Tuesday, September 10, 2013

Effective Reasons Transformation Programs

A 2011 study was published by the UK government that showed 1,471 programs that averaged $167m in budget, with an average overspend of 27%. Therefore over $65 billion was committed to programs that had hit significant problems. The worst part was, one in six overspent by over 200% and went over time by 70%.
So what were the clear lessons from such a series of debacles, how can we identify the risks and then minimise their impact?

1. Methodology

How many times have you seen program or project specifications that require skills in lean, Six Sigma, Agile or another form of business school approach? The trouble is, these are not one size fits all solutions, despite their supporters.

In fact, the larger the program, the less likely they are to succeed. Why? Because the layers within such a program require an inherent form of elasticity in their management. It's not all about cost.

2. Complexity

The larger the program, the more the number of stakeholders, participants and suppliers. The more the systems employed by such parties, the more the communication becomes difficult.

Programs affect other people, processes and systems whilst creating their own. The impact of these new approaches can result in collateral effect. Another side of the issue is that large programs take time, people have careers to progress and it's not always possible to lock the same people in to deliver the end as the beginning.

3. Technology

Many programs are about upgrading technology whether it's machinery, information technology or information systems. Many companies still maintain old software because they know how it works and that the bugs have generally been worked out.

Building new systems requires a hitherto untested level of interoperability and whilst everyone is concerned about security, that can be threatened through server downtime whilst data is migrated, servers are upgraded, for example.

4. Governance

Embedding robust governance is believed to be the cornerstone of any successful program and, whilst it is certainly effective, changes or refinements can exacerbate the struggles that the program may be facing.

5. Quality Assurance

The standards achieved by a program are difficult to estimate accurately at the beginning, despite best wishes. This is not an excuse to let standards slide, more that an acknowledgement of the potential inaccuracy of the requirements aids the planning process.

6. Time

As programs progress, conditions can change, whether it's the market, technology or the other areas of the business. Clinging on to a failed program, come what may, or prolonging its life beyond a prudent business decision can sometimes be merely a matter of pride or ignorance.

7. The Budget

Although funds are allocated, they are often based on estimates, no matter how scientifically reached. These can be affected by a number of factors outside the control of the program and, as time goes by, it is likely that these factors will increase in number. For example, international supply chain restructures can always struggle in times of changing exchange rates over a protracted period.

What can you do?

Despite numerous books and treatises on successful management, flexibility is not a promoted approach. It veers away from the certainty that decision makers can crave, it flies in the face of the claims of many leaders and yet it is the single greatest tool anyone can bring to a planning process.

Secondly, it is vital to approach the programs in stages. Planning for discrete stages with quantifiable benefits and agreed gateways will assist in embedding a culture of commitment and also a tool to monitor the genuine benefits.

It's never easy, but planning with flexibility and approaching such challenges in a staged process is key to reducing some of the all too present risks in running large programs.

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