IT projects without a goal

I see a lot of IT projects that are undertaken without a clear goal and this gets reflected in the failures. A good example is the recent cancellation of an SAP implementation by Select Comfort hotels.

During periods of slow sales or recession, a company should be focused on improving productivity or reducing costs. Implementation of new software should be based on increased sales, improved productivity or reduced costs. In this case, Select Comfort is cancelling an SAP implementation to save money. This is contrary to what they should be doing, if the original purpose was valid.

As described in the referenced BLOG entry and original announcement, the SAP implementation didn't seem to have a business goal. There were no identified problems with the original ORACLE system and no defined need for the conversion.

If Select Comfort had a measurable goal, they wouldn't have cancelled it during a slow period. They would have intensified their efforts.

Do you want to buy technology or upgrade your business?

Software companies sell software as a business solution. Are small businesses getting a business solution, or are they just getting software packaged that way?

When a business owner or manager looks for software, they are trying to solve a business problem. They are seldom looking for new software. Look at software as a way to upgrade your business.

What many businesses get insteadare a series of problems that they must deal with. Hopefully they overcome most of these, and recover to achieve a good return on thei investment. However, the cost are often much more than they need to be, due to a lack of planning for business outcomes, a lack of awareness of technology and a lack of experience with technology projects.

Bringing the world of Information Technology, Business and Health together

I attended a set of seminars at BITNET (Business and Information Technology Network) yesterday. The presentations were focused on Health Care and its use of technology, and the progress (or lack thereof) that was being made.

A lot of interesting presentations, especially if you are in the Health Care field. But what does it have to do with Small Business? Part of the presentation included the efforts of McMaster University in bringing together three part of the University to develop this area. They have created a structure that brings their Business School, the Health program and their Information Technology program to address the issues.

What a concept!

Much of my BLOG has talked about bringing business and technology together to provide business value and measure success, not by projects or successful technology implementations, but by successful business outcomes.

With McMaster's program, they have brought the needs (the Health Care industry) for information and decision support together with the tools (information Technology) and the Business Management into one group. They have the opportunity to bring business reality to the Health Care needs and Information Technology.

I have seen too many situations where needs are defined as all of the things that I'd like to have, and the solutions developed by an "I can do that" attitude. The results are often a complex technical solution that does little to solve the business problem at too high a cost.

Small Businesses don't need a large, complex organization to develop solutions. They do need technology. They do need to understand the business processes they are addressing and the business outcomes to be delivered. And, they need to keep control of costs. Too often software is installed and business results aren't delivered.

In the Health Care industry, MacMaster is trying to solve that, and I applaud them.

BITNET is expecting to post the presentations on their website. If you want to check them out, see BITNET. For McMaster's eHealth program see eHealth.

Who is responsible for IT project results?

Many of the business owners and managers that I talk to are frustrated with the results that they get from IT projects. They take too long, they cost too much, they don't do what the business owner or manager want to do. Even with those who are relatively satisfied with the results aren't getting what they should be. I see many businesses who are satisfied with the results when so much more is available..

Why does this happen?

The reason is that there are three conflicting goals in any project. They are conflicting because even though everybody believes that they are all important, they compete for resources, for attention, for focus. The three are:

• Implementation of the software and processes to get the improvements that your business is looking for.
• Achieving the business goals for which the software and hardware was purchased.
• Running the day-to-day business.

The first goal gets all of the attention. Usually a project manager is assigned, and she knows that she must get the software installed in order to have a successful project. If the project manager is your software supplier, his goal is to get paid. What is a successful project? At best, the software delivers the functionality that was requested, at the cost that was estimated, in the time that was planned. Why did I say at best? Because if that is the criteria for success why was the business doing it? A lot of consultants have studied IT project success. In these studies, although there have been improvements over the past ten years, aprroximately 30% succeed, 40% have limited success, and 40% are outright failures. Even with those successful projects, they achieve less than they could have. The project manager typically owns this goal and tries to keep everybody focused.

