Justifying IT projects

In many cases, IT projects get initiated with a wish list. There is a legitimate business need behind the project. The business defines that business need, but can't necessarily articulate it to the technical staff and/or suppliers. The business generally know what they are trying to achieve, but because there is no detailed definition, it is simply a wish.

These wishes need to be turned into plans. If you want to get more sales, many software suppliers will tell you to install Customer Relationship Management software (CRM). While CRM can help to improve sales, it is not a magic bullet. Just because you want it, doesn't make it happen. So far it's just a wish.

How do you change that wish into a reality? Sticking with CRM, the way it helps to increase sales, is that it helps you to improve your relationship with your customers. It provides the capability to track every interaction with your customer, no matter who talks to them, using whatever vehicle: phone, email, letter, even web. The software doesn't do it by itself, it provides the tools to do it.

Implementing CRM may totally change the roles and responsibility of your sales and support staff, as well as change the way your software works. If you justify the project based on the software aspects, you will get many of the costs, but few of the benefits.

In order to create a plan, you have to start with understanding how you will increase sales. If your intent is not to increase sales with existing customers, then CRM will be of no value.

If you do intend to increase sales to existing customers, then CRM software may be a solution. What benefits can be gained? Do you see a 10%, 20% gain? What else will have to change in terms of roles and responsibilities, other software, etc., for you to make that gain.

Most technology staff and suppliers will help you to install the software, but few will address the issues of how the business will have to change and what you will have to do to measure whether it is working. You may also end up implementing a lot more than you have to, to achieve your goals. Most software products have far more features than most companies need.

Even if you successfully implement the software and successfully gain the benefits that you expect, you may end up installing far more than you need and paying a much higher cost.

The biggest issue is justification of the expenditure. Start with the business goal. Then lay out a plan that shows how you will achieve it. This will define the benefit you will receive AND what components or activities are necessary to achieve it and what will provide the biggest benefit Then figure out the cost, and see how the costs map to the benefits. Drop anything that doesn't have a high benefit to cost.

This will get you out of the issue of dealing with all of the extraneous technical issues, the options that provide no value.

Does Software make you feel like a victim?

When business owners look at software, they are looking for solutions to their business problems. The software supplier describes the benefits in specific detail and often will describe how others are getting great business value from the software. You're sold. You buy the software.

If the solution was as good as you were told, then why are so many people frustrated by the experience?

There are the techies of course/ They enjoy the challenge of digging into a software product and seeing how it works. The more difficult it is to find, the more they enjoy it. But the people who enjoy it are a very small part of the population. The rest of us live with the consequences.

I have a long background in software. I've done software development. I've done software support. I've managed technical staff in mainframe hardware and software, as well as PCs and servers. I've managed staff in voice and data communications.

In all of these jobs, I've often found challenges in getting the results that I was looking for. I enjoyed the challenge of developing the solution, but often been frustrated by the experience. The software is seldom written for the average person. It is written by techies for techies. That why the average person is frustrated and feels like a victim.

I've developed a solution that has worked for me, in overcoming the frustration, the technobabble and working effectively with technical staff.

The are 5 simple steps to achieving business outcomes from business software. But first, you have to make a decision. Do you want to remain a victim?

Small Business Dreams for Information Technology

I speak to many business people who are frustrated with technology. They see what others are getting, and would like to get it for themselves, but they don't like technology or are not comfortable with technology, therefore they get frustrated.

The technicians that are hired to do a job, take away the need for business owners to become technical, but they also take away the focus from the business.

What's the business owner to do? He/she is not comfortable with technology. The technicians speak a different language and always talk about how complex it is, and how the business person doesn't understand.

All of that is BULL! The reason that the business owner doesn't understand is that the technician is not knowledgeable enough to explain it. I have worked with technology for many years, and there is one thing that I have learned. When somebody is not very skilled, they cannot explain what they are doing. The really experienced people, understand how to explain things in meaningful terms.

