The Business Need
Sound strategic planning is fundamental to achieving business objectives. Execution of the strategy is difficult and the complexities created by out of sync and competing activities, processes, functional groups and systems across the organization create many obstacles on the road to success. Constant change, corporate politics, functional silos and many other factors affect progress toward business objectives.
A sound business plan and clearly defined goals are essential, but the key to successful execution is understanding how to accomplish those goals. This paper looks at process relationships and information flow across the business from strategic planning to achievement of the strategy, from great ideas to benefits realization. To ensure the business efficiently and effectively achieves its strategy; the organization must optimize the outcomes from their processes across the entire life-cycle.
While organizations put emphasis on improvement of individual processes, improvement across processes and systems is often neglected. This big picture transformation is more difficult to tackle. Over time, standalone systems, functional stovepipes and constant change cause issues around data, communication, processes, systems and performance. While this task of analyzing and improving the full life-cycle is difficult, the results are very valuable to the organization.
The Life-cycle Answers:
• Strategic Planning – How can the organization succeed?
• Portfolio Management – What should we be doing to achieve our strategy? How do we maximize ROI?
• Project Management – How do we best achieve these things we should be doing?
• Operations – are we effectively putting the plans in place for ongoing operations?
The Business Issues
Virtually every organization has information fragmented in multiple repositories and enterprise applications. Many obstacles keep organizations from meeting their basic needs for efficient operations, strategic alignment and profitability. Common business issues include:
o Duplication of effort and disconnected processes
o No standardization, documentation or understanding of process
o Poor metrics and poor performance
o Insufficient or bad data
o Difficulty in obtaining data
o No authoritative source of data, duplicate entry
o Insufficient applications and infrastructure to support best practice processes
o Disparate applications and systems
The Holistic view of the full life-cycle
Strategic Planning, Portfolio Management, Project Management, Program Management and Operations make up the life-cycle from concept to benefits realization. These processes exchange critical information. All of these processes contribute to achievement of strategy, thus are critical to business success.
Weaknesses in any of these areas will result in problems in the other areas as there is information feeds and dependencies between these functions. In addition, the processes in each of these major areas must be efficient and must provide quality information to the other areas.
Typical Process Area Issues:
• Strategic Planning – Objectives may not be clear and not understood by the organization and the Organization may not be able to interpret the strategy into what needs to be done.
• Portfolio Management – Many organizations don’t use objective criteria for investment selection which results in a Portfolio that is not optimized. The Portfolio may not be sized correctly to match resource capacity to demand.
• Project Management – There may be overlapping and redundant projects. There may be resource conflicts, priority conflicts and poor performance.
• Operations – Transition process may not be sufficient for a smooth roll-out. Rush to get to production can result in problems after roll-out.
The strategic goals are meaningless to the organization unless they are clear, understood by all and interpreted into the activities (Portfolio Management: selected projects) required to achieve the goals. This means that executives should not throw high-level strategic goals out to the organization with the directive to make it happen. Instead, they should have a clear idea of the major activities designed to meet the strategic objectives to ensure the organization is headed in the right direction. Leaders in Strategic Planning and Portfolio Management can work together to clearly connect the strategy with the required tactical activity.
Is it working? – Performance Management
Performance Management is an element in each of the processes as metrics and analysis are required to ensure each area is achieving its goals and to ensure benefits realization from the system as a whole. For decision makers, Portfolio Management will provide benefits realization metrics including financial benefits. Portfolio Management measures progress toward corporate goals based on the metrics for each goal and reports this information to Strategic Planning/Executives. For each Project, metrics will be established to ensure the project team is meeting the project goals. Project Performance is measured and analyzed to develop corrective actions and ensure risks are managed. This Performance information is reviewed in Project and Program reviews to ensure Project Management performance is optimized. Performance information is fed from the Project Management system to the Portfolio Management system (and/ or the Program Management system) to allow decision-making for the portfolio and programs. In Portfolio reviews, project performance is taken into consideration and failing projects may be stopped.
Where has this solution been applied and what were the results?
