The State of Project Management
As recent as 2015, a survey from portfolio management provider Innotas showed 55% of IT projects had failed within the last 12 months. By 2017, just two later, the numbers had improved with only 6% of project being deemed failures. Projects are being delivered on-time and on-budget, however, as many as 24% were considered “Underperformers”; projects that don’t deliver the necessary business benefits. Frankly, projects that don’t deliver business benefit might as well not be implemented in the first place. The money spent on the project could have been utilized better elsewhere.
So, why is this “Underperformance” occurring?
One of the key items is a lack of executive sponsorship. Too often a large multi-year project is started with great fanfare and with laser focus from the executive sponsor. Unfortunately, a crisis occurs (could anyone have predicted Covid-19 in 2020?), or some other major event occurs, and the executive sponsor loses his/her focus on the large project.
But there are ways to minimize, if not eliminating this from occurring.
When a business is in alignment, that means that all levels and players are clear about the organization’s purpose and make decisions in accordance with it. The company’s resources, strategies, management systems and communications illuminate the purpose so brightly that it is unmistakable.
One would think any IT project would align with the Business, but this is not the case. My belief is this occurs because it takes a lot of hard work to really understand how IT features and potential capabilities can enable a business to reach its strategic goals and this hard work doesn’t happen. While the executive may be quite knowledgeable on the technology, it is the vendor and the front-line workers who best understand the current process and the capabilities of the new software.
However, the front-line worker may not have a good understanding of how the capabilities of the software can help in achieving the key goals of the company.
The key for a successful IT project, one that greatly benefits the business, is to take the business drivers, the Critical Success Factors, of a business and figure out how these drivers can be broken into metrics (Key Performance Indicators) that will drive the business forward. Metrics that can be provide clear actions that need to be taken.
Next is to map technology to the CSFs, to see how the technology will improve the KPIs associated with the CSFs.
First, we’ll look at Critical Success Factors.
Each industry has its own Critical Success Factors, we’ll examine two below.
Let’s take the example of an airline. One of the key factors for profitability of an airline is turnaround time at the gate. Why is this important? The faster a plane turnaround happens at a gate, the more planes that can use that gate. The more planes that use that gate means more flights are taking place. More flights mean more profit. In addition, faster turnaround increases customer satisfaction from on-time departure/on-time landing.
In the case of a fast-food restaurant, drive-through duration is a Critical Success Factor. Customers do not want to sit in a drive-through for 20 minutes. It doesn’t matter if there are 3 cars or 30 cars in the drive-through, no customer wants to wait any more than a few minutes. Experiencing a long wait time, means the customer will go to a different fast-food restaurant next time. The shorter the drive-through duration, the more customers that can be serviced and the more profitable the restaurant.
First Step for Business Alignment – Creating a Process Map
Let’s dig deeper into the fast-food restaurant illustration. Fast-food restaurants (also known as Quick Service Restaurants) derive more than 50% of their revenue from drive-through, so shortening the duration is key to a successful restaurant. The first step in reducing the drive-through time, is to map out the current drive-through process. At a high-level it is:
1. Taking the order
2. Taking the money
3. Preparing the food
4. Delivering the food (handing it to the person).
So, how do you shorten the drive-through time on these 4 areas? Would it decrease the drive-through time if the cashier was twice as fast? While it may be desirable to have a faster cashier, the amount of time saved would be negligible (along with the greater chance of error in order taking). The better approach is to step back and look at the process holistically by using process mapping.
Process Mapping along with the time durations for each process will reveal the Order Taking process can be broken into two sub parts. 1) The customer deciding what they want 2) verbalizing the order. The second part is fairly fast for most customers. Whether 3 items or 6 items are ordered, the time difference is slight. But the first part, the customer deciding what they want, especially if it is a family with small children can take many minutes. With a single drive through, the entire line is held up, until Junior decides if he wants a Happy Meal or a Big Mac (in the case of McDonalds). But with two drive-through lanes, Junior (lane 1) can take all the time he wants. People in lane 2 are happy since they aren’t delayed and can jump in front of junior because they ordered first.
Anything that contributes to Critical Success Factors, should be considered as an area to improve.
In future articles we will discuss how technology can used for Critical Success Factors.
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