Analyst Outlook: Shift your mindset for benefits realization

Flawless development and operations might be OK. But what the business really cares about is not systems, it’s payoff.

For the CIO, this creates a problem. Almost all CEOs, it seems, end up blaming their CIOs for benefit failures associated with IT projects, no matter where the fault really lies.

Failing to deliver benefits often stems from a failure to uncover all activities, assumptions and dependencies needed to make the benefits happen in the first place. Benefits also have a tendency to leak away.

The reasonable person would expect that the bigger the project, the bigger the expected benefits – so the bigger the risk of not getting them. In this instance, the reasonable person would be wrong. Instead, it is the myriad small projects that cause all the bother with benefits. It’s much easier to watch one 800-pound gorilla than it is to watch 800 one-pound monkeys.

How might benefits realization be improved? A well tested way to deliver benefits is to bake them into mainstream management processes. For example, business benefits in a business case must be baked into budgets, headcounts, scorecards and incentives.

Execution practices
Get the business ready

Most projects encounter issues of one kind or another. Some can be handled internally by the team.

But benefits realization needs a mindset shift. Using a specific problem-solving team is a breakthrough behavior that can help bring about such a shift. Separate from the teams responsible for delivering initiatives, this team is responsible for frequently reviewing all major projects, highlighting risks and issues, escalating the issues if not resolved, identifying the root causes and helping resolve the issues.

Key success behaviors in deploying problem-solving teams include: using well-rounded staff; rotating staff through the team to avoid the “us and them” syndrome; ensuring that the team is empowered to act and escalate quickly all the way to the top; ensuring that the team looks outside (at the market) as well as inside; communicating the team’s role clearly to everyone.

Harvesting practices
Ensure success

Just like a systems development lifecycle, benefits must be managed from cradle to grave. However, there is a difference. The benefits cycle starts earlier – with strategy – and goes on later than the IT development lifecycle, encompassing benefits reviews months and years after the IT system has been delivered.

These periodic benefits-focused reviews are conducted by a harvesting steering group. The membership and mentality of this steering group is key.

Most enterprises implement some kind of review when an IT implementation phase of a project is complete. A harvesting steering committee is a very different animal. Gone is the cursory and collaborative review, replaced instead by a more adversarial process. Gone is the project manager as chair, replaced, as one CIO described, by “the enforcer”: the CFO that just wanted to see his money.

Attendance is gingered up too. It includes all key stakeholder groups, including business sponsor, users, IS delivery team, change and program management team and IS operations. The focus is on the question of whether the business reaped the expected benefits, not whether the IT piece of the puzzle completed on time.

In a practical sense, these harvesting steering committees can be evolved out of the more normal project governance groups. Rather than the project steering group being disbanded once IS solutions are delivered and business change is complete, this group can be changed into the harvesting steering group. Typically this group would include the business sponsor, key internal customers, CFO representation, and IS development and operations staff.

From the CIO’s perspective, the involvement of IS in driving improvements in benefits realization has a triple payoff. Firstly, if the improvements are successful, business benefits delivered are higher. Secondly, IS credibility increases. And lastly, involvement in the harvesting phase extends the opportunity for the IS organization to learn and improve.

Quicklink: 064678

Andrew Rowsell-Jones is vice president and research director for Gartner’s CIO Executive Programs.

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