Multi-million pound corporate IT projects normally go wrong because companies become too pre-occupied with getting the technology installed and overlook the need to address how it will change the way their people work.
Research by IT specialist Changefirst based on a study of 56 organisations has found that even the best-intentioned IT projects fail because executives become over-excited by the technology and believe their new IT will be a "cure-all" for their problems.
As a result a low priority is given to user needs and organisations fail to learn from past mistakes, said Changefirst.
"Organisations must realise their IT investment is not just about hardware or software but also about people," said report authors David Miller, Richard McPike and Audra Proctor.
"Unfortunately there is an 'organisational mindset' that ensures that technical issues dominate any IT project," they added.
"Too often, employees are treated as an afterthought and this is not only jeopardising the benefits of the technology, it is also adversely affecting the credibility of IT projects to 'deliver the goods'," they concluded.
According to the report, the vast majority – 97 per cent – of senior IT executives admitted they were not always effective at managing IT change.
A total of 15 per cent claimed they seldom or never managed it well. And nearly half – 43 per cent – of organisations did not budget specifically for managing the people aspects of hardware or software installations.
"Every IT project should have a standalone budget to cover the investment in people during the change," stressed the report authors.
"Problems arise when all funds are in a general pot because if there is a technical-build overspend, the people allocation gets depleted," they added.
Nearly two thirds (65 per cent) of senior IT executives believed that change management was a specialist area of expertise.
Yet when implementing major IT projects, a fifth of organisations did not assign a specific employee to be responsible for the people side of change.
In nearly six out of 10 IT change projects, the person responsible for change management was the project manager.
"Making a project manager responsible for change management creates a conflict of interests because a project manager's goal – and incentivised objective – is to get the IT solution installed without disrupting the business," said the authors.
"Organisations don't provide enough training in change management techniques to these people," they concluded.
The report also showed that 24 per cent of organisations relied on change management advice from large consulting firms.
A further 18 per cent used them in some way on IT projects. "Conflicts of interests can arise here because the same consultancies often support the design and build of the IT solution," warned the authors.
"This makes it difficult for them to offer independent advice. Change management should be a core, internal leadership activity which should not be outsourced.
"By developing and keeping this expertise in-house, organisations create the capability for future change and reduce their spend on external consultants," they added.
Just as damning, only a third of organisations formally evaluated the effectiveness of change management at the end of an IT project.
And only 39 per cent addressed people issues after the IT change had taken place.
"Organisations are failing to learn from past experience. IT change projects suffer from a lack of change management skill building," warned the authors.
"Interestingly, measuring benefits realisation is also seen as a low priority so this may be a reason why the same mistakes are repeated time and again," they added.