As a non-technical business owner, what do you need to do?

Let's start with a dream. If you had the perfect world (for the non-technical business owner), what would you have? You would ask a business question and get an answer that you would understand. There would be no complex jargon, no "you don't understand", just simple answers to simple questions. If there was a need for learning, your supplier (internal or external), would help you learn what you need to know so that you could make the necessary decisions.

So, as a business owner, why don't you assume that this is the world that you live in? If you can't get an answer that you understand, is the technician willing to provide you with the learning, on your terms, so that you can make the proper decisions? If not, find another one. I don't mean that you have to become technical. If you have no interest in that, you shouldn't have to. The technician should be able to provide you with what you need without being a techie.

The key to all of this is focus and determination. Determination to not let technicians befuddle you with technical mumbo-jumbo.

Thry it! You might like! It works. I know it..
what would they like to see? How do they get it?

Making Information Technology simpler for small business

I spoke to a couple of small business owners last night, who complained about the lack of solutions to their business needs. Every "solution" proposed by consultants and software suppliers started with "well, in order to do this, you've got to BLAH, BLAH , BLAH". That is what the small businessman heard.

Why? The business owner saw a small problem and wanted a small solution. What he got was a complex "solution", one that involved changing his business. Most software products used by business have been developed with all of the checks and balances that are needed to make sure that the business functions as it should. This is good if the business is actually doing this. However, most are not. So the problem is that a proposal to totally restructure the way the business operates is met with resistance. The business owner sees a small benefit, while the "solution" provider wants to make sure his software is used properly.

Added to this problem is that the business owner can't articulate his problem, nor communicate what he wants to the software supplier or consultant. The software supplier sees only the software and how it "should" be used.

Most software is flexible enough to be used without all the bells and whistles. There are limitations to the benefits when this happens, and potential problems down the road. But when the owner doesn't see the problems or benefits, he/she is often unwilling to commit to the major effort to achieve it. Software suppliers often ignore all of this in their efforts to sell the software. They quote the benefits without showing the impact that it will have, nor the prerequisites to getting all of the benefits.

I have written many times about the need to understand the business process improvements expected when you install new software. While that is valid, there is a need for the business to evolve and learn what the benefits can be and identify new problems that can be solved. If the owner cannot see these problems, then there is no benefit of attempting to solve it.

I prefer and incremental or iterative approach.

1. Identify the problem as the owner sees it.
2. Outline a solution with minimal effort to solve that problem, without putting them in a box.
3. Once that is solved, look at the new data provided and how that expands the possibilities that may be available to the business.
4. Identify the new problem as the owner now sees it. More information will help to describe the past problems in new ways, requiring new solutions.
5. As the business learns, the solutions will get bigger, and the prerequisite activity will get larger. However, the business will see that incremental effort yields new benefits and be more willing to support it.

Most small businesses don't have the resources to take on a large job. They may be willing to invest in the software, but not be prepared for a major investment in staff resources and time to do what's needed for a complete makeover.

Most businesses never use all of the functionality provided by the software products that they buy. When the big bang approach is used, they will be scared off until they need major enhancements again. They will put off the pain of the big bang for a long time, maybe until it's too late.

The incremental approach makes progress regularly, gets benefits in small chunks regularly and makes it more acceptable for small business.

Can a small business afford a Chief Information Officer (CIO)?

Every business is dependent on Information Technology today, yet many small business owners are frustrated with the results that they are getting.

For any business owner that lacks experience with technology, doesn't feel comfortable with technology, or just lacks the time to properly assess the value or the needs, it can be a very frustrating experience. Often a small business will hire someone to look after it.

That someone is typically an administrator or a junior technician that loves to play or learn about technology, but doesn't understand what the business needs or how to get it. Although it takes the burden of watching over IT from the owner, the result is that the business suffers.

In large organizations, more and more businesses are hiring Chief Information Officers. In some cases, it is just a title, but the effective ones are those that understand business, understand the business outcomes that the business is looking for and does not speak in technical terms.

