Success in your business projects? It’s a doodle.
Are you involved in a big IT project at the moment? A new billing system perhaps, or a workflow management system? Do you have a SAP or a Siebel implementation going on?
If you answered yes, you may have a problem, because you’re thinking of a business change project as an IT project, and you’re in danger of losing millions in business benefit.
You see, there’s no such thing as an IT project. IT can’t operate in isolation, nor can it deliver business value on its own.
What transforms an organisation is a business project. Of course, IT is always involved these days. But unless the IT part is integrated into all the business parts, and everything is aligned and mapped together into solid, business-value outcomes, you may be heading straight for one of those so-called IT disasters that hit the headlines with depressing regularity.
An example:
A major utility spent millions on a brilliant new ‘IT project’ to mobilize fi eld engineering. What started as a project
to increase engineering’s productivity turned into a focus on what the technology could deliver. The result was a major
expansion in the scope of the project and a shift in focus from what the business wanted, to focussing on the best technology
solution. The outcome was a system that the engineers found far too complex, time consuming and difficult to use. In fact,
what was delivered was the complete opposite of what was required!
The initial verdict across the business was that “The IT project was a failure”. Truth was, the IT part worked perfectly but the business change programme was poorly thought through. Many months and many £’s later the business change programmes caught up and now the project is seen to be working fine.
Change your outcomes by changing your thinking
Let’s say you’re thinking of implementing a billing system. Our advice is: don’t.
Instead, understand that what you’re really doing is ‘improving revenue collection outcomes’.
If you define your project this way, it becomes obvious that it must be owned by the business and have an accountable business manager at its head, who will build all the elements for success into the plan (process, organisation, people and IT). Note that IT came last.
How do you see all those elements? How do you get a handle on the ramifi cations, pitfalls and possibilities across the business?
You draw a value map.
The value map. Looks like a doodle, works like a charm.
Now, not too many business managers will have heard of a value map, let alone drawn one. So here’s an opportunity for IT
to lead the way and build value mapping into the project definition.
A value map is the shared understanding of the value drivers and their linkages across the functions in a business.
In theory this could simply be a common understanding among managers, but in practice it needs to be a diagrammatic representation of the business, the relationships between different activities, and how they create value.
Only by making it explicit, and shared, will all the players in the programme have a common understanding of the business area they are trying to improve. This is essential to make sure all the parts of the solution fi t together and perform as planned.
Without it each part of the business - sales, marketing, registrations, customer service - will operate within their own silo’s and any trade-off between departments goes unmanaged.
Let’s look at what happened as competition in energy unfolded. Door to door selling was found to be by far the most effective means of getting new customers.
Trouble was, the salespeople chose high population urban areas with greater than average debt and pre-pay installations. At the same time, the data they collected on the doorstep wasn’t accurate.
The result was a flood of unprofitable new customers and a huge amount of expensive extra processing further down the line. This continues today with departmental processes, decision-making and systems being driven in isolation across many, if not all, retail energy businesses.
The map opposite was built to understand the linkage between the various departments in a retail energy business and is being used to evaluate the money that can be made through joining up systems and data fl ows from the point of sale right through to registration and billing. The analysis reveals that millions of pounds can be saved by making sure that incorrect data never gets into the system.
Without this map it’s not possible to show how improvements in one area – data collection, for example - can be generated by using the IT solution. Without the value map the opportunity will never be seen and millions of pounds of business benefit will remain untapped.
With the map the IT department can make sure that the business value is fully appreciated to get the go ahead to proceed, and equally importantly get the business to make the process changes made needed to realise the benefits.
The end of the IT disaster
When everyone understands value mapping, IT and the business will start working together holistically and IT disasters will
become a thing of the past.
Better still, if the CIO and staff are the ones to introduce value maps to the organisation, IT will take its rightful place in the enterprise as a major enabler of business benefit.
This thought-piece is based on an IT strategy paper “The business value of IT – Dream or Nightmare” written by Peter Franklin of EnStra Energy Strategies. The full article is available on EnStra’s website www.enstra.com
