W e’ve all seen that statistic from McKinsey that 70% of transformation initiatives fail. Irrespective of what the real market or company stats are, we all know that “projects” often fail and disappoint to varying degrees, and that the fall out is painful on a personal and enterprise level.
While some organizations may point to what look like healthy project delivery stats, as measured by percentage of projects delivered to time and budget criteria, even if both budget and schedule are met, the critical ROI question is “did the ‘project’” actually deliver the business benefit results and quality expected, within the expected timeframes? This is always the key question that needs to be answered. Especially in the case of medium/large dollar value and complex projects, but the question should equally be applied at a “lite” level, to the procurement of a single or small team of management consultants or Independent Contractors (IC’s), engaged under a SOW.
How is the impact to the business and ROI being addressed for these engagements?
To answer this question, we do of course need to ask relevant questions at the outset of the planning cycle, such as:
- Why do we need this project?
- What will it deliver?
- Who are the key sponsors and stakeholders?
- What is the level of commitment (to ensure sufficient budget and to overcome potential internal barriers)?
- Who/what will it impact (technology, customers, training, hiring)?
- What resources will be required?
- What benefits will it bring?
- When will target benefits be delivered?
- What KPI’s do we need to measure to prove benefit realization and how will we do that?
For requirements graded at medium to high complexity, an understanding of expected benefits is foundational to setting a “project” up to succeed. Likewise, an understanding of the fundamental rationale for investing in a change project, as simple as it sounds, will help to successfully address the numerous elements of a program that influence success rates. At a high level these elements include: change management, stakeholder engagement, risk management, communications, and delivery strategy and project leadership capability. All are important Critical Success Factor’s (CSF) and capability weakness or under investment in any of these elements can have a profound impact on success.
Establishing correct “project” foundations is a key CSF. With accurate information in place, the “hiring manager” and procurement specialists can work together to ensure that they can provide an accurate scope of work for all third-party resources required and set out the correct commercial/contract model for the type of support required. Early stage collaboration between End User and Procurement has been recognized as a key influencer for improving outcomes and reducing project costs. Refer to Paul Vincent’s blog for more insight regarding the purchase of consultancy services.
If you would like to engage in further dialog on this topic with your peers and industry experts, join the KellyOCG and IQNavigator Community Forum on October 25, 2016 in Chicago for a healthy debate and examination of what all parties can do individually and collaboratively to change the procured services landscape for the better.