This type of individual will not be attracted to a small firm, for two reasons:

• The small firm cannot afford to pay them.
• The small firm will not have enough challenge for them.

What the small business owner to do? There are three choices:

• Hire a technician? This does not help the business to take advantage of technology and grow the business
• Hire a full time CIO? He can't afford it, and probably couldn't find one who will come.
• Hire a part-time CIO? This may work for the larger firms, but could still be expensive.
• Hire a Virtual CIO? What is it?

A virtual CIO has all of the skills of the full time CIO and has a focus on the business. Instead of spending full time or part-time at your site directing your effort, the Virtual CIO brings all of the skills and knowledge to your business, providing guidance, advice, coaching and support to you and your staff, helping you to become more knowledgeable and capable. This means an affordable cost, that goes down as you learn to manage this yourselves. And it comes as "just enough" to let you choose how fast you want to work, how aggressive you want to be and how much you want to pay.

Consider this as an approach to getting the results that you want at a price that you can afford.

Why CRM fails

Customer Reltionship Management projects have a high failure rate. There are many reasons for failure and most of them have nothing to do with software. A recent article on InsiderCRM describes the issues.

The key to any software project is to recognize that there are three components to success, People, process and technology, and any project that focuses solely on the technology is doomed to failure.

To start with, you must recognize that salespeople are often independent operators within a business. If they don't see the value, they won't do what you need. Other parts of the business are often easier to work with, because their activities are integrated with the use of the software. Salespeople seldom can function without the software.

Secondly, you must recognize that the software is useless without a sales management process. The software provides you with a framework to deliver and improve that process, but it is not necessarily obvious.

The last is the software and other technical components. As some of these activities are complex and often take a lot of time, they often become the focus of the project. This is where everything gets off the rails. Yes, you must plan and implement the software, but this component is the least important.

The article that I have referenced describes this in more detail, but there are two items that stand out:

• Face the truth. What are the obstacles and challenges to making this work? They are unlikely to be the software or technology.
• What's in it for us? How will your business be improved by implementing CRM? Be very specific in terms of business outcomes. A wish will not achieve it.

Future state with a software project

When a business owner decides to take on a software project, they want to create an improvement in their business. With a owner managed business, this is more important that with a public business, because the money is coming out of the owner's pocket.

If this is so important, then why do many business owners get frustrated with the results achieved.

Many projects taken on to improve a business start off with a dream of improved results, but they are often just a dream. You look at what others have achieved, and HOPE to do the same. You don't know how they did it, but they used this software and got results.

The reasons are very simple, but not necessary very easy. As Albert Einstein said: "Life is simple, but not easy". The same is true of software projects. In order to get the results that you need, you need to understand HOW you will get those results. Your business is working a certain way today. How will the software change the way you get results? How will that benefit yoyr business? How will you know that you are succeeding?

If you can't answer these questions, you will be disappointed.

You understand your business. You don't need to understand the software. But you do need to understand how the software will help you. And you do have to play a major role in the decisions that are made during implementation of the software, because these can be critical.

Dream about what you want the future to be like. That's great. Then take a detailed look at what you have to do to make it that way.



http://www.valuedeliverymanagement.com/blog/index.php/2009/01/20/critical-insights-1/

Is your IT service delivering what the business needs?

A CIO Magazine article "What it takes to succeedNow as a CIO" described the difference between results described by the CIO (Chief Information Officer) and the CEO of organizations. Much of this relates to the definition of expectations. Many CIOs are still buried in managing Information Technology and still not focused enough on business outcomes.

Some statistics in this study:

• 70% of 506 CIOs rated IT as "considered an integral business partner by the rest of the company", while 46% of the business respondents rated IT as fair or poor.
• When asked about the impact of IT, "only 15 percent of you chose managing customer relationships and 11 percent said acquiring and retaining customers", yet these were critical to the business.

