes a problem was also highlighted by due to the economy downturn scenario. In other cases, there are
the respondents as a major cause of project failure. One of the agencies or the project champions which did not accurately
examples given is that the project was behind schedule because complete the project cost estimation which resulted to budget
the vendor could not deliver the product due to shipping overruns.
problems. A better risk management, as a project and E. Complexity / Size Factors
organizational capability, is critical for the ICT project success in
Size and complexity of the projects also cause delay and
the public sector environment.
frequent budget overruns. The number of agencies involved is
Other than that, underestimating the complexity of the project
too high and it becomes complicated because their business
task and activities also leads to more resources required to
processes are related and require exchange of information.
resolve the resulting issues. Furthermore, inadequate project
Central steering of the project is difficult or sometimes even
planning causes a delay in project implementation, which
impossible in these cases.
resulted into inappropriate systems with outdated design and
obsolete technology. F. Process Factors
Another common occurring issue is when either side fails to Project was given without any prior feasibility study, due to
adhere to the contract during the project as a result of inadequate no project selection process. In addition to that, two respondents
resource or contract management or change control processes. An said the selection of the project is not based on government
example of this is, the vendor agreeing to take on extra work, out strategic plan such as the NKRA, NKEA and etc. They also
mentioned that while selecting the project, the government V. CONCLUSION
doesn’t have an appropriate ICT project evaluation process. The From the findings, the failure factors were classified into the
respondents also highlighted that one of the causes of project six generic types of IT project failure root causes by [12]. This
failure is that no business process reengineering (BPR) takes means that such factors are not unique to the Malaysian
place before the project starts although the project is big and government, yet it must be considered in future in managing ICT
complex. Other than that, there is no standard methodology used projects. However, major factors are focusing on the project
during the project execution. The projects always depend on the management factors and process factors. Project management
vendor’s methods of project management and execution. As a factors are currently being solved by the government by adapting
result, it is difficult to monitor the project. a standard project management life cycle. The authorities are also
In several projects, the vendor didn’t get user involvement in the process of educating the ICT project managers in the
especially during the user acceptance test. As a result, users did public sector by providing internal workshops on project
not use the system after it has been implemented. This happened management. The process factors are currently less addressed by
due to the systems not meeting their requirements and work the authorities and require further research where we will
process. In addition to that point, the users complain that the consider in our further investigation. Within that process factor,
vendor failed to follow their expectations. two of the interrelated subjects that could be the issues that need
further investigate are the absence of a project selection process;
The classified and identified failure factors are as depicted in and the need for a systematic and appropriate ICT project
the Table 1. evaluation process to be in place. In addition to that, top
management factors reported that there are inappropriate ICT
Table 1: Classified Failure Factors
knowledge, lack of familiarity, and background of ICT among
the top management who selected and decided on the project
Identified Failure
Factors from the Classified Failure Factors from the Field
with the target technologies. Furthermore, [20] supported that
Literature there is no specific IT governance practices model for IT project
1 Lack of user involvement. approval and implementation in the Malaysian public sector. This
means that it is necessary to pay attention to the way ICT projects
2 Mismanaging of project risk.
were selected in the public sector.
3 Inadequate estimation of work. However this study only involved 6 respondents who are
Project 4 Breaching of contract. Malaysian government officers. It identified failure factors that
1 Management 5 Lack of project plan. will be associated and related to our next investigation on
Factors
6 Lack of skills and knowledge in project sustainable e-service.
management .
7 Inadequate ICT background for Project
Managers. ACKNOWLEDGMENT
Top 1 Incompetent in making decision on I would like to thank the editors and reviewers for their
2 Management selecting ICT projects. suggestions on this paper. Their comments helped to make this a
Factors
better piece of research.
1 The design and technology used not inline
with the current technology.
Technology 2 Low quality of the end products.
3
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