Information and Knowledge Management using ArcGIS ModelBuilder

Investigating the Relationship of Managers’ IT Competency
and IT Projects’ Risks
Mohammad Abooyee Ardakan, Babak Sohrabi and Vahid Saadat
Tehran University, Iran
abooyee@ut.ac.ir
bsohrabi@ut.ac.ir
vsaadat@ut.ac.ir
Abstract: These days, applying IT in organizations is inevitable, either for higher performance of current
processes or as a key success factor in competitive advantages. For IT deployment in organizations, developing
information systems as separate projects is needed. IT projects encounter variety of risks and it seems that IT
competent Managers will handle better IT project risks. In the present article, we have investigated the
relationship between Managers’ IT competency with IT projects’ risk exposure. The construct of IT competency
has been considered using two dimensions of IT Knowledge and IT Experience; and for Risk Exposure, projects
risk has been evaluated along five dimensions: Technological Newness, Application Size, Lack of Expertise,
Application Complexity and Organizational Environment. This survey involves 100 managers who have
responsibility in selecting, outsourcing, consulting, leading and managing IT projects in their organizations. We
have used Structural Equation Modeling with LISREL to test this relationship.
Keywords: IT projects, managers’ IT competency, IT projects risk
1. Introduction
No wonder that there has been a dramatic increase in the use of IT alongside different businesses
and so many IT projects are being started every day. Research tells us that 30- and 70-percent of IT
projects fail in some important way, leading to global economic waste totaling perhaps trillions of
dollars (Krigsman, 2010). These statistics highlight that many IT Projects in organizations have been
failed or faced with some major risks. There have been some attempts to quantify the failure of IT
projects. Sessions (2009) proposed a model that quantifies the dollar cost of IT failure worldwide. He
concludes that the global IT failure costs the world economy a staggering amount of $6.2 trillion per
year, or $500 billion each month. Poorly managed IT projects are a significant source of financial
waste, so we must applaud these efforts, even though significant results may take years to achieve.
Failed IT projects cause substantial waste in both the government and private sector (Krigsman,
2010). What can change this trend and save IT projects? Do IT Competent Managers lead IT projects
better that those who are not skillful in this area? Does identification of risk factors and trying to use
risk management improve success rate of IT projects? We will investigate these questions in this
paper.
2. Literature review
Science has a profound effect on the way we live, largely through technology. Technology is the use
of scientific knowledge for practical purposes (Burnie, 2003). Information technology (IT) is the
acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical
information by a microelectronics-based combination of computing and telecommunications (Longley,
1985). The term in its modern sense first appeared in an article published in the Harvard Business
Review (1958), in which authors Leavitt and Whisler commented that "the new technology does not
yet have a single established name. We shall call it information technology (IT)". Success/failure of IT
projects have been investigated thru some researches by McFarlan (1981), this issue was examined
by some authors (Alter, 1978 and Charette, 1989) but all show that little research has since been
done to advance our knowledge of IT projects risk. Unfortunately, it appears that software
development efforts still suffer from age-old difficulties of cost overruns, project delays, and unmet
user needs (Bark et al, 1993). This research has been accomplished to investigate the alignment
between IT projects risks and Managers' IT Competency, so we need to briefly define Risk, IT
Competency and fit concepts with emphasizing the IT meaning.
2.1 Risk
Since terminology of technology has a heavy tie with the discipline of engineering, it seems
appropriate to start with the definition of risk by the National Institute of Standards and Technology
(NIST) in its handbook , which describes risk as "the possibility of something adverse happening"
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