What's It Worth?

It is one thing branding a project that was supposed to cost $100,000 a failure if it ultimately costs $200,000, but what if the final product is worth $1 million, or even $10 million? Not only will this drastically alter any assessments of product success, but it should also influence how the organization runs the project, says John Thorp, vice president in the Strategic Consulting Practice at Fujitsu Consulting in Canada and author of The Information Paradox (revised 2003).

Thorp thinks too many organizations still suffer from "silver bullet thinking", with executives who still believe you can just plug in the technology and watch the benefits flow. In other words, as has been repeated with monotonous regularity, project management failures are a management, not a technical problem.

"If we are to understand, and more importantly fix this problem, it is important to step back and think about what success would look like," he says. "Several years ago, I asked a number of senior project managers of a very large US organization how they defined a successful IT project. The answers included on time, on budget, delivering the expected functionality and 'getting out with my skin intact'. 'Wrong,' I told them. 'A successful project is one that results in benefit to the organization.' But the simple fact is that none of them had ever been asked to think like this."

It is not that bringing projects in as specified, on time and on budget, is unimportant, Thorp says. It is that it is necessary but not sufficient. Organizations must not only manage the delivery process but also the benefits realization process. That means understanding the results that the business expects and the way the project will contribute to these results as well as other changes the business will have to make in order to achieve the results.

In a world of much higher project development complexity, he says, traditional project management will not do. Organizations must adopt a new approach focused on realizing the benefits of investments in IT-enabled change.

"The adoption of such a benefits realization approach has become a business imperative, and requires fundamental shifts in management mind-sets," he wrote in The Information Paradox. "Organizations must shift beyond managing technology projects in isolation to managing business programs. Programs clearly focused on business benefits, including organizational, process and people change projects in addition to technology projects. They must elevate decision making from the technology level to the business level, and from the business 'silo' view to the enterprise view. Multiple business programs need to be evaluated, the best ones chosen and then managed as a portfolio of programs. Finally, they must recognize that decision making is not a one-time event. Programs must be proactively managed through to the full delivery of value."