Accelerating Business and IT Change: Transforming Project Delivery

Alan Fowler

• Publisher: Routledge
• Year: 2017
• Topic: Business
• eBook ISBN:
  9781351163422
• Subtopic: Business General
• Index: Business

Despite two decades of investment in project management as many as 80 per cent of business change and IT projects continue to rack up cost overruns and fail to deliver their expected benefits. Business people who must have more certainty in their project investments will find this book refreshing. It contains commonsense but groundbreaking techniques that deal with just this challenge. The authors, far from rejecting current methods, take an imaginative approach to encapsulating established best practices such as PRINCE2™ within a framework of new thinking, innovative techniques and hard-nosed portfolio management. This book shows how project sponsors can radically improve the certainty of getting the benefits that they want and accelerate their projects to get them sooner rather than later (or never). Finance and portfolio managers will find techniques that provide them with the means for drilling down and tracking not only the costs, but also the cash values of project benefits, both tangible and intangible. Business people and project managers will find ideas here that enable them to create and control change in communities of stakeholders; which is the ultimate aim of the organizations that are investing time, resources and money in projects of this kind. Accelerating Business and IT Change is essential reading for anyone seeking to define the nature and value of what they expect from their projects, set realistic implementation schedules and then ensure that all the intended benefits are realized. Important: The CD version of this product requires a Java Run Time environment. If you are planning to use the CD in your office please check with your IT Department to make sure you will be able to use it.

Chapter 1
Recognizing Project Success

Most people would agree that the principal purpose of project management is to achieve a successful outcome for the project. This introductory chapter starts by considering factors for determining project success and explains why every project manager should have a clear vision of the project in its finished, successful state.

Introduction

This book can best be introduced by telling some stories. All good nursery stories begin ‘Once upon a time’ and most point a moral. Our stories are no exception but, unlike most nursery tales, they are matters of fact:

• Once upon a time we built cars the ‘fat’ way. Nowadays we use lean engineering, working backwards from the customer’s needs. We get rid of all the procedures that don’t add value.
• Once upon a time we built ships one at a time, one after the other. Nowadays we build ships two or three at a time, in parallel and in tandem, collaborating simultaneous component development from around the world.
• Once upon a time we built houses from the bottom up, brick by brick. Nowadays we assemble preconstructed modules into the building structures; ‘delivering higher quality homes in one-third of the time and at lower cost’ (quoted from promotional literature).
• Once upon a time we carried out IT and business change projects step by painful step, moving slowly forwards from the project start. Nowadays sadly, we still do.

This story has as yet no happy ending: nothing much has changed. Of course methods have improved, but no fundamentally new approach has been developed to match modern progress in the building of cars, ships and houses. We have made no equivalent dramatic breakthrough in project management.

Project Management: for Failure or Success?

If the purpose of project management is to achieve successful outcomes for projects, we should expect all the effort to be focused on those outcomes. But it seldom is. Most of us will usually discuss in detail the processes and activities that are happening in and around our projects. Ask us to discuss the risks and problems and we will mention the external suppliers, job deadlines, overruns and shortfalls against the work schedules and plans for today, tomorrow and next month. Ask us about the overall outcomes of our projects and we will give the briefest of statements, often implying that project success is in some way dependent on other people and organizations.

The skills and tasks of a project manager are about the processes and jobs of running a project. The picture presented by many projects is of an army of ants, swarming over myriad tasks, happy to be mentally challenged and busily employed, with all thoughts of an end postponed. The end of the project is seen as a close of the participants’ present employment. Attention is focused on the next task or deliverable item. ‘Sufficient unto the day are the problems thereof’ (Matthew 6:34). It all seems a million miles from emulating the breakthroughs to higher efficiency achieved in car manufacture by Toyota in the 1970s, Korean shipbuilding in the 1980s and by the worldwide construction industry in the 1990s.

This focus on day-to-day, week-to-week and month-to-month working instead of the final outcome, sets up enormous tensions between the project team, the project sponsor and those investing in the project. Those who pay the piper expect to call the tune, but project progress reports too often highlight the viewpoints of the project manager and team – not the issues and progress related to the outcome of the project. Progress reports classically describe the technical problems, the immediate needs for resources and decisions of the project team and workers. The report language is often so technical as to be meaningless to the sponsor and investors.

