10 Commandments for Large Business and IT Transformation, Part 3

Part 1 of this three-part series looks at a real-world case of IT transformation breakdown and explores the causes for the failure. Part 2 explores the first five “commandments” for successful management of a transformation program.

Those guiding a major IT transformation will find their jobs easier — and be rewarded with better results — if they adhere to 10 best practices, or “commandments,” along the way. The first five: 1) The program management office must be independent and empowered; 2) Methodology must be clearly defined from the start; 3) Build a time-buffer into the schedule and re-plan after every phase; 4) Involve end-users throughout the program; and 5) Identify bottlenecks and clear them.

Following are the next five “commandments” for IT transformation success:

6. Avoid tracking progress of the project based on arithmetic (weighted) average of individual tasks. Focus on critical path activities and continuously review the critical path.

A lot of effort goes into progress tracking and reporting. As there are many teams involved, tracking the progress of the program can be an arduous task and definitely a full-time job. However, what we are referring to here is the accuracy of status reporting. How often is a project reported to be progressing smoothly until someone realizes that a critical task is behind schedule, thereby pushing back the end date by a few days or weeks?

It’s a very common occurrence to see a task at 90 percent completion level, but delayed by more than 100 percent of the planned duration. The common mistake is to compute the progress based on an arithmetic average of individual tasks without due regard to critical path activities.

This is especially true in a large program. A slight delay in one project (track) may have a cascading impact on other tracks, thereby putting the entire program in jeopardy. It’s important to collect details on critical path activities from various tracks in a consistent and uniform manner, so that the real status at the program level is visible to all stakeholders. It’s more important to know the “expected completion date” of tasks in-progress rather than just percentage completion.

7. Be aware of the organization’s risk appetite.

The risk appetite varies from organization to organization. It depends on several factors, such as the industry that it operates in, the type of product or service it sells, the maturity level of the product or service it sells, the competitiveness of the marketplace, and the inherent culture of the organization. Risk appetite of an organization is also driven by time-to-market considerations, particularly in the high-tech industry.

What is considered an acceptable risk in one organization may be unacceptable in another. Take the banking industry, for instance. Within a bank, the risk appetite of the retail banking business unit is lower than that of the investment banking business unit.

While evaluating the options to address the risk, it’s important to take into account the risk appetite of the organization.

8. Reach out to all levels to identify risks. Do not rely entirely on reports from track leads.

Most large programs conduct risk assessment at the beginning of the program, and many have formal risk review boards to review the risks periodically and manage them. However, the key is to identify the potential risks proactively.

Though there are no foolproof methods to uncover all the risks, it is important to reach out to lower levels of the management pyramid and not rely solely on reports from the track leads/project managers. The main advantage of reaching out to lower levels of the management pyramid is increasing the chances of uncovering and qualifying risks early.

At lower levels of management, where the accountability is limited in scope, the risks are freely discussed and therefore have a better chance of getting the attention of the risk review board.

9. Keep an open mind, and be ready to make course corrections.

As many of the business transformation programs run into several months (12-18 months), the team is confronted with many changes — changes to business requirements, changes in team composition — not to mention the technological challenges that surface during the execution phase.

Keeping an open mind and following a rigorous change management process are critical to ensure that these changes/challenges are addressed as objectively as possible.

10. Time is the only common unit of measure. While you may have to make short-term compromises, do not lose sight of long-term objectives.

The expression “time is money” is an old cliche. It’s more apt in project management, as it is the only common unit of measure that ties all the three dimensions of a project — namely scope, schedule and cost. Here, the term “time” is referred to as the “elapsed time” for the whole program.

Every change or delay needs to be looked at from the program standpoint. Any issue or change that impacts the elapsed time of the program not only increases the project cost, but also delays the business benefits expected to be realized by the program. Everyone needs to ask the question, how does this affect the elapsed time of the whole program?

Everyone may not have a direct or easy answer. However, probing the impact of every issue or every delay from a program standpoint allows the team to differentiate local issues from global issues, as well as to prioritize resources so as to minimize the impact to the overall program schedule.

Institutionalizing this culture in the team helps the team make short-term compromises while minimizing the impact to the long-term objectives.

In Conclusion

Finally, every program is unique, and several decisions need to be made during the course of the program.

While we can’t predict the numerous challenges we may encounter along the way, the fundamental principles discussed in this article will help the team stay on course toward meeting the objectives.

These are from my personal experience and by no means an exclusive set. As they say, excellence is a journey, and learning is a continuous process. The journey continues.

Raghuram Putcha, a program manager with Infosys Technologies’ enterprise solutions group, has managed several large IT transformation programs. He has more than 18 years of experience helping define and implement CRM and ERP strategies for Fortune 100 customers in the manufacturing, logistics, high-tech, banking, insurance and financial services industries.

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