3 pitfalls to achieving the full value of investments
A significant number of IT projects are failing to achieve full investment value, according to CEB research. Why are projects failing to achieve full value and what can the CIO do about it? Start by avoiding these three major pitfalls.
When I ask CIOs to explain the reasons behind why they think their organizations do not maximize the value of investments, I get a variety of answers. In my first post, I talked about research which shows that the majority of IT projects are not achieving their full value. Whenever I share this statistic at events, the CIOs in the room respond with a groan. The challenge is all too familiar.
We work hard to ensure that the initial investment in a new product or service will create business value. We assess the environment, take necessary measures to ensure that the solution will thrive, scale, and enable collaboration and agility. So what, exactly, are so many organizations missing? Why are projects still not achieving full value, when careful work is done up front to ensure that the investment will be successful?
There are several major pitfalls that commonly occur when an organization fails to achieve the full value of its investments. I’ve collected a few of these pitfalls from challenges that various organizations have faced, and outlined them below:
1. The problem is not fully defined
One major pitfall is choosing and implementing a solution before the problem is fully defined. Tight deadlines push leadership to implement a fix faster than they may have wanted. Conflicting direction from stakeholders and murky roadmaps only make it more difficult.
The problem is that if the foundation is not in place (a clear definition of the problem), then the rest of the pieces (the solution) will not ultimately work long term. My team hears this question all the time: “What numbers do you need from me to assess the value of this investment?” Even though it seems like a logical first step to ask which numbers to plug into the value assessment before choosing a solution, in reality, the numbers do not matter until the problem is clearly defined. What is the perceived problem? What is causing the problem? Who is impacted by the problem?
I realize this is not as simple to do as it sounds. It requires dedicated dialogue with stakeholders to discuss the problem. Sometimes there are as many different interpretations of the problem as there are stakeholders involved in the process. Defining the problem and then agreeing on its solution will take time, but it cannot be skipped if value is to be achieved throughout the project and post implementation.
2. There is no clear project plan
The second major pitfall is failing to determine a clear project plan up front. By collaborating to create a realistic and thorough roadmap, milestones in the future will enable better benchmarking and value assessment along the way. I wrote about this in my last post, where I discussed how to improve conversations about value with the executive board.
A clear project plan should include incremental assessments of value. By returning to the project plan regularly, stakeholders can assess whether the value is being met on target.
3. Infrequent feedback with stakeholders
A third pitfall is infrequent or irregular conversation with stakeholders to discuss progress.
Discussing project failure with stakeholders eight months after implementation is not a necessary conversation when a regular cadence is established from the beginning.
Unexpected setbacks will arise, but when they do, you have opportunity to discuss potential work arounds with other leaders involved. John Hoebler, in his article “How you can make your system implementation project a success,” says that “communication should be persistent, consistent, and frequent.” The same applies with value assessment – maintain regular and persistent contact with stakeholders.
Share your challenges
There are many other potential pitfalls beyond the three I’ve listed, and many of us have faced these challenges throughout our careers. In your experience, what major pitfalls have you seen? What specific challenges have you faced in achieving investment value?
Share your latest challenge related to value, and I may write a future post about it. Share your thoughts with me at email@example.com.
Chad is the president and founder of Ecosystems. For the last 15 years, Chad has led the organization, focusing on empowering the Fortune 500 to show the full value of an investment by establishing Value Management Offices (VMOs) to quantify, capture, and report on business value.
Chad's passion is to impact the lives of others. At Ecosystems, he focuses on clarifying the impact of investments on business strategy and operations. Within his community, he focuses on the impact of local organizations while serving as the Chair of the McLean Community Center Governing Board.
The opinions expressed in this blog are those of Chad Quinn and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.