When to Pull the Plug on a Failing IT Project

The famous phrase “the best-laid schemes of mice and men” should be taken to heart when considering whether to cut your losses and cancel an IT project that’s falling substantially short of expectations. Even IT projects that were carefully planned, backed by upper management, and offered realistic goals can go wrong. Understanding when to pull the plug is a skill that IT leaders must be capable of learning and following through with if specific conditions are met.

Here’s a look at three key indicators that suggest that it might be time to call it quits:

1. Negative ROI

There are multiple reasons why an expected return on investment can go pear-shaped. Perhaps the initial implementation costs did not factor in new or hidden costs. Or maybe the expected value or lifespan of the technology was overinflated. It’s also common to underestimate ongoing maintenance costs of cutting-edge technologies. Regardless of the underlying issue, the ROI of any project should be continuously monitored. In certain circumstances, negative returns can form with little recourse other than to cancel or pause the project with plans to reevaluate when ROI factors become more favorable.

2. Long-term strategic advantage dissipates

If implemented properly, technology can be used to create significant competitive advantages in several ways. However, timing is of the utmost importance as there is usually a finite timeframe where these advantages can be achieved. Start a technology project too early and you risk running into unforeseen hurdles that trailblazers often face. At the same time, if you wait too long, competitors can catch up or surpass your tech ambitions.

Depending on the size and scope of the project, technology can advance faster than your implementation. This can create an end-product that ends up being inferior and less impactful than was originally thought. If your project leans heavily on strategic business advantages, never be afraid to ask to reset or rethink an implementation if the rollout timing has gotten out of line. Not doing so can cause you to run the risk of failing to meet business goals, which may be viewed as a bigger failure than canceling the project in the first place.

3. Legitimate user backlash

Perhaps the trickiest IT rollout issue of all is when a technology fails to be a fit from a company culture perspective. While rare, this can happen from time to time. The key is to understand the user base well enough to be able to determine if a new technology is being criticized simply because some users struggle to adjust to change -- or whether it is a legitimately poor fit. In many cases, a technology may improve certain processes or open new time-saving or revenue-generating streams. At the same time, however, new technologies could abandon processes or features that employees find to be invaluable.

In an ideal world, these issues should have been vetted prior to launching the project in the first place. But as we all know, changes to technology, integration approaches, expansions, or contractions in who will use the application, or pivots in business strategy can turn any promising IT project into one that’s going to be disdained by users and ignored at all costs.

Accepting Failure Is a Strong Leadership Quality

Personally speaking, the very first project I oversaw in my IT career ended up as a massive integration failure. Obviously, I felt terrible about the time, money and resources wasted. I was also concerned about what my superiors would think of me when I suggested that the project be scrapped. 

After communicating my concerns and the pros and cons of soldiering on vs. halting the project, I was surprised at the reaction I received. Instead of being angry, upper management actually thanked me for taking a realistic look at the potential outcome of the project and the risk/reward it would have on the business. From that experience, I learned that knowing when to accept failure is one of those unwritten rules in business and life in general. When the need arises, you should never be afraid to make the most logical decision on any IT project -- which in some cases -- will be to pull the plug.

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