In a recent exercise with one major corporation we reviewed six of their recently approved multi-million dollar projects — and found five of them should not have been approved.
These projects needed to be done, but the way they had been scoped and framed minimized their business value (but not their cost).
From these reviews, and many others, we found some leading indicators that should make you afraid to approve such projects.
1 Technology only or technology upgrade projects
No company exists to use technology. The question with any technology project is “Why are we upgrading? What’s the business value?”
Overcoming technical failures and out-of-support concerns, and other such reasons, are not enough reason by themselves as addressing these concerns will usually only give you what you’ve got today but with a higher price. Hardly a compelling value proposition.
Find the business value or find another project.
2 Confused business cases
Some business case read well, make a good case for their project and give you confidence that the project is well thought through and under control (even if, at times, misfocused).
Other business cases are just a collection of data-fields that don’t tell a story or are internally inconsistent in their message.
A poor business case is a good leading indicator of a poor, confused project set up to fail. If the project team and/or Sponsor cannot clearly articulate a compelling rationale and value proposition for their project, reject it.3 System-named projects
Naming your project after the system (or vendor) immediately suggests a systems, rather than business focus. A systems focus can lose sight of 70-80% of the potential business value.
For example, a project to combine financial systems (called, “Common Financials”) identified potential benefits of $16m. By changing the perspective to the business outcomes level — improving financial management performance —benefits worth more than $40m were quickly found. The increase in delivery cost for this additional $24m in value? $1.2m (or 5% of the original project cost).4 "Mandatory" projects
Government and industry laws, and regulations can ‘require’ changes. But there is more than one choice other than ‘mandatory compliance’.
You can choose not to comply (not recommended), to just comply (minimising investment), or to exploit the need to comply to achieve additional business outcomes and maximise returns on the investment.
Too often too little thought is given to ‘mandatory’ projects. We once converted a $5m ‘mandatory’ proposal into a $30K Excel spreadsheet-based solution by asking what was the absolute minimum we needed to do to comply.
Subject any ‘Mandatory’ projects to rigorous scrutiny to find the best value solution that also aligns with your business strategy.
In summary
When allocating millions of dollars to projects it pays to thoroughly validate that they are:
- the right projects
- correctly focused
- not unnecessarily costly
- proposing the most appropriate solution
- maximizing the business value to be delivered
- and set up to succeed.
Not unreasonable requirements surely?
