Managing Organizational Risk to Avoid Dispute For DX

Abstract

Although not only information technology (IT) systems but also collaborative work with IT vendors and IT users are indispensable for digital transformation (DX), disputes between IT vendors and IT users (IT disputes) have often been observed, after the abortions of IT projects and successive claims to compensate for individual losses. The vendors and users waste tremendous resources as well as opportunities, however, the root causes of IT disputes and measures to prevent similar incidents are not clarified. Lessons learned from such disputes have not been identified specifically enough to prevent the same troubles in the future. The goal of this paper is to identify the lessons learned. Applying a new analytical technique for troubled IT project cases, we identify individual root causes and business risks, whose threats have been overlooked by organizations, and derive the lessons learned. We also show specific management practices for avoiding the same disputes based on the lessons learned. Moreover, after showing that current institutes of project management have not considered the risk and have not involved the lessons learned in the management standards, we propose a revised organizational project management standard with specific practices for less loss of our social and economic activities in the future DX era.