As I have described many times in this blog, investing in IT solutions is notoriously risky. Just 1 in 5 projects succeeds and failures can bring down companies and governments. How then do enterprises manage this risk?
The answer is challenging to the project sponsors, who just want IT to get on with the job. With other areas of the business they assign accountability and expect the business unit heads to deliver on outcomes. With IT this approach is ineffective given the number of stakeholders and the limited ability to control events.
One example that springs to mind was when I introduced a recruitment and on-boarding system. The project was well run with a solid business case and good governance. Unfortunately the HR staff were too busy to contribute as a result of a high recruitment load from a major mining project. Rather than delivering a poor product, I slowed the project to allow them to engage. The final system was very successful, but the project ran over budget and over time.
To deliver on time, budget, scope and value, you need a strategic approach. The best way to do this is with a strategic wrapper, run by someone who can bridge the business / IT divide. They should by preference be independent from project delivery.
The wrapper has 4 components as per the diagram above:
1. Framing question. This is probably the most important step and is designed to test the business engagement. In an accelerated workshop format, the key senior stakeholders agree to the high level problem statement and commit to change. A great outcome is an email from the CEO to all staff “We are making this change for this reason and expect it to deliver this”.
2. Business case. A well written business case will surface any inconsistencies between the project and the organization’s strategy. It then sets out the options, scope, benefits, costs, risks and timeframe. Once this is agreed by all stakeholders, you can use the document as a bible for all future steps.
3. Project governance. The people delivering the project will put in a governance process. This needs to be made accessible to senior stakeholders and you need a highly experienced individual to ensure that you make the right calls on the difficult decisions.
4. Value delivery. This step is so often missed out on IT projects. Organizations commit to the investment, they should also commit to the return. An independent analysis of returns against the business is guaranteed to focus the efforts of business unit leaders.
The strategic approach will cost money – typically 10% of the cost of a project. The approach is likely to deliver many times this benefit from a focused project that does not spend money on unnecessary features; cost reductions and quality improvements from best practice processes; and more business value delivered at the end of the project.
Does your business approach IT investment this way?