Business Case Scoring – Template

Just wanted to share this quick business case scoring template.

 

In evaluating various business cases, individuals can score each based on the following:

– Business Justification

– Analysis of Alternatives

– Technical Alignment

– Feasibility of Implementation Strategy

– Funding/Resource Availability

The ratings are done with 1 being the lowest and 5 being the highest. 

The scoring sheet calculate average, and identifies highest and lowest scores.

Then the individual scores can be summarized and used to rank the projects in your portfolio. 

Based on overall funding, you can determine how many of the top-ranked projects are doable in the year, and then roll over the others for reevaluation along with new business cases next go around. 

Capisce? 😉

(Credit Graphic: Andy Blumenthal)

What Are The Chances for IT Project Success?

So I was teaching a class in Enterprise Architecture and IT Governance this week. 

In one of the class exercises, one of the students presented something like this bell-shaped distribution curve in explaining a business case for an IT Project. 

The student took a nice business approach and utilized a bell-shaped curve distribution to explain to his executives the pros and cons of a project. 

Basically, depending on the projects success, the middle (1-2 standard deviations, between 68-95% chance), the project will yield a moderate level of efficiencies and cost-savings or not. 

Beyond that:

– To the left are the downside risks for significant losses–project failure, creating dysfunction, increased costs, and operational risks to the mission/business. 

– To the right is the upside potential for big gains–innovations, major process reengineering, automation gains, and competitive advantages. 

This curve is probably a fairly accurate representation based on the high IT project failure rate in most organizations (whether they want to admit it or not). 

I believe that with:

– More user-centric enterprise architecture planning on the front-end

– Better IT governance throughout

– Agile development and scrum management in execution 

that we can achieve ever higher project success rates along the big upside potential that comes with it!  

We still have a way to go to improve, but the bell-curve helps explains what organizations are most of the time getting from their investments. 😉

(Source Graphic: Adapted by Andy Blumenthal from here)

Technology and Human Capital–They Go Hand-In-Hand

So there are some mighty impressive places to work that really shine in terms of the technology they use and the constant desire to upgrade and improve their capabilities. 

Usually, these are also the places that value and respect their human capital because they view them as not just human pawns, but rather as strategic drivers of change. 

Then there are the places that are “so operationally focused” or just plain poorly run that they can’t be bothered to think about technology much at all or the people that make up the organization and its fiber. 

In many cases, the wheel may be turning, but the hamster is dead: 

There is no real enterprise architecture to speak of. 

There are no IT strategic or operational plans. 

There are no enterprise or common solutions or platforms. 

There is no IT governance or project/portfolio management. 

Even where there are some IT projects, they go nowhere–they are notions or discussion pieces, but nothing ever rolls off the IT “assembly line.”

How about buying an $800 software package to improve specific operations–that gets the thumbs down too. 

Many of these executives can’t even spell t-e-c-h-n-o-l-o-g-y!

It’s scary when technology is such an incredible enabler that some can’t see it for what it is. 

Rather to them, technology is a distraction, a threat, a burdensome cost, or something we don’t have time for.

Are they scared of technology?

Do they just not understand its criticality or capability?

Are they just plain stupid? 

Anyway, organizations need to look at their leadership and ask what are they doing not only operationally, but also in terms of technology improvement to advance the organization and its mission. 

Look to the organizations that lead technologically, as well as that treat their people well, and those are ones to ogle at and model after.  😉

(Source Photo: Andy Blumenthal)

Can’t Live With Them, Can’t Live Without Them

I remember years ago, my father used to joke about my mother (who occasionally got on his nerves :-): “you can’t live with them, and you can’t live without them.”Following the frequently dismal state of IT project performance generally, I’m beginning to think that way about technology projects.On one hand, technology represents innovation, automation, and the latest advances in engineering and science–and we cannot live without it–it is our future!On the other hand, the continuing poor track record of IT project delivery is such that we cannot live with it–they are often highly risky and costly:

• In 2009, the Standish Group reported that 68% of IT projects were failing or seriously challenged–over schedule, behind budget, and not meeting customer requirements.
• Most recently, according to Harvard Business Review (September 2011), IT projects are again highlighted as “riskier than you think.” Despite efforts to rein in IT projects, “New research showssurprisingly high numbers of out-of-control tech projects–ones that can sink entire companies and careers.”
• Numerous high profile companies with such deeply problematic IT projects are mentioned, including: Levi Strauss, Hershey’s, Kmart, Airbus, and more.
• The study found that “Fully one in six of the projects we studied [1,471 were examined] was a black swan, with a cost overrun of 200% on average, and a schedule overrun of almost 70%.”
• In other words there is a “fat tail” to IT project failure. “It’s not that they’re particularly prone to high cost overruns on average…[rather]anunusually large proportion of them incur massive overages–that is, there are a disproportionate number of black swans.”
• Unfortunately, as the authors state: “these numbers seems comfortably improbable, but…they apply with uncomfortable frequency.”

In recent years, the discipline of project management and the technique of earned value management have been in vogue to better manage and control runaway IT projects.

At the federal government level, implementation of such tools as the Federal IT Dashboard for transparency and TechStats for ensuring accountability have course-corrected or terminated more than $3 billion in underperforming IT projects.

Technology projects, as R&D endeavors, come with inherent risk. Yet even if the technical aspect is successful, the human factors are likely to get in the way. In fact, they may be the ultimate IT “project killers”–organizational politics, technology adoption, change management, knowledge management, etc.

