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Taking Costs out of Business Change Projects & Programmes

With business projects in mind such as; business change, business process design/redesign and IT system implementations, the pressure to reduce project costs can – perhaps perversely it may appear, also be the opportunity to improve the results from the project – and all at lower cost.

There are several reasons why this could well be the case for your projects.

The Perils of ‘Best Practice’ project management methods
Firstly, the dominant mainstream methods for running projects (particularly, those described as ‘Best Practice’; a subject for another day) will inescapably…

  • increase your project costs
  • increase the likelihood of project failure, and…
  • will reduce the value of what is delivered to your organisation

This is a result of the shortfalls in the methods used in running projects. So we potentially have immediate scope right there to reduce costs and simultaneously improve the project’s effectiveness.

Secondly, it’s rare that a project is as accurately focused as necessary on what is really going to benefit the organisation. Because this is true for most projects, there is again immediate scope for reducing costs by through improving the focus, and simultaneously gaining greater business benefit from the project investment. Let’s start with this second aspect…

Experience of working with something of the order of 30 client projects – with clients ranging from the world’s largest multi-nationals in the UK, US and mainland Europe, to medium sized companies and small private companies; and also with public sector organisations such as UK Government departments, public sector services and the United Nations, is that they all tend to start with a project idea, rather than explicitly with the business improvement needs of their host organisation.

And that is entirely in line with the approach embedded in ‘Best Practice’ project management methods. Unfortunately, that approach rarely leads to a project that is well-formulated to address the business improvement needs of the organisation paying for the project.

What do I mean by well-formulated?

The Formulation Disconnects
What I mean is that it is quite usual to find significant ‘disconnect’ between the aims of the project manager, and the project outcomes the organisation’s managers say they need.

It is also highly probable that each individual senior manager with an interest in the project outcomes, has a different concept from their peers, of what the project is intended to achieve. A simple check with each manager, individually, will demonstrate the truth of this.

Often, expectations are misaligned to such an extent that even if all the ‘boxes are ticked’ and the project manager declares successful delivery, the organisation itself sees little of the benefit it wanted or expected in return for the time, money and resources it has spent; a case of “the operation was successful, but the patient died” syndrome.

So the immediate opportunity is to verify and tune-up the contribution the project outcomes will make to your organisation. Doing so, will eliminate the costs of working on outcomes your organisation doesn’t need, or are low priority or are peripheral, whilst also achieving a new focus on what is needed as real priorities.

The key to this is surprisingly simple. Yet this simple step is missed at the start of nearly every project.

The Key Question
The key is to ask the question “what do we want to improve?”.

More specifically, the question is “what aspects of business performance do we want to improve and/or costs reduced for our organisation?” And the question can (and should) be extended into asking; “improved by how much, and by when?”

The answers to those questions may be immediately obvious, or may need some thinking about. A hint here is to separate out the business outcomes you want, from the means to achieve those outcomes. A simple example of the separation of those two aspects would be…

  • outcomes: you want to increase the sales revenue income of your company. That’s an outcome which depends upon other conditions for it to happen, such as…
  • the means: you need to increase the number of units sold, or the number of customers, or the frequency of re-buying those units, or some combination of those

If the project is to make a contribution to the desired outcome of increased revenue, then it needs to make some contribution to the means we’ve just outlined.

A further hint – which limited space doesn’t allow to be expanded upon here, is to focus on the factors which are constraining the current performance of ‘the means’ to achieving the outcomes.

That is, what is the major pinch-point or bottleneck standing between the current performance levels, and where your organisation’s performance levels need to be? Again, for reasons that can’t be explored here, helpfully – there will only be one or two critical pinch-points or bottlenecks at any one time.

The trick is to find those, and focus the project on either making those bottlenecks wider in some way, or eliminating them to get the next step in business performance improvement.

Heresy & ‘Best Practice’
But I made some scurrilous comments earlier about project management ‘Best Practice’.

I asserted that ‘Best Practice’ will: increase project costs, increase the risk of failure and reduce the value of the outcomes your organization receives.

How can supposedly ‘Best Practice’ be the cause of the common project problems when they’re claimed to be the solution?

The short answer is that the effect of the linear, step-by-step (‘waterfall’) structure of the project life-cycle embedded in ‘Best Practice’ project management methods is…

  • to extend the elapse time (unnecessarily), from project initiation to delivery of results in the real world – which increases the development costs incurred before any business benefit is received by the organization
  • to increase the project risk because the ‘product’ – and ‘Best Practice’ tends to plan in terms of products, is only introduced into the real world, with real users and real challenges after the extended period just mentioned. In a rapidly changing world, it is vital to get real-world feedback as early as possible, on whether what you thought was going to give you the business results you want, is actually going to work as expected, or not?
  • the risk of project failure is that due to unclear expectations, the many months elapsed between initiation and delivery, what is eventually delivered no longer – if it ever did, meets the real needs of the organization. How could it? There is typically no shared, clear explicit understanding of either: what was needed, what would get you there, or how the needed results would be achieved

The longer answer, fully explaining why the project management methods taught today as ‘Best Practice’ to many thousands of project managers are fundamentally flawed – and what to do about it, is the subject of an analysis which will be published in the next few months – contact us if you would like early discussion.

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