The real story is in this quote "There's an outcome that we need. How do we get it? Not, 'We need a new system. Please put it in." If your business discussion is not being held this way, then your business will lose. Whether you have a CIO or an IT Manager, or no IT department at all, this is the type of discussion that needs to take place.

You can see the full article here.

New Years IT Resolution

Every new year's day, people make New Years Resolutions for themselves. While some are successful and others may not be, should we be looking at doing this for our business?

This year, in particular, it may be more important than any other, with the state of the economy.

When business is good, we focus on selling and satisfying our customers needs. We seldom have time to do anything else. What do we do when business slows down?

There are two things that we can do:

• Look at ways to increase sales.
• Look at ways to reduce costs.

Often both actions are taken, but not effective.

If we look at increasing sales in areas that are not profitable, we lose. Yes, we have increased sales, but perhaps at a high cost.

If we look at our current customers, those that are the most profitable for us, and see how we can increase their sales, we get a double benefit. How do we do that? We need better information about our customers and the quality of service that is being delivered. Where do we get this? We get it from our computer systems. Many businesses don't look at this information, sometimes because it is hard to retrieve. But it is there and if we dig into it, we can find a lot of information. Because sales are down, you have more time to look at improving serice. If you get better profitability from your customers, the extra cost may be worth it.

One of the first things most companies do to reduce costs is to cut staff. While that may provide some short term relief, it also weakens your company. You lose the skills that they have developed, you can provide the additional support to improve quality of your most profitable clients, and you have no basis for competing with those who do. There are many ways to reduce costs and cutting staff, although perhaps the easiest, is the least effective. If you delve into your business processes to try and improve productivity, you get a double benefit.

• You reduce cost in a way that stays with you. You are able to take advantage of it when business picks up.
• You get more time to focus on improving the quality of service and therefore you can compete more effectively, perhaps even increasing sales during a recession.

How do you get the information to do all of this? Again you get it from your computer systems. We all use software to run our business. This software is typically used only at an activity level to manage transactions. We use only a small percentage of the software that we own. There is a tremendous opportunity to increase the value that we get from this software, without buying more.

So your New Years Resolution should be to increase the return on investment from your existing software. Your company will be more profitable, not just today, but for years to come.

Should software installation be profitable?

When an organization installs software, they do so for many reasons. They want something that they currently can't get from their existing business software. In large businesses, they assume that a lot of investment is required in order to gain the advantage that they are looking for. In small businesses, they want to minimize the investment, yet want to gain the advantage as quickly as possible.

Which approach is better? While many small business projects are underfunded, many large businesses overfund their projects and are willing to wait too long for results. This is the primary reason why business units often abdicate their responsibilities to the IT project team. They get tired of waiting for results, and there are too many technical discussions that have nothing to do with improving the business.

Every project to make significant changes to a business can be improved if there is a focus on the bottom line. They should have an interest in making the project profitable for the business as soon as possible. There are at least two benefits of this approach. The first is that less money will be spent before money starts coming back in. This means that the business will be more willing to spend time and effort on the project. Second, because there has been a return on investment already, business people will look to get results and won't get fed up waiting. Because business people are more involved, there will be pressure to drive more results.

I think that the half life of a project is about 3 months. There are too many distractions in running a business to keep someone's attention focused on something that doesn't produce visible results.

So, you should plan to deliver some results from your project within three months. You can incrementally add to the project as it makes progress.

Whether in a small or large business a lack of short term results leads to a lack of interest.

Is a technology upgrade necessary or adding value to your business?

Many small businesses face a challenge when dealing with todays technology. Most of the hardware and software far exceeds our capacity to use their features and functions. Yet in order to maintain support from the software supplier, we have to upgrade to a new version.

This might be ok, except for the fact that there is so much extra capacity in the hardware that the software developers do two things:

• They get sloppy with their development or add new features, because the new hardware can support it.
• They include these new components in the basic package, forcing you to run out of capacity on your desktop or server.

