Have you only built half your PMO?

Getting “IT” right in an organisation is becoming progressively more difficult. As it becomes easier and easier to procure solutions thanks to cloud services and user configurable apps, so the decision taking becomes harder. Unlike at home, where we are happy to spend some time playing with apps on our smartphone and then abandon them; in a commercial environment wasting time on IT solutions that deliver no benefit is a business risk. You are wasting money and your competitor who gets “IT” right is not.

PMI’s recent Pulse of the Profession states: “It bears repeating that low-performing organizations are wasting almost 10 times more money on projects and programs due to poor requirements management than their high-performing counterparts — about 10 percent of every dollar spent compared to 1 percent”.

In many organisations, the group challenged with selecting and commissioning new IT solutions is the PMO (Project or Program Management Office).

The trouble is, from the perspective of many business leaders, the PMOs are expert at landing the plane, but they sometimes land at the wrong airport.

This is a symptom of PMOs spending too much effort on project management and not enough on investment management.

Project management is all about delivering the “goal” within time and cost constraints. Investment management is all about deciding what that goal should be.

To make your PMO expert in investment management needs a business analysis mindset and not a project management mindset. Selecting initiatives from a portfolio, developing business cases and formulating programs are all techniques to identify and manage strategic requirements to a goal. Realising your goal through a project means managing those requirements down to the detailed level.

The best PMOs have a balance of business analysis and project management competencies. Their processes, tools and templates cover both the analysis and the management tasks.

So if you want your PMO to always land on the right runway, make sure that it gives sufficient thought to the business analysis need.

Start with a BA – not a PM

The statistics on ICT projects continue to make depressing reading. The Chaos report from The Standish Group has been reporting success and failure rates since 1994. In truth there has been little changed with project failures at 18% and challenged projects at 43% in the 2012 report.

Of course the last thing you need is yet another drivelling blog about the need for better governance, more stakeholder engagement or an improved competency model for IT practitioners. So here is another take on it.

In most organisations the path for an idea to get to implementation is through some formal or informal portfolio process. Ideas are assessed and prioritised and matched up against the available budget. For those lucky enough to be anointed, there is an allocation of resources (people and money) to those who are expected to deliver; and a project is born.

The first step for most organizations is to find a project manager. Someone has to manage the funds, ensure that timetables are met and provide those all-important status reports.

The project manager gets to work establishing governance, identifying risks, stakeholder communications and is soon at the point of creating a work breakdown structure. Once all that is done, it is just a case of allocating tasks, managing risks and keeping to schedule, cost and quality.

Unfortunately a large proportion of projects that run like this don’t deliver. The truth is that a project manager is not the right person for all these tasks. While a project manager is expert in managing to constraints such as time, cost and quality they are not expert in managing the investment.

To manage the investment you need a different skillset (and a different personality type). This is the skillset of a business analyst who can measure current state, envision a future state and elicit all the requirements for change to get from one to the other. It is the analysts who should be clarifying what the project is to achieve and they are in the best position to build a work breakdown structure that delivers on the investment objectives.

So how can this happen in practice, because projects can’t run without project management? The answer is in timing and resourcing.

  • Engage the business analysts at the idea stage to develop an investment rationale (usually a preliminary business case)
  • Load up your projects managers with work so they don’t stray into areas that they are not expert in. Good PMs can run many projects very successfully if they stick to the project management disciplines and allocate tasks rather than undertaking them
  • Provide business analysis skills early on any project. Analysts should be your major resource expenditure with a ratio of 1 PM to 4 BAs very achievable
  • Insist on (and pay for) analysis that connects the idea and strategy right through to execution

So how comfortable do you feel that your project success rate will beat the Chaos report?

Why do so many companies find it so easy to come up with great ideas but struggle to see these strategies through to execution?

Success doesn’t necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won’t win a game or abattle; the win comes from basic blocking and tackling.
Naveen Jain

I see many companies with a plethora of great ideas on how to improve its business however the company fails continually to deliver ideas through to operations. Projects often fail to take the strategic ideas and deliver a successful business benefits.