The third goal, running the business, has to get attention. It is what brings in the money. It pays for the purchase of the software, which is supposed to improve business performance. The first goal competes with the third goal, because they both need resources (people, time and money). Few businesses have periods of downtime that allow them to reallocate resources to projects during slow times. Most of the time, both peak at the same time. In addition, implementing new software and learning new ways of doing things reduces productivity. So you have peak resource needs for the project, peak resource needs for running the business and low productivity. This problem exists in large companies that can afford to throw extra people at the project. It really hurts the small business. The business unit manager is responsible for this goal and tries to keep everybody focused on it.

The second goal is the biggest challenge. the reason all of this started is that the business owner wanted to improve performance. The software was purchased for this purpose. The assumption that was made, was that if the software was acquired, the business would be better off. The question that was missed is "how will the business improvements be achieved?". This may seem to be obvious, but it seldom is. Because nothing was specified as to how it would be achieved, the implementation of the software becomes the only goal. People lose touch with why it is being done. Since the business owner is not involved in the day-to-day activities, and seldom wants to get involved in the detailed activities of the project, there is a big gap.

This gap is the source of the problems. There is a focus on the delivery of the software. There is a focus on delivery of service to the customer. There is no focus on the business benefits.

The solution must come from the leadership team. The owner and senior managers must set the goal (to improve sales, reduce costs, improve service, etc.). They must ensure that everybody understands how the software will help to improve performance. They must maintain this focus throughout the project, because everybody will forget. If they do that, two things will happen:

• The software will deliver the business results.
• They will be surprised by the extent of the improvements.

Stage 1 - Managing IT for the non-technical manager - Basic Infrastructure

Many business owners are frustrated that their computers don't just run. Everybody tells them that they need to become more technical. Everybody that tells you that is wrong. You don't need to be more technical. You need to understand how to manage Information Technology so that it supports your business.

The first stage of managing IT is the basic infrastructure. Before getting any value from IT, you have to buy hardware and software. This doesn't do anything for you except give you access to tools that will help you run your business. Managing IT at this level means that it has to work.

Those who are uncomfortable with technology, or just don't want to spend their time there, tend to ignore it, or "delegate" it to some junior technician in their business. Typically this person is technical, is comfortable with playing in technology and will find a way to fix problems that come up.

What they won't do is manage the reliability of the technology, because they don't have the experience to do that. You will get a reactive situation. Problems will occur, and your staff will be unproductive during those times. The bigger problem will be that you don't know what is lurking. Since the technology is not being managed, you won't see a problem until it occurs. Then it will likely have a significant impact on your business. A client of mine recently experienced a 3 day outage due to a minor problem with the server. It took 3 days to diagnose and fix. During that time, their activity didn't stop, but the business processes did. They couldn't invoice and it took weeks to catch up.

Trying to hire someone to support IT in your business is a real challenge. You can't pay high salaries, so you get a junior person. Hiring a senior at a high salary doesn't work either. They just get bored and leave.

Contracting with an outside supplier seems to be a good solution. If you "delegate" the support to the outside supplier, you may be somewhat better off. You no longer have to worry about hiring, training, etc. But if that's all you do, you will not gain much benefit unless your supplier is managing IT for you and not just reacting the way that your staff did. And unless you have defined the goals that they are managing to, you still may be subject to failures that could have been prevented. (the client mentioned earlier had outsourced IT support).

You need to set goals for your supplier, that leaves you in control, but lets them manage the support on a day-to-day basis. Each business will have a unique set of targets, but the goals will fall into the following categories:

1. Asset management: What hardware, software and other components do you have? What did they cost you? Are they up-to-date? Are they properly licensed? Upgrades are often required to software. Some of these drive hardware upgrades. If you have this available, it will cost you less to get an assessment of future upgrades and may also prevent problems, or ease recovery from major problems.
2. Risk management: This includes anti-virus, security, non-business use. This area is the source of many problems. If managed properly, you can prevent problems from occurring, or at least identify them more quickly, speeding up recovery.
3. Backup management: Do you have backup? Does it work? How would you recover from a failure? Many businesses have difficulty focusing in this area, because of day-to-day pressures. You can define the needs once and have your supplier commit to this area on a day-to-day basis.
4. Reliability management: Do you track service incidents? Does your supplier? What is the business impact? What can be done to prevent these incidents? An analysis of these inciedents will identify actions that should be taken in one of the other areas.

Setting up these management processes, a one time event, will mean that what you spend on software to run your business will have the opportunity to provide the return on investment that you were looking for.

