What would you do if you were Chairman of the Board?

One of the golden rules on projects is “Everything is Fine Until It’s Not.”
Large IT projects typically kick off with excitement and fanfare.  Senior executives speak at a town hall meeting to rally the troops.  Software vendor executives and consulting firm partners show up to slap backs, tell jokes and buy dinner.  The project is christened with a galvanizing name, like Project Genesis, The 2020 Project, Vision, well, you get the point.  T-Shirts are distributed to the team members.  The timeframe is 15 months, start to finish, with three months of padding built into the schedule.
Maybe you are a manufacturer implementing ERP or a hospital implementing EMR.  You could be a bank implementing an ATM upgrade or a retailer installing new point-of-sale systems.  The project was approved by the Board and your company is on the way!  Yahoo!
Three months pass.  The teams are working hard!  Discovery workshops are underway.  Hosting is being organized and your development environments are being built.  So far, you’re under budget!  Monthly burn on OpEx was supposed to be $2 million, but it is running at only $1.7 million!
Another three months pass.  No problems but there are rumblings about whether the promised functionality that your CIO used to justify the investment will work properly.  The CIO reassures the board with a slick PowerPoint and everything it rocking and rolling!  Project Optimism is on track!  The first delivery date is only one month away and the proof of concept mockups look great!
Another month passes.  The proof of concept is not quite working and the consultants don’t know why.  The software vendor is not responding in a timely manner and the CIO is at a weeklong event sponsored by a technology magazine.
The chairman of the board calls the CEO asking for an update.  The CEO texts the CIO.  “No more than a two to three week delay,” the CIO returns texts.  “We need to redo a few of the core use cases and then trial them through customer service.”
Another month passes.  The proof of concept is still not working.  Forty percent of the consultants who kicked off the project have been switched away in favor of offshore resources.  Your internal project team members are unwilling to take conference calls at 11PM with India.  Again, the CIO reassures the CEO.
Another month passes.  The new use cases do not accurately represent the needed “to-be” requirements so the CIO asks for them to be adjusted to reflect “as-is” or better said, “as-was.”  The as-was processes are the ones that were defined in the 1984 deployment of the original mainframe system.
Nine months in, the CEO sends an email to the board.  He has the courage not to hide the failure of the proof of concept.  What would you do if you were Chairman of the Board?

5 Tips to Reduce IT Project Risks & Costs

Today’s Daily News featured an update on New York City’s infamous CityTime project.  If you haven’t heard, CityTime was the Big Apple’s IT spending orgy.  It was planned as a $60 million payroll automation project, but the cost skyrocketed to $600 million.  Read about it here:  http://www.huffingtonpost.com/2011/06/20/city-time_n_880758.html

While malfeasance was at the core of this rotten apple, C-Level executives can learn from New York City’s mistakes.  Smart leaders avoid computerizing what they don’t understand or can’t envision.  They recognize that increasing complexity translates to more IT cost and risk.

Here are five tips to lower IT project cost and risk:

  1. Convert Less Data – Data conversion is messy and expensive.  Other than critical data or government mandated records, why invest in converting data that will have little value in the future?  The more data converted, the more hours spent cleansing that data.  Convert only what you need to help run the organization going forward.
  2. Test Later – Like data, testing is critical, but too much can be bad.  Too often, legions of testers will run through complex testing scripts and then a scope change negates the value of the test.  Run your tests once scope has been locked down.
  3. Avoid Vendor Boondoggles – Vendor sponsored conferences with rock stars, golf tournaments and so-called learning events are all designed to persuade IT leaders to spend more money.  Avoid these boondoggles.
  4. Say No to the Bait & Switch – Your lead consultant was just reassigned to another client, and your consulting firm’s partner tells you that the transition to his replacement will be seamless.  Negotiate for a refund for the learning curve investment your organization made in that first consultant
  5. Don’t Pay for Partner Time – When the head honcho from the vendor spends a day at your site, recognize that he’s probably there to sell you more software or services.  Check your invoice to ensure his selling time is not being billed to you.

IT projects are more likely to succeed when the scope is simple, the team is lean, and the timeframe is short.  Often a high-risk, multi-threaded complex project can be reconstructed as a sequence of linear, lower-risk short-term projects.


The CIO’s Role Is Changing

As information and the technology used to manage it explodes with ubiquity, organizations deluged with information are re-thinking how to manage the explosion.  The old role of CIO may be going by the wayside, and it is being replaced by new positions focused on turning that information explosion into value that can be harvested.  Harrah's Entertainment recently replaced its CIO with two new positions.  See Harrah's Names Tech Chiefs, Sans CIO in Information Week.  

What's striking about this bold move by Harrah's is its recognition that in today's organizations, there is too much information for one CIO to handle.  Also, tomorrow's leaders of information technology will largely be from the "use of information" camp and not the "management of technology" camp.

CIO’s Come And Go, But Challenges Remain

The CIO job is becoming too complex and undoable.  The CIO's job was appropriate before the Internet revolution reached into every portion of our work and home lives.  Technology now touches every employee, customer, and supplier, and to expect one person to coordinate all technology-related activities at an organization in unrealistic.  Look at Citibank's Marty Lippert.  According to CIO Magazine, Marty left CitiGroup after eight and a half months for personal reasons.  Contrast this with the fanfare and bold pronouncements that accompanied the announcement of Marty's hiring:

Citi CEO Vikram Pandit said the firm’s “competitiveness is dependent on having leading technology and operational capabilities" and added that Lippert’s appointment would help “orchestrate what we believe will be one of the great turnarounds in US corporate history".  These comments were published by CIO on July 8, 2008. Other noted comments in the article described Lippert's success in putting the customer first at his previous employer, and that CitiGroup was seeking to reduce its IT expenses by $1.5 Billion annually.

It doesn't take a rocket scientist to realize that it's hard to get south by going north.  Maybe Pandit should have scrapped the CIO position and hired divisional chief technology executives to cut costs while improving customer satisfaction of a per "line of business" basis.  After all, if you don't assign a CIO a doable task, it's not fair to have him resign for personal reasons when he doesn't get it done.

Accenture Admits The Truth

The headline text from a new Accenture ad featuring Tiger Woods reads as follows…

"After two decades of significant investment in IT, it's clear that greater spending doesn't necessarily deliver greater results."

Why would Accenture essentially admit that has collected money from clients without delivering in kind value?  To me, it's a sign that the pendulum is swinging from a climate in which CIO's threw massive contracts at consulting and outsourcing firms to the present time in which those same CIO's have the puniest of money to dole out.  Accenture appears to be trying to convince the readers of its ads that it is nimble, lithe, and efficient.  Will this new campaign resonate with CEO's and CFO's that spent tens of millions on ERP projects with little value realized?