Strategies often lack good analysis, metrics and the details required to measure if the execution has been successful.

Time after time, I have reviewed business cases that lack good analysis required to manage outcomes through to operational delivery and successful benefits realisation. Over documented business cases of 70 pages containing duplicated information, which is obviously trying to justify the project. If the project is based on a strategy that does not stack up even after good analysis is applied, then choose another project rather than wasting company money on a poor idea.

A major factor in this failing from strategy to execution is good requirements traceability, all the way from the strategy to execution in everyday operations within business units. Implementing a requirements management plan and good traceability from the initial strategic planning right the way to delivering the new capability is the step in the right direction for success.

Use a service for benefits tracing & management and business case definition from a Business Analysts company to keep the strategy linked to execution.

Have you ever seen an organisation with great ideas but fail to execute into everyday operations?

Will new IT software benefit an organisation?

If you can not measure it, you can not improve it.
Sir William Thomson

In many business cases, people confuse outcomes with benefits so it is little wonder why new IT software often does not benefit organisations.

An outcome is the result of implementing a new piece of software and the business benefit is the derived benefit the business achieves.

Lets say we implement a new IVR into a call centre, the new system reduces call volume, saving the 100 call centre operators one hour per day in talking with customers.

Then the outcome is 100 hours saved per day and the business benefit is how the100 hours saved per day is utilise. We could realise the benefits by:

  • Opening up a new customer service offering and utilise the additional 100 hours per day (Benefit is the amount of income the additional 100 hours per day contributes to supporting the new customer service offering)
  • Reduce staffing by 100 hours per day (Benefit is the amount of expense saved by reducing staff)
  • Reassign some staff to make out bound sales calls (Benefit is the amount of income the additional 100 hours per day contributes to increasing sales from outbound calls)

It is important to quantify these benefits with measures so that the true results can be reported to determine the success.

There are 4 keys points to help new IT software benefit an organisation:

1. Clearly define outcomes vs benefits

2. The “as is” business process state must confirm the current baseline metrics

3. Benefits must be quantifiable so that cost/benefit can be managed

4. Responsibility for benefits realisation must be assigned to an individual business owner

Use business analysts to define the outcomes and the potential business benefits before investigating software options.

Have you ever seen an organisation buy new software, which has not been beneficial?

Watch those IT costs

Accountants say Information Technology is the closest thing in business to a free lunch – and they should know.

The data is really uncontroversial – information technology can deliver improvements in quality, cost and timeliness in almost every business. The payback period of a well-executed IT project would usually be less than 3 years, with many closer to 12 to 18 months. Of course poorly executed IT projects mean that more than 60% of projects fail to achieve the expected return on investment.

A frustration with cost, agility and flexibility has led many business managers to take other approaches to technology enabling their staff. It is very possible to procure, configure and implement a sophisticated IT solution based in the cloud with the IT department as a mere bystander.

The business users have real skin in the game to keep costs down and to deliver the expected benefits. This may give them a better chance of success, but must be weighed against a lower level of IT project experience.

The proliferation of true business led IT projects must be a good thing. IT departments should be reconstructing their role to enable the shift – unfortunately most seem to be doing everything they can to stop it from happening.

One area that does need attention in this new world is the cost of IT.

On the face of it, cloud solutions appear good value. A system with a monthly fee of $50 per person per month only has to save 1 hour of work per month to break even. If the selected system is fit for purpose and well implemented, the $50 pales into insignificance.

Unfortunately the $50s add up if no-one is managing the costs. It is estimated that one third of cloud license fees is paid for but not used. When you add in multiple systems and a lack of rigour in turning hours saved into monetary benefit you start to get to serious numbers that should have the attention of the executives.

The IT department can help here. They have traditionally focussed heavily on cost control and should have good systems to manage licenses and make the real costs transparent.

The business users also need to develop project management skills to deliver on budget; and analysis and change skills to ensure the benefits really do materialize.

The key as always is intention. Before starting the project decide exactly what you want to achieve, use this intention to drive the implementation and ensure you extract the business improvements that you intended.

