The Impact of Technology Insertion on Organisations

HFIDTC/2/12.2.1/1
Version 3 / 21 November 2007
5 Risks to Successful <strong>Technology</strong> <strong>Insertion</strong>
<strong>The</strong> obvious reason for the high level <strong>of</strong> failure with technology insertion programmes is
that there are a considerable number <strong>of</strong> risks inherent to projects <strong>of</strong> this type. Some <strong>of</strong>
these risks may be well understood and actively managed, but evidence suggests that
others may not be discovered even once the project has ended and the technology
introduced into service. <strong>The</strong> following section summarises the literature on risks that
have been found to impact upon the success <strong>of</strong> technology insertion projects.
5.1 Background
<strong>The</strong> complexity <strong>of</strong> technology programmes is well understood in disciplines such as
S<strong>of</strong>tware Engineering (SE), IS and IT. <strong>The</strong> significance <strong>of</strong> risks for IS/IT project success
was recognised by McFarlan [29] as early as 1974. He highlighted three serious
deficiencies in practice that were responsible for IS/IT project failures:
1. Failure to assess individual project risk;
2. Failure to consider the aggregate risk <strong>of</strong> the portfolio <strong>of</strong> projects;
3. Lack <strong>of</strong> recognition that different projects require different managerial approaches.
<strong>The</strong> complexity <strong>of</strong> most computer programs and programming languages is one <strong>of</strong> the
unsolved problems in s<strong>of</strong>tware engineering. <strong>The</strong> current applications are complex to the
extent that when programmers leave, companies fail, if there is no one else who
understands what the previous programmer has done. Researchers have conducted a great
deal <strong>of</strong> research in an attempt to develop metrics, which adequately capture and reduce
the complexity <strong>of</strong> the s<strong>of</strong>tware.
<strong>The</strong> early risk assessment models concentrated on technical factors as the causes for
failure. Earl [30] proposed a rigid cost-benefit framework for assessing on economic,
technical and operational criteria the viability, risks and opportunities represented by the
IT investment. Corder [31] identified high risk factors <strong>of</strong> project size, project definition,
user commitment and stability, project time, and the number <strong>of</strong> systems interfaces. Cash,
McFarlan and McKenney [32] refined this and suggested that the three most important
dimensions that influence the risk <strong>of</strong> a development project were project size, experience
with the technology and project structure. In general, it was found that the smaller, more
experienced and more highly structured the project then the less risk is associated with it.
One <strong>of</strong> the first models to identify organisational factors was by Parker, Benson and
Trainor [33], which highlighted the need to consider how well equipped the organisation
is to implement the project in terms <strong>of</strong> personnel, skills and experience.
5.2 Technical Risks
One area that deals with the introduction <strong>of</strong> technologies is the discipline <strong>of</strong> Information
Systems (a branch <strong>of</strong> s<strong>of</strong>tware engineering). Available literature suggests that failure is a
ubiquitous feature <strong>of</strong> both the UK and international experience <strong>of</strong> IS engineering. In fact
failure is such a problem in IS programmes that it has become a major focus <strong>of</strong> attention
for both researchers and practitioners alike. Of course technology insertion risks are not
limited solely to IT and IS projects. <strong>The</strong>re is a plethora <strong>of</strong> evidence to suggest that TI
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