Most everyone who’s been in the IT business long enough has witnessed a black swan. A black swan is one of those rare but large-scale problems that can surface during a strategic IT project and lead to massive cost overruns, blown schedules, and job insecurity for those in charge.
According to recent study by Oxford University and McKinsey, these black swans are more prevalent than most of us thought. The study analyzed 1,471 large-scale global IT projects costing more than $170 million. Here is what they found:
- One in six big IT projects goes over budget by an average of 200%
- Spending on technology is 3x more likely to spiral out of control than construction or other major projects
- Traditional risk-modeling may not suffice – large-scale computer spending is 20x more likely to spiral out of control than expected
The researchers attribute this poor risk analysis to what they call “black swan blindness” – the tendency of IT decision-makers to overlook low probability but high-impact risks to their projects.
“Black swans are negative events that hit you rarely, but when they hit you, they do it with a large impact,” said Professor Bent Flyvbjerg of Oxford University. “IT managers tend not to see these black swans, because they assume that they’re rare, and will probably happen to somebody else. They are wrong. They happen much more often than people think.”
Yikes! Rein in those costs!
Let’s say you’re conducting a major technology refresh, such as attempting to replace thousands of older servers that are energy-guzzlers or at lease expiration. One way to eliminate the threat of a black swan is to contain the scope of the IT project to begin with – and to make sure when you do begin, you have access to all of the key information required to manage the transition safely. Do you have ready access to all of the data about all of the physical assets currently under management? Or are there still hundreds of servers out there that you can’t see, aren’t 100% sure what they’re connected to, and aren’t 100% sure which business applications they’re supporting?
Can you imagine the catastrophic implications of attempting to plan a large-scale data center technology refresh without a holistic view and understanding of everything going on inside your four walls?
You need comprehensive, meaningful, and actionable information about the physical infrastructure on the floor – the myriad of IT and facilities assets at the heart of the IT ecosystem – before you can assess the risk of going in and moving, adding to, or changing that environment.
Without it, a black swan may lurk.