Once an outcome is lost to the sight of those working in the project there is a high probability that their efforts will diverge from the minimum necessary path. They will find themselves discovering details and problems that had not been foreseen. In losing sight of the final outcome, no one will notice which details and problems are irrelevant. Work will expand to fill (and overflow) the time and resources available.

In projects where there is a way to describe the outcome in clear and tangible terms, it is possible to communicate that outcome in terms that the entire team can understand. The team can then visualize the objective, focus their collective effort and avoid wasteful diversions. This is relatively easy to achieve in engineering and construction projects. In the military context also, every member of the battle team is utterly clear about the objective. The ‘project management’ of a battle provides excellent lessons about making the objectives tangible and communicating them consistently to every person involved.

This book is about the enabling methods that lead to a revolution towards the outcome-based management of IT and business change projects. Just like the car manufacturers we will use lean engineering. We shall emulate the shipbuilders by collaborating simultaneous component development. Like the modern construction companies, we will assemble preconstructed modules into our project structures.

How can all this be achieved simply? Our answers are based on the discoveries, experience and successes of Isochron. That company’s thinking has revolutionized the efficiency of projects, with the result that they can be accelerated towards meeting the goals of their sponsoring organizations.

Objectives and Factors for Success in Different Kinds of Project

The way by which project success is measured – indeed, the ideal way by which a project is managed – depends to some extent on the nature of the project. Lock (2003) has identified four main project categories. This classification, although somewhat simplistic, is useful in the context of considering project management procedures and objectives and is illustrated in Figure 1.1.

Figure 1.1 Four project categories

We should start by dismissing the last category of projects identified in Figure 1.1 (Category 4) as being irrelevant to our discussion. Category 4 includes only projects carried out for pure scientific research, where attempts are made to advance the frontiers of knowledge. When the research is purely experimental, it may not be possible to set any objectives at all, and the benefits can range from nil to unexpected heights. Traditional project management methods cannot be applied because there is usually no time plan and the work does not lend itself easily to scheduling. It is possible to limit risks and exercise some management control by stage-gating, which means having periodic reviews, each of which is linked to the release of fresh funds or a decision to end the research. But Category 4 projects are outside the scope of this book and will not be mentioned again.

Projects in Categories 1 and 2 have been the main focus of specialist project management practice, publications and training for well over half a century. Their management methods have many similarities. The principal differences are that projects in Category 1 (civil engineering, construction and so forth) are usually conducted in the open air, away from the main contractor’s home office and are to a large extent visible to the public, whereas manufacturing projects (Category 2) take place in walled or fenced environments on the main contractor’s premises and out of the public gaze. All these projects have tangible outcomes. When they are finished, there is obvious physical evidence of construction or a manufactured product. The principal indicators of success or failure can be expressed in terms of technical and commercial performance, all easily quantifiable in numerical units of measurement (including monetary units). Another feature of these projects is that most of them are carried out by one organization for another, usually within the strictures of a commercial contract. When the project has been finished and handed over, the main contractor or manufacturer moves on to something new, leaving the project owner to operate and maintain the physical outcome of the project. Of course, many projects have lasting commercial and environmental results but, so far as the project manager and contractor are concerned, the principal benefits should all be realized when the project work is finished and the user makes the final payment and takes over responsibility for operation and maintenance (shown in Figure 1.2).

Category 3 includes business, IT and change management change projects, which are carried out internally. Although external suppliers, contractors and consultants might be needed, it is the internal project owner who is ultimately responsible for managing the project and implementing its changes. All funding for these projects comes from within the company. There is often no tangible outcome, only a change in the business processes, technology, roles, procedures, behaviours, attitudes and beliefs. The intention is to improve the business in some way that creates value. Initially, project costs will considerably exceed the value of the intended benefits. Most of these benefits will not be realized until near or after the end of the project. They may comprise one, two or all of the following:

• an immediate cut in costs (such as when staff leave the payroll)
• an immediate cash receipt (for example, when payment is received for a new product or for the sale of assets rendered redundant by the project)
• continued improvement in cash inflows resulting from the project (either as cost savings or increased revenue)
• an increase in the assets and intangible value of the company.