It will also reduce your frustrations, and provide you with the feeling that you are in control, not just subject to the whims of computers or computer technicians.

This first stage is the foundation. If your technology infrastructure is not stable, the only thing taht you will accomplish by putting in more software is to increase your frustrations and opportunity to be affected by failures.

Can a Not-for-profit organization afford free services?

Not-for-profit organizations are always struggling with paying for the services to manage their business operations.

They are in operation to deliver a service to the community and typically do an excellent job at this, providing essential services. When it comes to business operations, however, they often do poorly. Funding organizations will provide funding for delivery of service, for staring new initiatives, but not for office operations. So many NFPs look to get these services for free. They attempt to get skilled people to contribute their time, so that it does not cost the organization anything.

The services that they get are often hit and miss (they get what the volunteer can give) and inconsistent. Each volunteer will approach the issue differently and often any learning or documentation that is collected is lost or not made available to the next volunteer.

Business operations are no different in small business and NFPs. They need to run their business effectively. A consistent level of service is required in the office as well as to the clients. However, there is often a huge gap between the levels of service delivered. The clients get good service (that is why the organization was started and why people volunteer). The office gets second class service (not a priority for office staff or volunteers).

I see this problem in IT service on a regular basis. Computers are essential to running a business today (as well as NFPs). They can provide excellent value if they function properly. They can create tremendous stress when they don't. One of the major factors in quality of service is consistency of maintenance. If computers are not maintained consistently, they do not perform. The end result is frustration, ongoing service problems and difficulty in maintaining the level of service that the business or NFPs is in operation to provide.

Using volunteers for this type of service will cost an NFP more money that they save in the maintenance of their equipment. Their stress will go up, their productivity will go down, they will spend excessive amounts of time trying to find a good volunteer to maintain their equipment. They will suffer from the inconsistency as each volunteer solves problems a different way, and creates new ones in the process.

If you want to focus on delivering the service that your NFP is in operation to do, look at whether you can afford to get free technical support.

For some ideas on how to do that, check out my website at http://www.thevirtualcio.ca/. I don't fix computers. I help organizations to make more effective use of them.

Getting started on a software project

I have a problem with starting software projects. I have been working with software for my whole career, and typically when I start working with a company, I understand the situation and what needs to be done.

While it is obvious to me, it is seldom obvious to my clients and their staff. They called me for help because they were not able to achieve the goals that they set out for themselves. I am ready to get going and can see the steps that need to be taken, but I can't go there.

Over time, I have learned that I can only go as fast as my clients are capable. In the early stages, it seems quite slow and little visible progress is seen. This can be frustrating for managers of projects as they are anxious to get going. However, this is a difficult time for people to go off in a rush. They are working in unfamiliar territory, with changes to their business processes, new technology and tools and typically a new list of issues every day. This is not normal operations.

Many consultants will offer a "solution" to this problem. They will bring in a group of outsiders who will make the project happen. There is a flurry of activity and everybody is happy. Then the project grinds to a halt. Often this is because roadblock and roadblock has been put in the way. This is usually after a lot of money and time has been spent. The reality hits that the staff has to know what is going on. It can't work without them.

While the early stages of a project can be frustrating for those that know what needs to happpen next, it is a time of learning, and sometimes learning can be slow. people learn what they need to know. Once learning has started and everybody understands where things are going, they start to look for opportunities to use the software and they understand how it can help them.

This occurred in a recent project that I worked on with a client. The first month was frustratingly slow. We focused on the business process and looked for ways that the software could help improve the process. We uncovered many process issues that would prevent successful implementation. In the second month, things were still slow. Volume of work prevented catching up with the backlog, but now we were no longer building a backlog. We were keeping up with day to day requirements. More process problems were identified and resolved. By the end of the third month, the staff had taken ownership of the software and could see how it was helping them. The backlog was eliminated and the software was functioning as desired.

Although progress was slow in the early stages and required ongoing support and coaching, the learning process was happening. The slow start was worth it.

In starting any new project, leave time for learning. Start slow. It will pay for itself later on. I have seen too many failures where companies bring in a ast of thousands to make early progress. The only thing that they succeed in doing is increasing the costs.