By Rob Prinzo of The Prinzo Group
It is time to face reality. The spending cuts caused by the recession have lead to gaps between your enterprise software applications and the most current releases. The longer you wait to upgrade, the larger the gap, the larger the gap, the bigger the project. Although most organizations have accepted and plan for application upgrades, over 60% of technology projects result in missed implementation dates, cost over-runs or fewer features and functions than originally planned.
With such high failure rates, even the thought of a large scale enterprise application upgrade is enough to give any executive heartburn.
To prevent against project failure, it is important to understand that project failure can happen early in the project lifecycle, causing a ripple effect on your project. Consider these key findings from the report, The Impact of Business Requirements on the Success of Technology Projects from IAG Consulting, a professional services firm focusing on requirements definition and management:
- Companies with poor business analysis capability will have three times as many project failures as successes.
- 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis.
- Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects; and
- Over 41% of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.
When planning your project, you have calculated your project budget, resource and staffing needs, and your projected ROI. However, if there is a gap in your requirements that causes delay during the acquisition phase of your project (or worse yet, you leave out key requirements from the strategy phase because of a rushed assessment) the resulting impact will be seen downstream causing the extension of subsequent project phases.
The ripple effect of missing project gaps early in the project will not only create vulnerability and weakness in the project plan integrity, it affects the timeline, the overall project cost, realized benefits, ROI calculations and the project team’s credibility.
For example, project delays can be measured as follows:
Internal and external resources cost – A three month project delay resulting in the extension of two internal resources at $120,000 a year, plus the extension of three consultants at $175 per hour, results in over $300,000 in extra project costs.
Delayed operational improvements and realization of operational improvements – A three month project delay with additional resource cost will lower the project return on investment (ROI) by delaying the realization of the system benefits in the form of cost saving and streamlined business processes.
Loss of confidence in the project team itself – Missed project deadlines result in lower project team morale and organizational skepticism about the viability of the current and future projects.
The need for project assurance
One way to avoid the system implementation mistakes of the past is to adopt a modern view of project assurance methodology. Project assurance is about making sure that projects are delivered on time, on-budget, with client acceptance. Having project assurance as part of a large-scale business system implementation helps you:
- control/reduce project costs
- ensure milestones are met
- minimize surprises
- provide objective analysis
- provide peace of mind and trust among executives and project team members
Project assurance methodologies, such as collaborative intervention, are based on the following principles or best practices:
1. Identify the real issues – At the leadership level, you need to develop an executive dialog that allows business and organizational issues to be identified and analyzed with clarity and without emotion. Continue this dialog throughout the implementation process. Remove organizational barriers both within the organization and with third party vendors. All parties should be aligned with the common goal of project success.
2. Set realistic time frames – Don’t rely on the existing schedule. Many organizations will set overly optimistic go-live dates in spite of the realities and limitations of the actual project. For example, the design phase extends but the timeline doesn’t. You must monitor project progress throughout the implementation and start discussions regarding key project dates early in the project’s lifecycle to avoid downstream impacts.
3. Align the work streams – You need to identify, align and continuously monitor work streams to ensure smooth progress throughout the organization. Understand dependencies between work streams during project plan development to ensure proper resource allocations and project time frames. Continue to monitor the interdependencies throughout the project.
4. Look beyond the indicators – Contrary to popular opinion, green may actually be red. Realistic monitoring and analysis of progress of the implementation can show that even though all project management indicators are green, warning signs indicate endangered components. If indicators are only addressing past phases, but not addressing readiness for upcoming project tasks and activities, they are definitely trailing indicators and not trustworthy predictions of the future.
5. Manage the expectations – Critical to maintaining control of the project, you need to manage the confluence of overly optimistic go-live dates against outside influences and interdependencies, such as available resources. Set realistic expectations upfront and keep expectations current in the mind of project team members so that they don’t lose sight of the forest while maneuvering around a tree.
At the end of the day, having a project assurance methodology gives you the power to go beyond traditional project management barriers and gives you the answers you need to assure project success. It helps you to identify and resolve the strategic, tactical and intangible issues and manage the human factors before issues become insurmountable. And best of all, project assurance gives you (and everyone else involved) peace of mind that the project is on the right track.
Rob Prinzo is founder and CEO of The Prinzo Group, an innovative knowledge consulting firm, and the author of No Wishing Required: The Business Case for Project Assurance.