The end result is that you have to upgrade your hardware and software, just to maintain your status quo. The alternative is to lose support from the supplier.

Many small businesses do just that. They can't see the value of the upgrades and don't see support as a major concern. They get very little anyway.

The the big one happens. They have to upgrade because the software will no longer do the job. This causes a major disruption. The changes are so large that it is just like buying a new software product.

Most small businesses resist the upgrades because they can't see the value. They are given no alternative.

Developing changes in the industry are addressing this issue, but many small businesses are reluctant to take it on, because the model is different.

In the past, you bought your hardware and software. You owned it. You didn't have to pay for usage. The new model is usage based. You pay of usage of software. This payment never ends. The advantage is that you don't have to worry about hardware and software upgrades. No large capital expenditures. The supplier is responsible for keeping the hardware and software up-to-date. This is called Software as a Services (SaaS).

A small business should look at this in the same way they look at a building. You rent space. The advantage is that you get a cheap entry point. When you need extra space, you rent more. If you need less, you can release the space. When major changes in building codes come up, you let the landlord pay for it.

This is a good solution for small business. Most small businesses cannot afford the skills and time required to maintain all of the hardware and software. Hardware and software upgrades add no value to their business.

You do more than outsource the maintenance of the technology, you have outsourced the responsibility for it as well.

Todays tools allow you to do this for software and servers and also desktops.

an example.

Is your new software providing new value?

Many software suppliers claim to have the better answer, but is it just more of the same? When a business implements new software, they encounter reductions in productivity caused by the lack of familiarity with the software, the learning curve, the increased stress due to the change.

A business needs to get value from this type of change. In a blog on ZDNet, the writer sates that software companies cannot continue to focus on new whiz bang features, but must contribute real business value, something that is shown on the bottom line.

I agree. But how does a small business assess that business value from all of the statements that are made by the software suppliers? How do they know what contributes to business value?

The first stage is to understand the real business need. Every business runs on its business processes. If value is to be contributed, the business process must improve. Improvements can come in terms of cost reduction (less to deliver existing returns), productivity (more work for the same cost), quality (less returns or more sales), cash flow, etc.

The first question is: "Can your existing software be used to deliver that value?". If it can, then use it! That delivers increased value for a flat software cost and no loss of productivity. That value alone may be enough to stay with the current software. If your current software can't do it all, but can do some, then you must evaluate the additional value possible against the cost of not only the new software, but also the loss of productivity.

To check out that writer's perspective, click here.

Most Software Projects plan to fail

The success rate for software projects in most businesses are set up in a way that makes them easy to fail. They fail to achieve the original exectations of the business. The reasons are fairly simple. They are set up as technology based projects to achieve a technical objective, that of installing the software. Yes, there are other activities, but they typically lack a business focus.

The approach is as follows:

1. The business has a goal. Let's say it is to increase sales through the implementation of CRM software (Customer Relationship Management). CRM software allows you to understand your relationship with a customer better, and HOPEFULLY, to increase sales as a result. The business has certain expectations of what will be delivered (business outcomes), but they are not clearly defined.
2. CRM software is purchased to implement this function. A project plan is produced to provide the function. The project defines the project outcomes to be delivered. This includes the software, perhaps additional hardware, training, perhaps data conversion.
3. The project delivers the project outcomes (assuming it is very successful).
4. The business is left to make the busines outcomes happen using the software that has been delivered.
5. Has the project been successful? Is the business happy? Success rates of 20-30% have been identified on software projects. Business expectations are not met.

In order to have a success project, business expectations have to be met. In order to do that, we must define business outcomes, not project outcomes. Typical IT project outcomes are a subset of business outcomes. The plan needs to change.