A division of a government agency required an analysis of all applications, systems, processes and data across life-cycle management. The analysis showed they had legacy systems that were no longer supported, high maintenance homemade tools (requiring frequent coding), applications that only had a handful of users, standalone applications for each process, data entered manually in more than one application and manual processes. The analysis led to corrective actions to eliminate or retire systems, automate and streamline processes and data feeds and implement a more robust infrastructure. An IT/ Process Roadmap was developed to provide the needed solution concept and plan.
A large company had merged many other companies into the organization. There were many scattered databases, duplication of effort, re-packaging of information for different levels of the organization, different databases, processes, and reports across the same functions. Excessive time was spent manually generating reports in preparation for management decision-making meetings. There were no standard project performance metrics across the enterprise. Portfolio management had been developed using a very complex process involving numerous Excel spreadsheets. A new life-cycle was designed to standardize and automate Project Management, Portfolio Management, IT Governance and Financial Management across the merged businesses. This solution brought all the data for these processes into a centralized database, providing greatly improved efficiency, improved data accuracy, cost and labor savings and elimination of non-value added work.
Building the Holistic Life-cycle Solution
How do you build the holistic life-cycle process to optimize sharing information across processes, eliminate duplication of tasks, and improve each process while optimizing across all processes? First, ensure high-level sponsorship with a clear understanding of the value of this effort from the top down. As this solution provides both strategic and tactical benefit and provides significant financial benefit, this holistic approach should be an easy “sell” to the leaders of the organization. However, the new life-cycle design may require breaking down barriers between functions and may bring major changes in governance and decision-making. Good Change Management planning can help ensure success of the new solution.
By mapping the current processes, systems and data flow, you will reveal gaps, duplications and problem areas. Analysis of this current situation will determine required improvements to establish the optimized life-cycle. Keep in mind that the goal is to improve individual processes as well as tying the processes together and developing good information flow and process coordination across the life-cycle.
This improved life-cycle will provide benefits of strategic achievement, a portfolio of investments with the highest ROI and improved efficiency across the organization. The transformation effort is not easy to achieve but well worth the effort.
1. Good Strategy: Sound business strategy tied to organization’s core competency. Strategy is interpreted into what gets done in the organization and the benefits are being realized!
2. Good Employees. They are empowered to do an amazing job and always finding better ways to do things. The employees are good at solving problems. They like to come to work and you aren’t even bribing them with free stuff!
3. Outstanding Leaders. They inspire, they motivate. They know what they are doing and keep up with and handle change brilliantly.
4. Corporate Culture is healthy. People collaborate, brainstorm, share knowledge. People care about their work. Not too much politics. Performance metrics measure the right things – to ensure the organization achieves its goals. For the most part, people get along together well and they are positive, glass half full types.
5. The leaders are on top of things: The business thrives in its industry. Leaders understand their market, stay on top of the industry trends and changes. They understand how to deal with the issues of the industry.
6. The organization can handle constant change. The business has the structure in place to change strategy (and associated execution) when major change occurs in the market. The organization is flexible and adaptable. The organization is agile because it has processes, procedures and standards that are just right – not over done (too much rigidity and processes causing inefficiency) or under done (everyone just does whatever!).
7. The company is proactive, not reactive. Issues are anticipated. Risk is managed. The business is quickly solving problems and making sound, rapid decisions as required to succeed.
8. The organization has creative thinkers and innovators. They are coming up with better ideas than the competition.
9. There are no silos. The functional areas work together!
10. The organization has the information and data they need to make the best decisions at all levels of the organization.
This is my brainstorming on what contributes to corporate success. I would love to hear your ideas. And if some of them sound a bit idealistic, they probably are. I am in a positive mood so that’s where the idealism comes in.
A thorough analysis of IT applications and systems in most organizations should reveal many opportunities for savings and improved efficiencies. Application rationalization is a process in which an organization’s IT assets are thoroughly reviewed and analyzed to develop a plan for improvements across all systems. Application Portfolio Management (APM) is a process to maintain and optimize the Portfolio of applications and systems.
The Business Drivers for Application Portfolio Management
What are the issues and concerns addressed by Application Rationalization and Application Portfolio Management? The table below shows the issues from the Business Leaders, users, IT Management and software management perspectives.
Issues Driving the Need for Application Rationalization and ongoing Application Portfolio analysis
•Inefficient Legacy Systems
•Business Interruption from System downtime
•Business needs not being met by the IT Initiatives
IT Customer Complaints:
•Takes too long to get information
•Data accuracy is suspect
•Technology issues are affecting the efficiency of the business Processes.
