Business Value - the Silver Bullet

A detailed study of project success performed in Australia provided another perspective on the failure rate of projects (this went beyond IT projects). A very small percentage of project succeeded in delivering business goals. They failed, not because of poor project management, nor technical difficulty, but because they never defined the business value that was to be delivered.

The projects got initiated with a fuzzy definition of what was to be delivered. It was assumed that by completing the implementation that business benefits would be delivered, but nobody was focused on this. They were focused on the implementation. However, implementation of software delivers a small portion of the benefits, and unless the full business value is identified, success will never be achieved.

I have seen many projects initiated with an attempt to provide "justification". This justification always seemed to focus on identifiable financial benefits, and not on the business value generated. For example, improved productivity was only measured if staffing could be reduced. In addition, this lack of identification of business value leaves a lot of benefit on the table.

I recently completed a project where one of the business goals was to be able to invoice within three days of completion of a job. Within three months, we had achieved that objective and that benefit alone paid for not only my contract fees, but for the original purchase and install of all of the hardware and software. The previous project had been to install the software. While implementation of the software had been completed, the business never saw the value until we focused clearly on these goals.

Why is it that so few projects focus on business value? In my experience, most software projects take on a life of their own, once they are initiated. Many compromises later, the project is completed and there is no way to measure its success. We can measure it one way; the business people are always disappointed. Their expectations (not written down) were not met. A focus on business value would eliminate that problem.