According to the Standish Group 2018 CHAOS Report, only 36% of projects are successful, with 45% challenged and 19% failing
Customer expectations are increasing all the time, and this leaves organisations with the choice of responding to customer needs and wants, or to lead and take their customers with them on a route of shared gain.
The pressure is on organisations more than ever to drive their change agendas as effectively as possible, maximising the return on every pound invested. What does successful delivery of change look like for an organisation? Why do organisations deliver change? There are many reasons, but the primary objectives must be to drive forward the organisation’s strategy and lead to one or more of the following outcomes (but not limited to):
- Satisfied customers
- Positive return on investment
- Reduced operating costs
- Meeting regulatory requirements
Given the types of outcomes desired, why is it then that in a lot of organisations today the portfolio of change – programmes, projects, small change – is still managed out of the IT department? Why do so many organisations see change as IT’s responsibility, purely because the solutions are in the main technology based?
Let’s consider the internal mechanisms of such organisations in relation to change for a moment:
- The return on investment from any change activity is generally seen within one of the lines of business areas through, but not limited to, increased sales, increased profit per sale, reduced operating costs. The IT department is normally treated as a non-profit cost centre and does not see any addition on its budget because of change delivery.
- Annual change planning generally occurs during Quarter three. The process centres on the IT department engaging with each of the business areas, to understand what demand for change activity they have in the following year. They work through the resource profile that will be required to deliver to understand the peaks and troughs, and review and refine the plan with the business areas to drive out a ‘smoothed’ change calendar. Alongside this they work with Finance to finalise the change budget. The IT department is quite often left to make any priority calls that are often required when the budget is not sufficient to cover all the demand.
- When delivering the change activity sponsors come from the business area, however, engagement levels can be very different and often key decisions are left to the project teams (project managers, business analysts, solution architects) to make. These can be significant customer impacting decisions which are left to people who do not connect regularly to the customer base, nor are the key instigators of the change and benefits it aims to drive.
These are only three of many considerations in defining and delivering change, but already it starts to reveal the imbalances that exist in delivering a successful portfolio of change. Remember why organisations deliver change – to achieve business outcomes. None of the desired outcomes mentions a new or upgraded technology solution delivered; organisations do not invest significant funding in change to keep IT departments busy. So once more, why do so many organisations today still look to their IT department to lead their change agenda?
What does an alternative look like? Imagine an organisation (and plenty exist), where the following environment exists to set out and deliver the change agenda over a pro-longed period of time:
- The business areas who drive and deliver the organisation’s strategy and see the benefits in their P&L take accountability and ownership of the organisation’s change agenda. They work in conjunction with the Finance department to determine the level of change investment available on a rolling multi-year basis.
- The business areas are accountable for the change budget assigned to their deliverables and it is their responsibility to demonstrate the return on investment.
- The IT department and the operational areas of the organisation provide their input to determine the level of change they have the capacity to deliver and/or absorb.
- As a result, the organisation sets out its change roadmap and reviews it on a frequent basis (remember, the external environment is changing constantly so organisations need to regularly review their change plans for appropriateness).
- When programmes/projects commence, clear business sponsorship and accountability is in place and key business decisions are taken by the right people in the accountable business area.
- The IT department works together with the sponsoring business area to deliver the change, but focusing on their key skills and knowledge areas.
There are two key elements to making this change in mode of operations:
- Clear steer from the top of the organisation – change and the benefits delivered is a key organisation wide activity and plays such a significant part in delivering strategy and therefore the most senior leaders in the organisation need to be invested in making this work.
- A robust benefits realisation process with clear accountability must be in place – this is the key evidence in change performance and fully utilised, drives the behaviours during the delivery to ensure focus on the right outcomes.
What are the benefits of moving to this alternative?
The cumulative effect of this model is that the organisation is more likely to focus on strategic change, the area of the organisation that benefits from the change drives the change, decisions are made by the most appropriate people, and a much more collaborative relationship exists between business areas and the IT department.
This drives the key outcome of an increase on the return on change investment through much more effective change delivery focused on business outcomes – something all organisations strive for.
Key takeaway – while technology is an ever-increasing core component of businesses and organisations should treat their IT department as an equal internally, IT is not (unless it is a tech company) the purpose of most organisations, and cannot on its own drive the improvement in return on change desired and required.
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Disclaimer – opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer or organisation.
Author: Mike Kingston