•Cannot obtain reports needed in a timely manner.
•Manual data entry and re-entry is required.
IT Management Pains:
•The IT Asset inventory is too large to be maintained by the limited IT resources.
•The Business does not see the value added from IT investments – Results in IT not having sufficient funds to complete required improvements.
•Database Centralization is needed as data is entered in more than one place manually or kept in individual spreadsheets, or paper forms.
•Systems are not Retired prior to the point where they fail.
Software Management Issues:
•Costs include unused licenses as the license tracking process is inefficient.
•Software is in use that is no longer supported by the vendor.
•Maintenance costs are out of control.
•Duplicate applications for the same purpose.
•Underutilized applications that should be eliminated.
Application rationalization looks at the business processes along with the IT systems, analyzing procedural issues as well as system issues to determine what needs to be improved or fixed.
What Application Portfolio Management does for the business
Application Portfolio Management extends the value of IT to the business by ensuring IT is meeting the business needs. Application Rationalization will provide cost savings and improved efficiency of business processes.
Application Rationalization optimizes the operation of the IT systems and applications, ensures data accuracy and ensures compliance with regulations. From the business perspective, the analysis ties IT to the business strategy and streamlines and improves processes.
The first step in the process is to inventory all applications, systems and processes. Questions to be answered for the entire application inventory include:
• How are the applications being used and who uses them?
• What processes does each application support?
• What data is input and output to the application?
• What is being spent to maintain, support, upgrade?
• What is the business value of the application?
• What strategic objectives does the application contribute to?
• What are the technical requirements?
• What is the level of customer satisfaction with the application or system.
• What is the risk associated with the application or system.
• Is there sufficient support for the system?
• Is the system managed and supported well?
Answers to these questions provide a clearer understanding of the state of the IT assets.
Application Portfolio Management requires thorough analysis of processes, operations, data and systems to enable good decision making regarding plans for the IT systems and applications. The analysis should look at the relationship of each asset to process, function, capability and data input and output.
Tools used for the analysis include:
• Process flow diagrams,
• Entity Relationship Diagrams for each application,
• Application budget and support costs
• Enterprise Architecture,
• functional and technical specs, user lists,
• help desk data,
• Database Analysis (requirements and data map)
• Data/ Process/ App/ System Relationships
• Associated Process information (process efficiency etc.)
Analysis of this information will identify redundant capability, costly assets (high cost to maintain), determine underutilized assets and highlight downtime issues. This analysis will be combined with the process analysis to determine required activities to optimize the portfolio.
With regard to process, the first questions to be answered: are the processes written and are they accurate? Just like applications, processes need to be easy to use and follow. Feedback from those who use the processes will determine which processes need re-engineering. A review of all processes together will determine gaps, overlaps and areas where the process flow is not optimal. This analysis will also determine opportunities for process automation.
Data accuracy and accessibility are essential to efficiency. Is data entered in more than one place? This would indicate opportunities for integration of systems. Users need to confirm that data is easy to find.
While data is gathered separately for applications and systems, processes and data, the information must be cross referenced. It is important to look at the relationships between the processes, applications and data. Which applications support which processes? What data is collected for each process? Are there labor intensive processes that can be automated? The Application Portfolio analysis will determine improvements for processes, applications, database structure and data collection. Decisions will be made to upgrade, sunset, combine and replace applications.
The analysis provided in application rationalization provides a great opportunity for IT to provide business value in cost savings and improved efficiency. Establishment of an ongoing Application Portfolio Management process ties IT to business as it clearly demonstrates the business value of the IT strategic plan.
Application Portfolio Management is an ongoing process requiring update to the inventory, information, analysis and recommendations as capabilities are added and as applications are retired. In addition, the Application Portfolio must be monitored and re-evaluated to ensure it is contributing to the business strategy.
For awhile my husband and son have been telling me I should put my “sports commentaries” in a blog post. This refers to my comments during various sports they are watching while I am waiting for the game to be over so I can watch something else! Before you write me off as a nut, I do like watching sports, just not some of them and I prefer being at the game. When you are waiting for a game to be over, it seems to go on forever. So during the time outs, I provide my comments: gee, is the coach telling them to hit more home runs, get more baskets or touchdowns? I know it is not that simple. But I also don’t like the way time outs make the game so much less spontaneous!