If you are looking for ROI, good analysis must surely come out close to the top!

How do you get a COTS package to fit your business?

You Can’t Connect The Dots Looking Forward; You Can Only Connect Them Looking Backward.
Steve Jobs

These days it is widely accepted that buying Commercial Off The Shelf (COTS) applications is less risky and cheaper in the long run than developing your own.

The key to getting value from a COTs software packages is to look past the glossy brochure, sexy mobile screens and vendor promises. You have to focus on how the software delivers through business processes the products and services, which provides value to customers.

Most organisations like to keep secret their unique selling proposition.  You have to be careful about giving your COTs vendor access to “your gold” which they might share with your competitors. In some organisations, this means that COTs packages are only used for for supporting business processes.

Vendor capability is an important factor with a COTs package. If the investment is sizeable you should run a pilot to assess the maturity of the vendor.

At some point be prepared to change (reverse engineer) existing business processes rather than customise the software, as customisations are expensive and require continual support.

Only reverse engineer existing business processes if it provides value to products and services, which provide value to customers. If it does not provide value then you may have the wrong COTs package or you may need to develop bespoke software .

There are 3 tried and tested steps to making your COTS implementation successful:

  1. Business processes are key to start-up any COTS project
  2. Discover the “as is” business process state to confirm that the products & services in scope for the COTs software package are still important for the organisation
  3. Organisational change must be performed in conjunction with process reengineering

Good analysis is critical. Quality analysis is cheaper, quicker and less risky!

Use BAs, Business Analysts to drive the business processes discovery before engaging a vendor.

Have you ever seen an organisation buy COTs software, which makes the business more complicated & less efficient?

I have just seen a software package that will solve all our problems

Any darn fool can make something complex; it takes a genius to make something simple.

Pete Seeger sums up the problem with organisations buying software without proper analysis as business process become complex rather than efficient, effective, rewarding & repeatable.

We have seen several organisations buy software without analysis and then spend thousands, sometimes millions of dollars on customisations.

The true art of utilising technology within any organisation is to understand the business processes that provide value to customers.

Once you understand the business processes in scope you can improve speed, agility and cost;

  • Design the software to deliver customer value faster
  • Offer more variety simply to attract more customers
  • Buy cost effective software & tailor your processes, if it make sense

There is a silver bullet for those who don’t want to follow the project disaster path and it involves 3 tried and tested steps

  1. Start with products and services
  2. Benchmark the value
  3. Perform business process modelling

Good analysis is critical. Quality analysis is cheaper, quicker and less risky!

Management must take control of their process environment. If you don’t have the skills, bring in Business Analyst BA to improve your maturity.

Have you ever seen an organisation buy software and then try to make it fit without good analysis?

The G20 and You

Action springs not from thought, but from a readiness for responsibility.
-Dietrich Bonhoeffer

In every workplace staff will happily discuss the challenges that they face day to day, yet they rarely effect the necessary change. Everyone has a view on how things can be improved, ranging from the detail to the strategic. Yet organizations stagger along with unproductive work practices and inefficient value chains.

As a community, we should all be doing our best to improve the organization that we work in. We may not have the same impact as the free trade deal with China or altering interest rates. But everyone’s combined action does make a difference and improving business performance inevitably leads to growth.

If you pull costs out of your own business, the owners may get wealthier (which might not be very productive) but eventually it will lead to cheaper services for your customers. If you pull costs out and improve services at the same time, you have transformed a less productive resource into a more productive one.

Improving business performance is rarely painless. The big impact improvements usually involve large scale process redesign with implementation focused on achieving measurable business benefits. This will deliver much more for the organization than running a myriad of unconnected projects.

The challenge in running transformational programs is in finding people with the energy and capability to see things through. Things get tough and you need credible leaders, preferably with a solid history of integrity and delivery within the business.

A successful program manager needs to gather skills around him or her to maximise the chances of success. They need to take the right decisions through good analysis and drive implementation through good project management.

