Right now, many businesses are reducing investment. Why? Well, in response to rising prices and interest rates, it is a natural choice. Investing in new technology, equipment and innovation may not bring benefits today so perhaps they can wait. Despite some reduction in investment, many IT transformations remain in progress or have recently been implemented. A few are no doubt set to start where systems are out of support, automation and efficiency can be achieved or other benefits. However, in our experience, we have witnessed several IT projects run over time and over budget while we watched from afar. In general, the planning fallacy is alive and well i.e. we think we will achieve all we set out to do. So, today we talk IT transformation tips and managing successful projects.
IT transformation tips
As a rule of thumb, people generally follow the sunk cost fallacy. This means that we throw good money after bad and hope for the best. In an IT transformation, that means throwing more money into a black hole. Some recent examples of large-scale issues include Birmingham City Council’s IT transformation that helped to bankrupt the council. There is also the interesting failure of the air-traffic control system where a ‘rogue piece of data’ caused nationwide disruption. Outside of IT, we know what happened to the remaining northern leg of HS2.
Here are our 3 key IT transformation tips:
- Be clear about your objectives from the outset and who is accountable for them.
- Capture all requirements before collectively deciding which must be sacrificed.
- Communicate every step of the way to the right stakeholders in the right way.
The first should not come as a shock. However, things change and competing projects come along all the time. Are your initial objectives still correct? Will it bring more benefits than another innovation? Is the accountable person taking ownership?
In terms of requirements, many try to ‘restrict’ requirements capturing to a limited window of opportunity. The aim is usually to keep any development ‘as close to out of the box’ as possible, reducing the need for customisation, or to stay within time and budget. Unfortunately, we have seen a few implementations fail to gain traction with staff or that key tasks cannot be completed with the ‘vanilla’ system.
Communication is something that most project managers extol the virtues of at the outset. Despite this, many organisations fail to get the ‘buy-in’ they wanted, the gains they hoped for or the timescale and budget they signed off. Whether it is down to politics, poor employee experience, leadership style or insufficient communication, it needs constant review.
Managing successful projects
At this point, it is tempting to reach for the textbooks and read up on PRINCE2, ITIL, Agile, critical path analysis, Gantt charts and flowcharts. There is a plethora of material out there to help you manage a successful project. However, we know that nearly 90% of large infrastructure projects are delayed or go over budget. The planning fallacy and an inside view are largely to blame. We also know that around 78% of transformation programmes end in failure. Similarly, many executives underestimate the complexity and the dedicated project resources required. Ultimately, people have existing roles, objectives and sometimes, a lack of the required skills. Furthermore, a substantial 70-80% of digital transformations are estimated to fall short. In summary, the chances of failure are high, so how do we succeed?
Here are 3 tips for managing successful projects:
- Look outside of your organisation, industry and inner circle for a reality check.
- Ensure that the people involved possess the required skills and passion.
- Dedicate the necessary resources for the entire term of the project.
We have previously mentioned how declining attitudes to work mean that less people are willing to volunteer to ‘go the extra mile’. This is also demonstrated in the rise in absences at work and some staff keeping their heads down to do the bare minimum. This makes resourcing projects a challenge if people ‘disappear’, disengage or leave before the end.
Businesses unsupported on IT transformation projects
In a climate of rising costs, rising interest rates and reducing investment, it is tempting to cull projects. However, we also know that about 1 in 5 CEOs invest during a downturn to come out stronger at the other side. In the long-term, such intrepid pioneers see higher growth in the succeeding years. Cutting back on the support around an IT transformation or other change project can lead to failure. We have personally witnessed the reaction from management teams as programme directors and project managers get redeployed. The typical response is, “How are we going to complete this when everyone is maxed out?”.
Where Government support came in full for training programmes, including digital marketing skills and business growth, it was lacking for IT change. Where a CRM system could be part-funded by HMG, the training and people resources were not. Ultimately, many smaller businesses lack the ‘spare’ resource, skills or governance to deliver effective IT transformation. To conclude, it may be worth circling back to the fate of Birmingham City Council, whose IT system replacement costs have ballooned from £19m to circa £100m. Drastic measures for financial recovery may include selling assets, redundancies, cuts to services and tax rises.
Supporting IT transformation and successful projects
Tenacity, patience, governance, communication. These are our key tenets at Think Beyond when it comes to projects. We will be there all the way until the end, working with your teams and your managers to get the job done.
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