So here is a sports analogy. These sports teams are taking time out to strategize when something is going wrong. When a business is struggling, they usually regroup and try to figure the best strategy to resolve the issue. Sometimes this results in a knee jerk solution versus a strategic solution.
We all know change is constant, so review and analysis of changes in the industry, market, opportunities, trending and competition should be an ongoing part of the business. And this analysis should bring about new strategy to stay on top of the market. So just as in sports, business needs to change direction as external and internal events effect the business. In the past, annual strategic planning worked for businesses, not anymore! While change is constant, strategic planning and thinking must be ongoing.
While I get frustrated with the interruption in games caused by changing strategy, I think frequent strategic planning in business is not an interruption but a valuable, necessary part of business. And of course, as in sports, the strategy must be interpreted into what needs to be done to meet the new goals. The question must be asked often, are we doing the right things now to ensure ongoing success?
Is there any way to guarantee project success? Absolutely not, however, examining lessons learned from past projects can reveal valuable information to help ensure project success. Here I discuss processes, procedures and people to determine how to optimize project performances. Best practice project management procedures require that planning takes time and attention. Most seasoned project managers can recall a project that failed due to rushed (or no) planning. The project manager and project team are also important to project success. What makes a good project manager or project team? Corporate culture plays a strong role in aiding or hindering quality project management. It is important to keep in mind what has and hasn’t worked in the past as you plan and implement the project.
I once lead a project, which was viewed as easy by the management and as very risky by the project team. Management continuously told us this was a piece of cake (of course they wanted to believe this!). As a good project team, we conducted risk analysis and believed this to be very risky. Amazing that those of us who were going to be working on the project knew from the start that it would be one of the hardest things we ever did. All the scary facts were there: lean staffing and a late start, the team had absolutely no experience in some aspects of the project and the requirements on our statement of work did not match the signed customer contract. In addition, morale was low because we were short of resources and schedule was tight.
The project issues got worse as time went on. A key team member quit when the project had just one month left to go and some of the team members did NOT get along. Management continued to ignore the project issues, still seeing the project as an easy win.
Some very interesting things happened on this project, which resulted in its eventual success. To improve team attitude, we attended an inspiring seminar that helped us build an improved team attitude. The seminar reminded the team that you own the results of what you do. The attitude changed from “we are doomed” to “we will make this successful.” The fact that we were seen as performing poorly was both good and bad for us. This brought morale down but motivated us to “show leadership that we could succeed”. In an effort toward motivating the team, I did something I don’t think I would recommend to others but it worked for the project. I arrived at work very early and left when the last team member left. This made for very long hours and included weekends and holidays. I learned to test and run the equipment we were building. The team appreciated my hands-on approach and this helped grow a good team relationship.
All the team’s efforts were worth it in the end as the project succeeded. We had happy stakeholders – the customer, our management and our suppliers (as part of our team). We had the satisfaction of knowing we had done well despite all obstacles.
What caused this project’s success? First we had a strong commitment to project goals. The Project goals were simple: 1. Customer satisfaction (providing the equipment they needed on time and working to spec) and 2. Turn around our poor performance record. Customer satisfaction is always a goal but this was also our first external (outside our own organization) customer, promising a good deal of future business if we succeeded. Satisfying management would change the corporate culture as they recognized our competence and learned how to improve the culture to support project management. The team was very committed to the goals. Second, the team learned the power of teamwork and the power of strong commitment to doing things right to achieve project objectives. People understood that they could get beyond their issues with other team members by concentrating on the target – to make the project succeed. We had a good amount of discussion on the effect of dependent tasks on each other. Prior to this project, the team members focused on their own tasks without paying attention to the entire project plan. Third, we included the key stakeholders on the team. We worked with the customer both in showing the project progress as time went on as well as helping the customer in tasks they needed to complete for the project. We negotiated a mutually beneficial relationship with our vendors and included them on the project team. The vendors promised their quickest turnaround when we encountered sudden specialized needs (such as quick build of custom parts). We promised a good amount of future business to the vendors. This stakeholder participation lowered risk, lowered scope creep, and ensure that what we produced was what the customer needed. What are other ways to ensure project success?
