Build often says “more than 50% of nonprofit technology projects fail.” We say this not to dissuade nonprofit organizations from pursuing technology improvement projects, but rather to start a conversation about the primary reason failure occurs: the technology moves forward, but the organization does not.
In evaluating both the cited “50% failure” statistic and the reason we offer for why projects fail, we think it is fair for any nonprofit organization to ask any or all of these questions:
- How does Build Consulting define “success” or “failure” for nonprofit technology projects?
- Where does the “50% failure” figure come from?
- What do we mean by “the technology moves forward, but the organization doesn’t?”
- What can my organization do to make sure our technology project is successful?
- What if we can’t do it on our own?
In this article, we answer each of those questions, and in doing so will provide links to resources that will help you become an advocate for successful technology project approaches at your organization.
1. How does Build Consulting define “success” or “failure” for nonprofit technology projects?
Build defines success in a technology projects as “achieving the intended benefits”—not just in the short term, but for however long that intended benefit was to last. A project is a failure when it doesn’t realize the intended benefits. If yes, the project was a success. If not, the project was a failure.
Example: If your organization implements a new CRM system for the primary purpose of increasing revenue, and revenue does not increase, the CRM project is considered a failure.
2. Where does the “50% failure” figure come from?
Statistics specific to the nonprofit industry are hard to come by. The Nonprofit Technology Network’s (NTEN) highly valuable 10th Annual Nonprofit Technology Staffing and Investments Report identifies some of the characteristics of organizations that report high technology effectiveness and user adoption levels, but that doesn’t translate into a project success/failure rate. So, we’re extrapolating from broader industry statistics, plus Build’s own experience, to come up with our number.
Build Consulting studies the below articles and related research reports, applies our definition of “failure,” and adds the percentage of projects that fail outright (are not completed) to the percentage that are completed but do not deliver the intended benefit. We then relate that to our own experience serving hundreds of nonprofit organizations. In the final evaluation, we believe that our “more than 50%” statement is accurate based on the available information—and memorable for both ourselves and other advocates for nonprofit technology excellence.
Here are some third-party articles and reports for you to consider (listed from least to most recent).
- IAG Consulting / ZDNet. An IAG Consulting research report, published in 2009 and covered on ZDNet, indicated that “success in 68% of technology projects is improbable”—with “improbable” defined as delivering marginal success or outright failure. The research found that “over 50% of organizations surveyed do not have even basic pieces in place to be successful at business and software requirements” and that “70% of organizations do not have the fundamental competencies within business requirements discovery to consistently bring in projects on time and on budget.”
- IDC / IBM Systems Magazine / Forbes. Another 2009 report, this one from IDC—and later written about on IBM Systems Magazine and Forbes.com—found that “25% of IT projects fail outright, 20-25% don’t provide [return on investment], and up to 50% require material rework.” The study indicated that 54% of IT project failures can be attributed to project management, whereas only 3 percent are attributed to technical challenges.
- Innotas / CIO.com. A 2013 survey from cloud portfolio management provider Innotas, and covered by CIO.com, revealed that over 50% of business surveyed had experienced an IT project failure within the last 12 months, a statistic that rose to 55% in 2015.
- PMI / CIO.com. PMI published its 9th Global Management Survey (2017), which was also covered in CIO.com. That study stated that across all industries in 2016, the average percentage of projects deemed failures is 14%, and the average for IT projects deemed failures is also 14%. “Success” was defined by taking into consideration traditional measures such as “on time” and “on budget” as well as whether the projects succeeded in accomplishing the intended business benefit. However, in Build’s opinion, the best figure to look at from the PMI study is that only one in three organizations (31%) reported “high benefits realization maturity” for their project.
3. What do we mean by “the technology moves forward, but the organization doesn’t?”
Build Consulting’s experience is that most nonprofit technology projects fail because of other factors than technology. What do we mean by that? Simply that in today’s market, nonprofits have access to a broad range of quality technology solutions. There’s a good (or at the least, good enough) solution for the vast majority of needs.
