Business value is only realized after project closure, when the system is actually used

Project Output vs. Project Outcome

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A Nobel prize for IT Paradigmology

Rearranging the Deckchairs on the Titanic

From time to time I give a talk called ‘Rearranging the deckchairs on the Titanic’ for project managers. For instance, for the PMI communities in Singapore and Poland. The title is a reference to how some project managers are so focused on delivering the project output, that they neglect to ensure that the project outcome is realized. It’s a shame to see a good ship sink due to an unforeseen iceberg. In the case of software development projects, these more technology-oriented project managers’ focus is on building the system according to specifications, and getting the client to sign off. Yet business value is only realized after project closure, when the system is actually used.

Value realization after the project

Value realization depends on the short term on how effectively the user organization uses the system, and on the longer term on how well they identify opportunities to make improvements and how well they collaborate with the IT function to get these improvements realized. In other words, there has to be a capable user organization in place, otherwise the project will be regarded as a failure and the project manager’s reputation will suffer.

Five years’ hard labour

Is it fair to blame the project manager for something that happens after the project? Yes and no. On the one hand you could say that if he or she has delivered to spec, then that’s a job well done. But on the other hand, is that particular project manager going to be hired again or recommended? Probably not. If you ask me, it’s the project manager’s responsibility to ascertain whether the end product will be fit for purpose and for use, and to guide the client accordingly. Either the project manager can include the organizational component in the scope, or take the easy way out by excluding it. But the exclusion option is only on the cards if the project manager is convinced that the client is committed to, and capable of, creating an effective user organization. If it was a court case (and why not?) I can hear the judge saying “With your experience, you should have seen this coming”, before sentencing the project manager to five years’ hard labour.

IT costs and business productivity

Some figures reinforce the important of organizing the after-project phase:

  • Only 10-30% of the total cost of ownership of an information system is spent on the initial development, the rest is spent on operations, support, maintenance and renovation, and finally, decommissioning
  • On average, 15% of total enterprise costs are IT costs (this varies between 2-30%, depending on the market segment)
  • 6-10% business productivity is lost due to IT issues – this is equivalent to half the IT budget
  • 55% of this wasted business productivity is due to problems with the systems themselves, while 45% is lost due to poorly trained or ill-disciplined users

Major business concerns

So what does an effective user organization look like? It comprises roles and responsibilities that address the following major concerns:

  • How much to invest in information and related technology versus other business assets and resources?
  • Which investments to make with this budget?
  • How to delegate the work effectively to the IT function?
  • How to ensure effective use of information systems?
  • How to protect information systems from abuse?
  • How to demonstrate that these information systems are managed in accordance with their value as business assets?

Key business roles and responsibilities

As you can imagine, addressing these concerns involves a spectrum of activities that vary from day-to-day operational user support by super users, to determining the strategic value of – for instance – big data and making appropriate long term investments. Two of the key roles in the business are the system owner and the data owner. Once these responsibilities for decision making have been allocated (and accepted), most of the other roles will be no-brainers. What other roles are we talking about? Super users, some of which may take on the role of ‘functional sysadmin’, in other words somebody who knows what the systems do and – crucially – how they are used in the business context. You also need some analytical roles such as business analyst and business information manager to work out what kind of information and information systems are needed. Somebody has to fulfil the role of contract manager who negotiates service levels etc. with the IT function, and manages the agreements and relationships with them. There are more roles but these are the major ones. These are not necessarily full time roles. Super users are by definition users with a primary role in the regular business processes, who also help less experienced users. Systems ownership is often claimed by business process owners, as part of their responsibility for effective business processes.  This and more guidance for the business is to be found in the Business Information Services Library (BiSL®), available at the non-profit ASL BiSL Foundation.

Business value-oriented project managers

The talk is intended to

  • Expand the horizon of technology-oriented project managers so that they understand that only when the business also plays an active role after project closure, will the return on investment be realized
  • Give the attendees a framework that they can use as a checklist to establish whether the business is fulfilling their roles and responsibilities
  • Point out valuable resources, training and certification to give them confidence that they can be successful as business value-oriented project managers who help create an effective user organization

This is all part of my mission as the ASL BiSL Foundation’s ambassador to build bridges between various IT-related communities, such as IT service management, application development / management, business information management, business analysis, business relationship management, enterprise architecture, governance of IT, and project management. Fortunately, most communities are interested in broadening their horizons and investing in multidisciplinary collaboration, so I continue to feel that this is a worthwhile investment on our part.

 

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Mark Smalley, also known as The IT Paradigmologist, thinks, writes and speaks extensively about IT 'paradigms' – in other words our changing perspectives on IT. His current interests are the digital enterprise, IT operating models, value of IT, business-IT relationships, co-creation of value, multidisciplinary collaboration, working with complexity, and as the overarching theme, management of information systems in general. Mark is an IT Management Consultant at Smalley.IT and Ambassador at the ASL BiSL Foundation. Mark has spoken at 100+ events in 20+ countries.