Everyone loves a good fantasy story. Some of the best revenue gains at the theater box office were on movies in this genre. The populace desires to believe things will turn out the way we want them to and all live happily ever after. In our popular consciousness are stories as Beauty and the Beast, and Cinderella - who went from poverty to riches.
In the landscape of business projects, with the significance of a business’s goals and capital on the line, one would think that decisions to execute business projects are based on deliberate business case evaluation with reality of facts and the necessary involvement of those that will lead, support and deliver the determined value - since a business case is always done to evaluate the business initiative before approving the expenditure.
So then why is it, recent surveys have shown that nearly 50 % of significant business projects such as ERP fail to achieve even half of the planned business benefits? Why does this happen? What are the keys to realizing the business case so to gain a richer return on business projects?
Here’s how we have seen it happen and 3 keys to value:
A company is considering a new business system initiative, such as implementing a new ERP system or module. They’ve done some learning about the system functionality and its benefits, and they think that it can achieve a certain set of desired benefits for their organization.
The company then brings in another party to assist with a business case and shares with them their objectives and expectations for this business system project. What could be the problem at this point? In some cases, the company’s vision for how much the initiative will improve their organization may not be realistic. It may be overly optimistic, and to be brutally honest, in some ways it could have elements of fantasy. Yet they are already setting stakes in the ground for what it will achieve so to move forward with the initiative, even though full discovery is not yet done to fully understand the full efforts and costs necessary to achieve whatever benefits are possible.
Compounding the situation is that the party brought in to assist with the business case may feel pressured to work into the overall case narrative the stakes already put down. It takes necessary courage and right commitment to appropriately bring out facts that may be contrary to predetermined expectations. Instead, sometimes elements are allowed to live on in the business case to a greater or lesser degree in various areas with numbers feeding into expected benefits that could potentially not be realized.
Finally, another major error in this scenario could be that after a business case is done and a decision made to move forward, the business case is set aside and not referred to again for updating and guidance as an important touchstone in the project as the “fog of war” envelops the project war room and costs increase and benefits forgotten while making the push to meet dates for completion.
What does this overall scenario ultimately cause?.. A reality where there is potentially more beast than there is beauty in the business project. Why are such mistakes made?
Perhaps it’s advantageous to a party or the path of least resistance not to speak up and declare the good, the bad and the ugly, so a business case results that is too high-level or riddled with assumptions; or it could be at times the full business case story is endeavored to be described, but influential stakeholders within an organization want a business case to justify “their” project. They may have ambitions for the study they want realized. So it can be like the ancient Asian proverb of the Three Wise Monkeys popularized in a 17th century carving over a door of the famous Toshho-gu shrine in Japan. They sit in a row, one with his ears covered, one with his mouth covered and the third with his eyes covered, the embodiment of the saying, “see no evil, hear no evil, speak no evil”.
So such as this could be impetus for the high percentage of business projects failing to achieve half of the planned business benefits since they included fiction with fact when the organization green lighted the project. How can we prevent this from happening? What are keys to realizing the value in the business case for a business initiative?
We know that a business case is always done, with a methodology including risk analysis and financial and non-financial benefits analysis to ascertain a return on investment. But there is also a need of ownership and accountability, with dynamic monitoring and measurement that answers the questions of - will we get these benefits? ...and who will follow up and see to it? Or unfortunately otherwise, fiction and loss of value may come into play.
Here are 3 Guiding Practices for Realizing Project Business Case Benefits:
1. Ensure the engagement of all necessary stakeholders. The project business case evaluation should ensure engagement of all stakeholders, from executive sponsorship and senior management to project management and business process area owners. So that business case values, measurements and assumptions are factually robust and vetted. Beware of business cases that have selective input and never have the input and validation of all the necessary business area process owners who will be the ones that make the project a successful reality where the rubber meets the road and will know if the value is truly being realized.
2. Assign appropriate accountability of the business benefits so that in delivery of the business project the benefits are realized due to their ownership. The business value outcomes should be fully scoped and described early on including who is the benefit owner responsible for delivering and tracking its realization from the business initiative. Beware of too many “assumptions” and “generalizations” that can be a result of not enough leg work put in within the organization to vet and also a desire for incognito ownership – be specific.
3. Manage business project investments through their full economic life from inception to retirement with the benefit delivery dynamically monitored, evaluated and improved so that the expected value is realized. Beware of a business case that is developed and initially reviewed to determine whether to move forward and then set aside or only revisited in a post-implementation review. Instead it should be utilized as an operational tool that is continually monitored and updated throughout the economic life cycle of the investment so to support not only the implementation but as well the on-going benefits realization.
We observed a good example of business case stewardship and accountability during one business transformation program where there was a distinct business case team and work stream included in the program as well, which worked appropriately with the business benefit owners in the other program work streams and reported out on the comprehensive business case. This facilitated an organic business case living up to transformative benefit expectations.
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