Mark McDonald

Project definition is one of the central concepts in IT.  Projects form the unit work, the unit of change we deploy and often the unit of value IT creates.  Traditionally projects are defined and scoped along technical lines – what fits together for team(s) to work on.  This makes sense from IT’s need to control the work.  However, it divorces what IT does from the business.

The following post reflects collaboration with Andrew Meyer who maintains his own blog at http://alignmentinquiries.blogspot.com/

IT projects need define a combine the engineering work to be done and the results that they create.  Doing so requires more than giving the project a business based name.  Here are a few steps for an alternative way to define an IT project.

Combining these three ideas, when companies pay to execute a project, it’s not the project they want, it’s the result.  They want more revenue generating customer relationships, not processes around a CRM system or even the capability to look up customer names.  What they want is the result.

Two blog posts and marketing 101 support this idea:

First, companies don’t pay for activities, they pay for results. As explains in the blog post http://blogs.gartner.com/mark_mcdonald/2009/06/30/activities-vs-results—the-difference-makes-all-the-difference/From this post.

Second, those results come from changing capabilities which are a more powerful definition of the business. So it’s the capability people want. http://blogs.gartner.com/mark_mcdonald/2009/07/02/capability-is-more-powerful-than-process/

Finally Marketing 101, people don’t buy drills, they buy holes in walls.  It’s the hole in the wall that people want, not the drill.

Results can be defined in the following ways:

0. The business need – What is the problem or opportunity the project will address?  A clearly defined business need, provides the basis for all of the other ways of defining results.  A weakly defined need crumbles under this detailed specification.

1. Financial – How much did it cost us, what was our return on investment?  This is possibly the most terrifying question you could ask of most IT projects that is not defined in terms of its business results or its business needs.

2. Capabilities – What does this project change in terms of the way we work today that we could not do before?  It is easy to see where a project would be scoped within an individual capability in order to connect it with the way the company operates.

3. Customer Value – How does this enrich our customers experience with us enough that they want to do more business with us?  How the customer knows the project was a success is a good way of determining its operational impact.

4. Productivity Improvement – How does this decrease the amount of work our employees have to do and can we translate that into employees doing additional productive work? Peter Drucker or Michael Hammer had a maxim.  Productivity improvement needed to make people 10x more productive or it wasn’t worth the effort.  This is a standard that many are coming to understand in a way they didn’t before.

5. Engagement – How does this empower or enrich our employee’s experience enough that they embrace rather than reject the change?  This is a function of the clarity of the business need and the project’s capability focus.  Any change creates people who perceive that they are winners or losers.  If you cannot clearly describe how the project addresses real needs, then the company has the right not to be engaged.

6. Visibility – Does it give decision makers accurate visibility into what is really happening in the company?  Will the project help the sponsors and enterprise know that the need has been met, performance raised and customer value created.

7. Controls – Does it give decision makers controls to influence what happens in the company?  Projects that change things without improving or changing management practices are less likely to deliver value.  You cannot create results without being able to enable, achieve and sustain new business practices.

Results are the real test of IT’s business and operational impact.  If projects do not create results, then they are wasting resources.  Not every project will have the same level or type of results.  Some projects will not meet be able to answer these points clearly.  That does not mean they are worthless.  Rather it means that their execution focus needs to be different.  More about that in the next blog post.

Thanks to Andrew for his collaboration and insight.

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Category: CIO Leadership Tools budgets     Tags: Business Results, CIO Tools, IT management, IT Project

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