Working toward Successful Projects
The first phase of a project’s lifecycle is very critical to its success. It is always important to complete a project in the timeliest manner but skimping on planning can lead to project failure. Once the project has been proven to be valuable to the organization, careful planning is needed. The stakeholders should be identified and analyzed. The key stakeholders define the project’s success criteria. Rather than rushing the planning to get on with the project and complete faster, in planning, you will find areas to trim time in implementation.
How many times have you heard people say, “we never have time to plan but we always have time to do it over”? For a project to succeed, the planning must be well thought out, thorough, documented and agreed upon. It is human nature to want to rush in and get started on a project, rather than spending considerable time planning. Yet it is well known that careful planning and project estimation is key to success of the project. Good planning can actually reduce the time required for the implementation phase. Important elements of project planning are stakeholder analysis, definition of success factors, team input and risk management planning.
Stakeholder analysis requires time and thought as there are the obvious stakeholders and the not so obvious stakeholders. There are stakeholders that determine if the project has succeeded and those that do not want the project to succeed. Among the stakeholders are people competing for your resources or with agendas that oppose your project. The Project Manager needs to formulate strategy for dealing with all stakeholders; ensuring key stakeholders participate as team members and negotiating with stakeholders that are competing for the same resources.
While the project manager and project team must bring the project in on time and in budget, this does not define success. In the end, the customer declares the project successful or failed. For this reason, the first step in Project Management is in understanding the project’s objectives. The Project Manager and team must work very closely with the customer and all stakeholders to ensure clear understanding of the critical success factors as well as understanding stakeholder issues. From the success factors, metrics should be defined to ensure the success factors can be demonstrated at the conclusion of the project.
As part of the stakeholder analysis, identify the Executive sponsor and determine the level of support provided by this project champion. If the project does not have good executive sponsorship, it is not likely to succeed.
Sometimes the stakeholders have unrealistic expectations. Customers almost always want it yesterday, cheap and perfect! The project’s schedule, budget or scope, as defined by the client, may not be reasonable. When we were designing custom equipment for our own company the schedule was set by the customer with no regard to how long it should take, the budget was set by the customer, based on what the customer could pay and, of course, the customer set the technical specification. Therefore, the budget, schedule, specification and stakeholder expectations were unrealistic. An example of both unrealistic expectations and improper customer strategy involved a project I was handed on my first day with a company. The project team was to design a machine that would automate work that was currently done manually. When it was transferred to me, the project was several months into its timeline with no design or concept developed. Yet, the customer thought the project was still on track. I recovered the situation by explaining the issue (while begging forgiveness) and bringing the customer onto the design team. As the customer had design concepts of his own, this plan worked out.
Throughout the Project: Managing Risk and Change
Scope creep is a big issue in project management. The project plan works for the scope of the project agreed to in the planning stage. As the project progresses, stakeholders, customers and even project team members can see opportunities to make the solution even better than originally planned. While this improvement sounds good, it will lead to cost overrun and schedule slippage. The Change Management process must be well established and must be adhered to by all involved with the project. Each change needs to be clearly documented, providing the impact to budget, schedule, resources, and risk and project results. The decision to include the change belongs to the project’s customer. On one project I managed, we decided that we should go forward with most of the customer out-of-scope changes simply to ensure customer satisfaction. This backfired on us. When the project was late and over budget, the customer saw this as project failure despite all the “free” changes we provided.
While the risk taker may not see the value to risk management planning, this is very important in project management. The risk management plan is not a document to be filed away once the planning is complete. The risks must be analyzed, documented and reviewed on a regular, ongoing basis. As the project progresses, risk mitigation activities will need to be completed as the issues occur and new risks will be discovered and included in the plan. Think of risk management planning as always having a plan A, plan B, and plan C.
Toward Successful Project Management
Best practices in Project Management require looking to the past, present and future:
- Look to the past –remembering what has worked and what hasn’t worked.
- In the Present – the project manager and project team must pay careful attention to all that is happening on the project t each day.
- Look to the future – through careful planning, adjusting as required and carrying out risk mitigation activities.