As time and technology march forward, a once-successful project may begin to outlive its usefulness. If the IT investment is no longer providing the expected value or ROI for the business, it becomes a financial drain and should be terminated.
Every IT investment needs to be periodically subjected to a business case analysis to determine if the initiative is still meeting its expected goals. And when the business need for the investment is no longer required, the IT investment should be terminated. If the need still exists, then a new IT investment with a more favorable ROI must be selected and implemented.
Knowing when to end a failing IT investment before it collapses, wiping away time, money, and competitive advantage is a skill every top CIO possesses. To acquire this ability, a combination of experience, insight, and a willingness to pay attention to the warning signs that indicate a once-promising IT investment may soon be failing, is crucial.
Here are a few key indicators that suggest the project is not only failing to meet expectations but likely headed toward complete failure.
Constant Reexaminations and Revisions
Every strategic IT investment has its risks, but they are also forward-looking in nature. But if an investment leads to a project that isn’t fully up and running within a pre-defined time-frame, CIOs must rethink the initiative’s goals and strategy and invest their time and money someplace else.
Furthermore, funding investment in a phased manner, instead of entirely at the beginning, can help ensure a project’s long-term success.
The project has gone Off-Track
One of the biggest red flags is the indicators that an investment may be drifting away from the pre-determined goals.
IT investments are initiated to support and enable specific business goals. If there are any signs that anticipated project outcomes may be misaligned with goals, it should be examined closely, and CIOs must re-evaluate the project.
Declining End User Support
It is crucial that an investment deliver some form of meaningful value to its target users. When a project generates little or no user interest and has faded into the background, it becomes merely a burden on enterprise resources.
Declining Sponsor Support
The most significant indicator that it is time to plug an investment is when key stakeholders start abandoning the ship. This suggests that the investment may no longer be relevant or practical to enterprise operations.
Furthermore, if a project is deprioritized and underfunded, it is a sign that the investment program is no longer fulfilling the business needs.
Failing to Generate Business Results
Sometimes an initiative may fully meet and even exceed every anticipated technical goal but still fail to deliver any measurable time, financial improvement, or productivity. These projects do not decrease costs, or increase revenue, or take market share from the competitors.
Quite often, many CIOs discover too late that the project lacks any compelling ROI after vast amounts of time and money have been poured into the project. It is crucial that CIOs pull the plug on these types of investments, in time.