IT transformation programmes are notoriously complex, and it’s common for organisations to spend more than originally forecast or to see the programme fail to deliver the expected benefits. In reality, “failure” can result from multiple factors, including inadequate preparedness, unclear programme governance, and weak stakeholder commitment.
IT procurement plays a pivotal role in mitigating these risks. A strong procurement strategy can help ensure that IT transformations are delivered on time, within budget, and aligned to organisational goals.
In this article, we explore some of the most common reasons why IT transformation projects go wrong and explore how a robust procurement-led approach can prevent an IT transformation ‘failure’.
Why do IT transformation projects fail?
IT transformation projects often fail not because of the technology itself, but due to weaknesses in planning, governance, and delivery. The following sections outline some of the most common factors that lead to programmes falling behind schedule or failing to realise their intended benefits.
Project complexity
Large-scale IT transformations are often highly complex, involving the integration of new technologies into bespoke legacy landscapes. Challenges arise when teams struggle to understand new systems or when the complexity of legacy processes cause inertia and slow progress – a core aspect of IT risk transformation.
Common issues include:
- Poorly defined project scope and unclear benefits
- Lack of appropriate governance and methodology
- Insufficient transparency from suppliers regarding deliverables and costs
Without proper oversight, these challenges can lead to project pauses, increased indirect technology, and delayed realisation of the project’s goals and benefits.
Compromising on quality
Large and high-value IT transformation programmes often come with a large price tag and significant internal costs. As a result, they often face pressure to deliver value and benefits quickly. This can lead organisations to shortcut procurement processes or bypass key quality checks. The consequences often include:
- Failure to clearly define the project’s scope, requirements and benefits to help prioritise programme delivery
- Weak programme governance and methodology
- A lack of supplier transparency in terms of deliverables and cost
As a result of these failures, programmes often pause delivery after the contract is awarded in order to reset and implement the appropriate governance and controls. This increases the overall cost of delivery and delays the realisation of benefits.
Addressing these issues requires a structured digital transformation strategy that integrates procurement oversight from the outset.
Lack of programme sponsorship
A frequent challenge is the lack of consistent programme sponsorship. Many programme sponsors need to juggle multiple priorities at once; the programme is just one element of a demanding day job. Many also have limited experience in implementing technology, meaning they often lack the necessary knowledge to deliver large and complex IT programmes.
Engagement and resourcing
Securing sufficient SME and business engagement is critical. Often, business stakeholders take on programme activities alongside other responsibilities, meaning they may fail to understand their own role or importance to the success of the IT programme. Suppliers frequently report unclear requirements and slow approval of designs as key causes for delay during the early phase of the programme.
Additionally, supplier resourcing can result in challenges such as reliance on contract staff rather than experienced in-house teams. Many customers experience issues due to a lack of capable experienced supplier resources to lead key initial phases of the project, such as blueprinting and design. Often, this leads to a complete breakdown in the supplier relationship; suppliers are then replaced, which results in increased costs and further delays.
Unrealistic customer expectations
Key stakeholders often want cost certainty from the outset to align with budget expectations. However, due to the scale and transformative nature of many IT programmes, organisations are often unable to clearly define the full scope and requirements at an early stage.
As a result, selecting an unsuitable contracting approach can be counterproductive: it often creates mistrust and frustration among suppliers who may be reluctant to commit to fixed-price models without significant caveats or cost premiums.
How procurement can drive IT transformation programme success
A well-defined procurement process is central to IT transformation strategy. Early engagement with stakeholders and the supply market allows procurement teams to:
- Develop a clearly defined end-to-end procurement process that delivers the desired outcomes and proactively manages delivery and commercial risks.
- Clearly define requirements and benefits, ensuring alignment between scope and programme goals.
- Establish clear governance and accountability within the contract, including defined roles, responsibilities and RACI structures.
- Assess supplier capabilities, such as capacity by location and role type and reliance on external resources, to create a comprehensive understanding of the supply market and steps needed to assure programme delivery.
- Request transparent resource-based cost models aligned to functional delivery, enabling the business to link costs to benefits and prioritise delivery within budget.
- Allocate dedicated commercial resource to oversee supplier relationships, prevent contract leakage and ensure suppliers meet their contractual obligations.
- Engage regularly with the programme sponsor, providing guidance on commercial risks and issues to support informed and timely decision-making.
Even with these measures, however, IT programmes may face cost increases or delays. As such, it is critical to plan for failure as part of the procurement process and create alternative delivery options to limit costly delays.
Breaking IT transformations into manageable phases
Most IT transformations fail when programmes attempt to “boil the ocean.” Often, stakeholders’ desire to fix costs and gain cost certainty can be achieved more effectively by breaking programmes down into smaller, well-defined sprints. A phased approach enables organisations to:
- Prioritise scope
- Limit complexity
- Maximise benefits realisation
- Reduce commercial exposure
By segmenting delivery into more manageable contracts, organisations can facilitate a low-risk IT transformation that improves stakeholder confidence and increases the probability of programme success.
How Barkers can support your IT transformation strategy
A strategic, procurement-led approach is essential for delivering successful IT transformations. By embedding governance, risk management and supplier accountability into the IT transformation strategy, organisations can reduce the likelihood of failure and improve programme outcomes.
Whether navigating government IT transformation programmes or complex enterprise initiatives, procurement is the lever that transforms risk into opportunity. Barkers supports organisations across the full IT transformation lifecycle, from developing effective procurement strategies through to commercial governance and supplier management post-transformation.