In reading the brief article/research highlights we provided above, you’ll see a theme emerge: the challenge is often not the technology, but the fact that organizations do not first identify and make the organizational changes necessary to successfully select and implement new technology—or make significant improvements to existing tech.
No, the challenges are largely cultural, orienting around leadership and governance, operational capacity, business process, and data modeling—and then technology. That’s why Build Consulting formulated its Information Strategy Framework™ to help clients explore these considerations. (See also our whitepaper: Build An Information Strategy for Your Organization.)
To that point: so many of nonprofit technology projects are about helping organizations become more data-driven, but results reported in successfully creating “data-driven cultures” are mixed—and by some estimates success rates are declining rather than increasing. If you’d like to review success ratings in achieving transformative change through creating data-driven cultures in the enterprise corporate world, including highlighted findings from studies by NewVantage Partners, Devo (no, not that Devo), and Gartner, you can read this Information Week article from September 2018. But the bottom line is that to improve the culture, it is the culture you have to change, more than the technology itself.
Yes, there are technological challenges to be addressed, but as NewVantage discovered, “48.5% of executives said the problem was related to the people in the firm, while 32% blamed processes, and 19.1% pointed the finger on technology.”
4. What can my organization do to make sure our technology project is successful?
Combining findings across the studies cited above with our own extensive experience, organizations that have high project success rates have the following key qualities (among others):
- Identify business benefits at the start of a project
- Should be done as a collective effort, including all necessary stakeholders
- Agree what purposeful actions during implementation will ensure benefits are realized and sustained once the project ends
- Have actively engaged executive sponsors
- Visible participation and communication
- Prioritization, support, and accountability
- Perform thorough requirements discovery
- Both business and technical requirements
- A risk assessment, particularly for large projects with complex goals
- Focus on developing business skills of project professionals, including
- Planning, communication, teamwork, time management, and change/adaptation skills
- Bridge the divide between strategic vision and implementation with strategic project management
- High-quality project planning and direction
- Strong change management, including leadership alignment, communications, training and support
- A collaborative, iterative approach to design and implementation
- Supportive tools for project collaboration, including milestone, task, and content/file management
The fewer of these attributes that are present in a project, the greater the risk of failure. It is both that simple, and that complicated for organizations trying to approach technology change.
Build Consulting has a growing set of informative blog posts and resources (nonprofit technology videos, whitepapers, templates, and success stories) that you can leverage to help inform your organization regarding how to best approach technology initiatives.
5. What if we can’t do it on our own?
Nonprofit organizations generally come to Build Consulting when they (or one of their leaders at a prior organization) have experienced one or more failed technology projects and wants to position their organization to succeed when approaching upcoming technology initiatives. And it makes sense that organizations might not have the internal capacity to “go it alone” when approaching major technology efforts. As one of our clients put it, “Our core competency is running programs that fulfill our mission, not running CRM implementations.”
Even the largest nonprofit organizations might not have all of the perspective, skill sets, or bandwidth needed to successfully conduct technology projects.
Sometimes organizations are sure where they have gaps and move to fill them. For example, some organizations bring in an outside strategy consultant to help refresh their technology strategy every three years. Others always bring in an outside technical project manager or change manager to support each major software implementation.
Other times, organizations aren’t sure what they might need, and need someone to help assess potential needs and then collaborate to arrive at solutions.
Whatever the scenario, Build Consulting serves nonprofits by applying the right resources (people and tools) at the right time, and supporting those resources with our full team’s knowledge and expertise. But whether you are considering Build Consulting, another firm, or an independent contractor, here are three guiding principles you can apply to make sure you are getting the right kind of help.
Does the firm or consultant under consideration:
- Understand that organizational transformation is critical to technology project success?
- Have the skill sets and processes you require to help your organization achieve the necessary change?
- Take a solution-agnostic approach that avoids predetermining the best technology for you?
Build Consulting was created for the purpose of helping solve the 50% nonprofit technology project failure problem. We’ve devoted our careers to understanding not just the nonprofit sector and technology, but also the mechanics of how change successfully occurs within nonprofit organizations.