Wednesday, January 14, 2009

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.

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