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Think Tank: Show Me the Money!

When the CEO says "Show me the money", CIOs are often caught short and unable to demonstrate the value of IT projects. Here are crucial steps CIOs should take to instil a benefits management focus in their organisations and ensure that project success is judged by the value that's created.
Figure 1 – The Realisation mindset

Figure 1 – The Realisation mindset

  • Figure 1 – The Realisation mindset
  • Figure 2 – Benefits Management Process
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Recent research from The Standish Group shows that only 32 percent of IT projects are successful. Which means that the new capability is successfully “installed”. But the sad reality is that in a large number of cases this new capability is not used the way it was intended. Thus only a fraction of the desired benefits (or value) are realised. So when the CEO says, “show me the money” or the value the CIO is often caught short.

There are many reasons for this failure. There may be a lack of understanding about the true intent for the change. Competing agendas and conflicting priorities may dilute the focus. Then there is resistance from the people affected to adapt new behaviours and processes. A key reason is that organisations tend to put all the rigour and energy in the project “installation” and almost none for the benefits realisation post-installation.

Getting a sustainable ROI from IT projects requires carefully managing benefits realisation as well as managing the human aspects of the change
Instead of the “installation” focus, the modern CIO needs to adopt a “realisation” or value mindset. With a realisation focus, CIOs can ensure that project success is judged by the value created.

Executive Summary

Organisations are good at figuring out what must be done to address their business challenges and capture the opportunities. IT organisations are getting better at delivering technology capabilities to address these challenges. A lot of energy and capital is invested in developing these technology solutions. The plans appear sound. Why is it then that the outcomes fall significantly short of the original ambitions? In today’s markets, CIOs and other leaders cannot afford to spend large amounts of money and risk their reputation just deploying projects, when the success now depends on their ability to manage the change and actually getting the returns on investment (ROI).

Getting a sustainable ROI requires carefully managing benefits realisation as well as managing the human aspects of the change. The benefits management process provides the framework for blended investment programs that integrate technological change, organisational change and business process design within a common context.

The purpose of the benefits management plan is to identify and organise all activities such that the promised benefits are achieved. It consists of benefits identification, benefits planning, monitoring, realisation and review. A realisation mindset guides the entire project/ program execution. Surveys show that organisations without well-defined benefits planning processes are significantly worse at getting project ROI.

All major changes require shifts in the way people (staff, suppliers, competitors and customers) think, manage and act. These changes will not just happen by themselves. They must be planned and carefully managed. The bigger the change, the larger is the impact and the disruption and resistance to the change. If people don’t “buy-in”, the change is likely to fail. In technology enabled changes there is a tendency to focus on the technology side of the project and under-estimate the human change dimension.

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More about: Standish Group, Suncorp
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