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By Eric Nelson

In 2008, a landmark study found that 68 percent of IT projects fail. A more recent study found that roughly 37 percent of current IT projects jeopardize $74 million per year, per company, on average. In short, large IT projects are risky, yet utilities face their largest ever IT adoption as a result of smart grid.

 

Sources of Failure

As utilities being to initiate IT efforts for support of Smart Grid, there is no substitute for experience. IT programs can be delivered in a scientific manner based on tested practices.

 

IT programs usually fail because of poor project and program management practices such as inadequate requirements gathering, ineffective communication between business and technical stakeholders, or a failure to deliver incremental value through each phase of a project. Poor communication and management leads to a lack of alignment between business units and IT, overly complex technology roadmaps and poor technology acceptance among end users. Utilities, in specific, can add conflicting directives from regulatory bodies and legislatures to their risk lists.

 

Keys to Success

Utilities can put themselves on a path to success by engaging strategic IT partners or consultants who have delivered complex IT programs and who are neutral in regard to technology selection. When IT projects gravitate towards specific software solutions, without first evaluating their requirements and performing neutral evaluations of available solutions, it is likely that risk, complexity and costly billed hours will increase throughout a project. An effective strategic partner must demonstrate it can leverage and deliver mature application models from both within and outside of the utility vertical. Effective program management will drive specific activities that lead to success, such as:

Requirements Definition: Strong requirements definition is a must, but requirements also must adapt. Business requirements are rarely the same at the end of a project as they were at the outset due to changes in the market, customers, regulations and corporate leadership.

Program Governance: Effective governance brings business and technical stakeholders together, keeps scope and goals in check, sticks to real business needs, communicates incremental value being delivered  and secures and maintains executive support.

Risk Management: Many programs fail to address risk at all, much less to assess, address and communicate risk continuously. A clear, adaptable risk plan helps eliminate the hurdles that hurt IT programs.

User Acceptance: IT is about empowering people. IT tools won’t work if users don’t adopt them. It is important to involve the user community from any program’s earliest stages and to perform acceptance testing that is measurable and encourages open communication.

 

Eric Nelson is managing principal for Synaptitude Consulting, which provides offers a full smart grid consulting services portfolio, including experience and expertise with customer service transformation.

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Current Comments (6)

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Smart Grid/Smart Water

Jesse, While your newsletter addresses the issues that utilities face implementing the "smart grid", there is an easily overlooked opportunity for electric producers to align themselves with municipal water distribution at the same time. While the majority are separate entities, there are many dual utilities seeking to accomplish the greatest results for both at the same time, thus considerably reducing costs. You could be very amazed by the hybridization of technologies that are currently competitors, that can find mutually beneficial partnerships. That system has as its core, transceivers that have long range transmission capability.

Daniel L Burger - 05/04/2011 - 06:22

One focused System

Infrax Systems seems to me a company that is focused directly on the latest technologies and security management to answer the needs of all aspects of the Smart Grid.

John Brophy - 05/04/2011 - 06:51

System Failures

One glaring omission in this article is that without a well developed and well executed change management plan a projects likelihood of success is about fifteen percent (Prosci Study, 2009). This is particularly relevant in smart grid related systems as they have significant impact on current business processes. Also - it would add credibility to the article if the sources of the "studies" mentioned in the first paragraphed were cited.

Mark Varenhorst - 05/04/2011 - 07:10

IT Project Failure

OK but these 4 principles, plus the "change management" noted by the previous commenter apply to all projects, technical or otherwise - and throughout time. Requirements definition: one cave man asks another, "Do we really need one more dead wooly mammoth? Program governance: also at least as old as a cave man clan. Risk Analysis: developed at least as long ago as early agriculture (crop planning). User Acceptance: Guttenberg's rogue uncle: do you think we should trust print that does not come from a trusted scribe? On the positive side: there are some still struggling with these principles and need a reminder. I myself am unclear about whether or not we need another dead mammoth.

Louis Irwin - 05/04/2011 - 13:32

Communicate, Communicate, Communicate

It is reassuring that the need to “communicate” appears in three of the four Keys to Success, is central to Mr. Varenhorst’s change management plan, and is made time-honored by Mr. Irwin’s examples. At the same time, as a writer and instructional designer, with years of smart grid experience and a contract coming to an end, I am not seeing much interest in hiring on expertise in this area.

John Morley - 05/04/2011 - 15:22

Where does this problem start? I have an idea..

I did say that these are useful reminders or start points for some after being derisive about how basic this stuff is. I may have gotten my start in this type of thinking in of all things an oral english class in high school. We had to give a persuasive speech that demonstrated need and a proposal that met those needs. The sad truth is unless HS curricula has changed a lot, this type of thinking is only offered in electives (like debate, oral english, a progressive govt or business class), when it should be core curriculum. So today you're off the hook while I bash the American educ. system. Good problem solving skills has as many applications as there are good problems>

Louis Irwin - 05/05/2011 - 15:43

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