Figure 1.2 Possible cost–benefit patterns for the project categories identified in Figure 1.1

The Isochron approach described throughout this book identifies each occasion on which one of these cash benefits is expected as a ‘value flashpoint’. This concept will be explained at greater length in due course (particularly in Chapter 3) but it is introduced and illustrated in Figure 1.2. In brief, value flashpoints are predictable and easily recognizable events that are directly associated with cash savings or benefits that should result from the project.

Imposed Numerical Targets: no Guarantee of Success

The imposition of numerical targets is a popular and traditional method for attempting to improve performance, in people, in projects and in business activities generally. Further, if precise targets can be set at the beginning, why should these not eventually provide the benchmark for deciding whether or not the project has ended with a successful outcome? Target-setting is seen at all levels in a business, from the lowest departments up to senior management and beyond, and indeed gave rise some years ago to the ‘management by objectives’ process. Used sensibly, and with discretion, target-setting has considerable merit. But setting numerical objectives alone is no guarantee of success and can run the risk of producing negative results.

Consider the following scenario. Salespeople are given new goals to meet, production managers are asked to improve productivity by x or y per cent, or a materials manager could be told to cut the inventory turn rate. All these objectives are defined precisely in terms of numbers or percentages. This performance-measuring method has been greatly favoured by the UK government, which sets targets to reduce waiting times for National Health Service patients, for class sizes in schools, for crime figures in the police forces and so on.

At first sight, setting numerical targets seems laudable; it seems to offer a sure-fire path to success by motivating people to improve their work performance and meet specific, qualified performance targets. But what usually happens in practice? Experience proves that those who have targets imposed upon them are often motivated in ways different from those envisaged by their superiors. Danger comes from regarding the targets themselves as the sole motivators, regardless of their effects on the people subjected to them. Organizations and people are placed under unreasoned pressure to ‘get the numbers right’. So, for example, salespeople can become tempted to fudge the figures in their reports or, worse, sell at unprofitable prices to achieve their targets. In one extreme manufacturing example, an operative was set a quota of products to deliver each day from the end of his production line. He exceeded his daily quota simply by removing products from the end of the production line and feeding them back on to the conveyor belt upstream!

In 2005 the UK government set general practitioners a target of seeing every patient within two days of making an appointment. According to complaints from the public to the media, some doctors simply stopped making appointments for more than two days ahead, thus achieving their target at a stroke. The result of this insistence on a numerical target was that many patients found great difficulty in making appointments because, once the current two days of their doctor’s diary had been filled, callers were asked to try again the following day and, if necessary, the day after that and so on until an appointment slot became available. Frustrated patients were forced to make repeated calls to overloaded switchboards before they could finally get their appointment.

Members of a team of immigration administrators were given permission to leave work early each day, provided they had finished a set quota of received application cards. One administrator achieved high numbers, enabling her to leave her desk and go home early on most days. Years later, the building was demolished. A small hole in the wall of the ladies’ cloakroom gave access to the lift shaft, at the foot of which the demolition workers found thousands of incomplete cards.

It is evident from these and many other examples that the imposition of numerical targets on people and organizations is no guarantee of achieving true success or business improvement. We need, therefore, to take a fresh look at intended project benefits and the paths by which they can be achieved and recognized.

From Idea to Benefit Hindsight

Isochron methodology views the aims and benefits of new projects from a different perspective from that taken by the conventional numerical target-setters. It does not immediately ask the question ‘What targets should we set for this project?’ but instead takes a more farsighted view, an imaginative look into the future. It realizes that the attainment of numerical objectives depends on changes to behaviour, beliefs, roles, procedures and processes. It seeks to visualize differences in the ways in which the business and its staff will be operating when the desired level of improved bus...

Table of contents

• Cover
• Half Title
• Dedication
• Title
• Copyright
• Contents
• List of Figures
• Preface
• Acknowledgments
• About the Authors
• 1 Recognizing Project Success
• 2 Benefits, Business Opportunities and Threats
• 3 Making the Business Case
• 4 Planning
• 5 Project Authorization
• 6 Risk
• 7 Organizing the Project
• 8 Accelerating the Project: Controlling Progress and Costs
• 9 Managing Changes to the Project
• 10 Executing the Business Change
• 11 Enabling the Business to Change
• Glossary
• Index