If you feel ready to step up to the plate and help deliver the 2.1%, make sure that you don’t let your ego get in the way of a good outcome. Find the experts in strategic analysis, change, project management, business analysis and procurement. Invest in getting the decisions right up front – you know it will be cheaper than trying to turn around a program going in the wrong direction.

The three easy steps to growth:

  1. Move from projects to programs
  2. Do strategic analysis to take good decisions
  3. Surround yourself with experts

Are you ready to spark global growth?

Gap in the market

Winston Churchill said “Success is stumbling from failure to failure with no loss of enthusiasm” and by that mark many of us can give ourselves a pat on the back. Unfortunately your chief executive may not see it that way.

So many organisations that I see have a pit of poorly performing systems. The users hold them in low esteem, the IT department has little enthusiasm to improve them and the finance areas are worried about their cost.

So why does the reality look so different from the constant hype of the technology revolution – delivering products and services cheaper, faster and with better quality?

There is a way to be successful with technology projects. Those individuals who have run great change programs would recognize it. Surprisingly there is not a strong presence of firms providing these services (cynics would say that the IT ecosystem makes its money from complexity and rework).

The route to success is to create a connection between the initial strategic idea and the lowest level of detail of the solution.

This powerful technique relies on analysis and traceability – starting with a strategic idea and ending with full benefit realization. It is ineffective to break the chain along the way, purporting to detail strategy in a voluminous document, defining business requirements in isolation to a change agenda or implementing projects without business cases.

The right way to do things relies on experts who can take you through the whole process:

  • Strategic analysis – analysing ideas to provide insight and develop strategic plans
  • Portfolio and Program analysis – picking the right initiatives and formulating them into a program to deliver benefits
  • Project start up analysis – developing the project rationale to steer delivery
  • Requirements and data analysis – creating specifications connected to the original idea
  • Business change – ensuring those benefits are delivered.

Finally you have to add in the sustaining components of continuous improvement and education. That doesn’t seem that hard does it?

So how confident are you that your organisation is creating the connections that deliver success maybe a business analysis service could help you?

Analyse for Success

There is no doubt that developments in technology is presenting huge opportunities for organisations. Who wouldn’t want a driverless car (except taxi drivers) or an intelligent machine that could do everything from improving medical diagnosis to translating languages?

But at the same time, the press is full of stories about IT disasters – from Queensland Health payroll to the Myki card.

Almost every senior executive wears the battle scars of an IT project that did not deliver to expectations. At the same time they cannot ignore technology and hope it goes away. So where do they turn?

There is one sure-fire way to reduce the risks from technology. And if you reduce the risks, you can seize the opportunities!

The approach is not new, not revolutionary and does not rely on an “app”. It is often hidden within the context of business unfriendly terms like enterprise architecture or program blueprinting. But to people who have learned from their battle scars and seen technology success, it can seem a bit obvious.

To get your technology right, you need to get your analysis right!

Implementing a successful technology solution means getting a whole bunch of decisions right. These choices start at the very top of the organization as new technology challenges many businesses operating model. Then there are investment decisions, decisions on approach (e.g. insource or outsource) right down to decisions on what options to present on a screen.

If you haven’t done the analysis, or if you haven’t done it well, every decision is a risk and some of them will fall out wrong!

Of course many executives have also been burnt by poor analysis – usually getting the impression that vast fortunes are being spent on spinning the wheels. Analysis has to be targeted, relevant and joined up to be of use.

The key to success for any executive dealing with technology is to have access to a trustworthy, high quality analysis capability.

Organisations need to reset their thinking, learn from past mistakes and focus on doing technology right. This means analysing the right things to the right level, using the insights to set strategy and then delivering. Excellent program, project and service management teams working with great analysts deliver amazing outcomes.

So executives need to reset their views on analysis. They need to arm themselves with an analysis capability and they need to insist on sufficient analysis at all levels of a technology project.

They could do worse than to restate W. Edwards Deming famous quote “In God we trust; all others bring data”

So how confident do you feel that your organisation is doing it’s analysis right?