3 ways to ensure you derive value from IT transformation

tony price.JPGBy Tony Price, World Wide Lead for Strategy and Transformation Consulting, HP Software Professional Services

 

(Tony Price has 33 years of IT experience, originally starting his career in mainframe technologies and data centre operations. Tony was also an author/contributor to the ITIL® publications and has extensive experience in IT Service Management. He has personally delivered several global IT transformation projects and has a passion for delivering business outcomes.)

 

How do you define value when it comes to IT transformation? The answer, of course, depends largely on whom you ask. A business executive or CIO may have significantly different views than a finance director, for example.  Some examples of what I have seen described as value:

  • Value equals savings from less downtime 
  • Reduction of full-time equivalents (FTEs) by X%
  • Faster time to market thanks to a cloud-based development environment allowing for revenue generation sooner

 

Though the above are good examples, it amazes me that we only seem to ask senior members of the organisation what they see as value.  If we were to ask IT customers for their definition of value, we’d likely hear something slightly different—and more specific. You may hear such answers as, “Value is when IT helps me close a sale faster”, or, “I can find out who else in the company shares my expertise about our business experience in emerging markets”. Not so scary—unless, perhaps it’s your job to ensure that you achieve value according to such definitions.

 

As I noted in a previous blog post, IT transformation promises many benefits, not the least of which is that it allows IT to work with the business to change the way you do things and take the business and IT to a completely different place so as to ultimately drive value.

 

IT should always aim to deliver the value promised at the start of an IT transformation project. When we fail to do so, people lose faith in the idea of IT transformation and I have seen this sadly too many times in my career.

 

How to integrate value into your IT transformation plan

With value such a loaded word, you risk failure—and joining the 70 percent of IT transformation projects that do fail—by strutting onto the scene guaranteeing your project will provide value. On the other hand, why bother with IT transformation at all if you don’t aim for the rooftops?

 

To help ensure you integrate value into your IT transformation plan, I recommend that you:

 

1)      Define exactly what “value” means in your organization and how to measure it.

2)      Define current state and desired end state.

3)      Integrate regular “value drops” along the way—every 90 days or so, depending on the length of the project.

 

Defining value

Your definition of value will differ from that of the next organization depending on a variety of factors. Why not begin by asking key stakeholders what do they perceive as value? I like to ask this open question before asking more definitive questions like how would you formally define and measure value as I find people are far more willing to express to you what they really see as value when you leave the question open. Then you come up with an agreed-upon definition that integrates “hard” benefits, such as cost reduction and faster time to market with “soft” or perceptual benefits your customers can ultimately enjoy.

 

Establishing the definition of value must take place in the initial planning stage and be integrated in the framework of any project. It’s not unusual for companies to conduct studies up front to help determine the true definition of value, but then they don’t return to them once the project is underway. Why?  This always amazes me but I see it far too often.  It’s hardly a surprise that organisations that do this have trouble with their transformation projects when key stakeholders become nervous and question the investment.

 

The big reveal

I often see IT transformation projects that load all the value at the end of the project in the style of a big reveal. I have isolated a few common reasons why:

 

  • People are wary of announcing value too early in case things go wrong later.
  • Value delivered early on may look insignificant when examined on its own, so people focus instead on the cumulative value.
  • They forget to measure value from the outset, so they tack it on at the end of the project.
  • They get too entrenched in the technical challenges of the project to define and measure value.
  • They fear if they show value too early, it might spawn new requirements that could derail the transformation.

 

Value should come in regular drops.  Why? It’s your best shot at keeping stakeholders engaged and the business happy. Unfortunately in my career I have encountered many projects that have committed to deriving value at the end, then use this as a threat to try to move the project forward: We have committed ‘X’ to the business and if we don’t deliver we will be fired.  But basic psychology tells us that while fear may mobilise people initially, it’s not sustainable long-term. Value motivates and sustains—it is an essential component of any transformation.

 

Please also consider points in my previous blog posts about what IT transformation is (and isn’t), and how to sustain an IT transformation project to reach successful outcomes. In future posts, I plan to share tips for how to course-correct when an IT transformation takes a wrong turn.

 

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