1. The business has a goal. The business defines the business outcomes that must be ahieved in order for the project to be successful.
2. A project plan is developed to meet the business outcomes, including not only the items above, but also including changes in business process, change of roles/responsibilities, etc.
3. The project delivers on its activities, which produces the desired business outcomes. If not, adjustments are made until it does.
4. We don't have two teams, we have one. The business result is a common measure for both.

One of the most common problems in many IT projects is that business people get tired of all of the technical activities and abdicate their responsibilities to the IT team. Taking the second approach, reduces the risk of this happenning, because the business outcomes are key elements of the project.

Getting Business Value from Software Training

Learning to use new software can have a big impact on software productivity. Your goal in getting new software is to make your employees more productive. That may not always be obvious, because you may be using the software so that you don't need as many staff, but you still are getting more productivity. You get more work done with fewer people.

Most organizations don't think of that when they buy new software. Training is considered to be a necessary expenditure, but not critical to success of the project.

On the contrary, it may be the most critical element. If you are looking for a productivity boost of 25%, but actually get a reduction during imple,mentation and for 6 months after, you are losing a lot of the benefit that you expected, even if you gain that 25% later on.

Part of that may be due to resistance to change, peak workload issues, and new staff, but I believe that most of it is due to poor training methodology.

Most software training follows the firehose approach. It's like drinking from a firehose! You get a crash course on the software features and functions, but very little context. By context, I mean the standard WIIFM (what in it for me?). Unless I understand how I will use a function, I am not likely to remember much about it. Many trainers may try to put context around it, by showing how it would be used, but that context may not apply to your organization.

When you buy new software, you typically are buying a new way of doing business (you don't want to do it the old way or you wouldn't have bought it!). This new way is a change in your business process. If the context that the trainer is providing is based on the new process and your people don't understand it, the context will be meaningless.

The solution is to start with the business process, understand how the software will help to improve the business process, then to provide training with this new context in mind. You employees will have less confusion, you will get less resistance to the change and your employees will become productive much more quickly.

Why not Experiment with Software during a Recession?

Most of the software that we use in business today far exceeds our normal business usage. Even with normal office products such as Microsoft Word, most of us use very few of the features. Even though I have been comfortable with computers for many years, and always work with multiple products at the same time, I use very few of the functions. I only expand my use when I have a problem and need to do something that I have never done before. Even then, I often use the products and features that I am comfortable with.

This works just fine if I only have to do something once. It isn't worth the time and effort to learn new products and features, when I can do the job faster with the tools that I currently have.

Most businesses are using much more complicated software these days Enterprise Resource Planning (ERP) software coordinates data from many different parts of the business. These products are designed for many different businesses and provide functionality to support them all. Any single business probably uses a very little percentage of these products. Luckily, many of them are modular, so that you don't have to buy all of the components. However, the complexity still exists.

Implementing an extensive software product is a very painful operation. Everybody has to be retrained and becomes uncomfortable because they no longer can do their jobs easily until they learn the new software. As they become comfortable and learn how to get the job done, they typically stop learning about the functions of the software, even though there may be much easier ways of doing the job if they knew more about the software.

The reason they stop learning is that they are getting the job done. They don't need the extra features and don't have time to learn them because of business volumes. They may also not know how to start looking for additional features. Most software suppliers have a standard training package, that doesn't allow for investigation and/or experimentation.

During a recession, volumes are lower and employees may have time to learn, but don't know how to go about doing it. Where do they start?

I worked with one software company that was receptive to the idea of developing specialized training. I set out to see how we could get much more effective use of the software. I asked them to show us how we could get much better use as well as where they would not recommend it use. It worked very well. Our organization became much stronger for a number of reasons:

• It wasn't their first exposure to the software. They had all used it for over a year.
• They had a lot of questions, that they had been too busy to ask.
• We addressed the business problems and looked at how the software could be used to improve things.

This worked because the supplier was receptive. I have worked with other suppliers that weren't as receptive. Mostly this was because the trainers didn't know the software well enough. This may be one of the criteria. Judging the capabilities of your trainers may be one of the most difficult things.