Going forward, I see the solution as two-pronged:

• On the one hand we must focus on enhancing pure project management, performance measurement, architecture and governance, and so on.
• At the same time, we also need to add more emphasis on people (our human capital)—ensuring that everyone is fully trained, motivated, empowered and has ownership. This is challenging considering that our people are very much at a breaking point with all the work-related stress they are facing.

These days organizations face numerous challenges that can be daunting. These range from the rapid pace of change, the cutthroat global competition at our doorsteps, a failing education system, spiraling high unemployment, and mounting deficits. All can be helped through technology, but for this to happen we must have the project management infrastructure and the human factors in place to make it work.If our technology is to bring us the next great breakthrough, we must help our people to deliver it collaboratively.The pressure is on–we can’t live with it and we cannot live without it. IT project failures are a people problem as much as a technology problem. However, once we confront it as such, I believe that we can expect the metrics on failed IT projects to change significantly to success.(Source Photo: here)

>TechStat For Managing IT Investments

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TechStat is a governance model to “turn around or terminate” underperforming projects in the IT portfolio.

This is one of the key tenets in the 25-Point Implementation Plan to Reform Federal IT.

The training video (above) is an introduction to the TechStat model.

The goal is improved IT investment management and accountability for IT programs.

More information on TechStat, and in particular the toolkit for implementation, is available at the Federal CIO website.

>Toward A Federal Enterprise Architecture Board

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A Federal Enterprise Architecture Board (FEAB) would provide “teeth” to further implementing enterprise architecture across government.

We have a Federal Enterprise Architecture (FEA) that provides a government wide framework for architecture strategy and planning, but we do not have a FEA Board to govern the subsequent IT investments through capital planning and investment control (CPIC). CPIC is the governance process whereby we select, control, and evaluate new IT investments.

Interestingly, The Federal CIO Council’s Architecture Alignment and Assessment Guide (October 2000) specifically calls for complementary EA and CPIC functions (see graphics).

In this paradigm, the enterprise architecture (EA) informs, guides, drives the CPIC, and in turn the decisions from the CPIC governance process updates the EA planning, so that the EA and CPIC processes are seen as mutually supportive.

In the federal government, we have departmental and agency architectures and boards that serve to plan and govern IT investments at their respective levels. However, as we seek to build greater standardization, interoperability, and reuse across government with IT initiatives that cut across traditional government boundaries driven and guided by the Federal CIO and Federal CIO Council, there is a need for a FEAB to review new and major changes to IT investments.

There would be many purposes for the FEAB.

• Strategic alignment: One would be to ensure strategic alignment not to any single department or agency mission, but rather to the greater federal government strategy and policy. Some examples of this would be data center consolidation, green IT, open government, and more.
• Streamlining of investments: Additionally, the FEAB would assess IT investments to ensure that there is no overlap or opportunities for consolidation of initiatives. OMB performs some of this function today, but a FEAB would augment their capability with IT subject matter experts from across the government.
• Other key benefits: Of course, the FEAB would also look at things like return on investment measures, risk mitigation plans, technical compliance to federal architecture standards and mandates (security, privacy, records, FOIA, Section 508, etc.).

The FEAB would not be a substitute for the EA Boards that provide oversight functions at the department and agency levels, but would provide governance for the largest and riskiest IT initiatives and those that cut across different agencies.

While the OMB currently assesses IT investments using Exhibits 300s and 53s, which include EA assessment questions, the FEAB would provide a governance board made up of cross-cutting governmental IT subject matter experts to vet these business cases from an EA perspective thoroughly and provide recommendations to the Federal CIO Council and the OMB on approval or denial. Therefore, and not unimportantly, the stand-up of a FEAB would add an important human factor to the Federal Enterprise Architecture and make it “real.”

Of course, with a portfolio of some 10,000 IT systems, the FEAB would not be able to govern every new Federal IT investment. Therefore, it would be critical to establish thresholds that would be practical for implementation.

I would envision the FEAB being chaired by the Federal Architect and the board being a recommendation body to the Federal CIO Council and the Office of Management and Budget, Executive Office of the President.

Critical initiatives by Federal CIO Vivek Kundra to effectively manage (i.e. CPIC control phase) IT investments through the Federal IT Dashboard and TechStat sessions would be augmented by the FEAB work to carefully recommend for selection (i.e. CPIC select phase) new federal IT investments.

Together, I see the federal select and control mechanisms of CPIC functioning in harmony to enhance governments IT planning, investment decision-making, and execution. Essentially, the FEA (architecture) and FEAB (governance) on the “front-end” will guide new IT investments, and the IT Dashboard and TechStat sessions on the “back-end” will ensure IT investments are properly progressing for the taxpayer based on cost, schedule, and performance measures.

In summary, the Federal Enterprise Architecture Board would be the governance arm of the Federal Enterprise Architecture, and serve as a support to the IT leadership of the Federal CIO, the Federal CIO Council, and the IT budgetary functions performed by the Office of Management and Budget.

>Listening to Each Other to Succeed as a Team

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There is an oft-cited best practice for conflict resolution called the speaker-listener technique—in which the speaker explains their position and the listener repeats back to the speaker what he heard him say. Then the speaker and listener switch roles.

After both sides have had a chance to express themselves, and the other side has repeated what they heard, both parties are ready to resolve their differences with greater understanding of each other.

The Wall Street Journal, 27 July 2010, in an article called “Fighting Happily Ever After” promotes the speaker-listener technique for improving couples communications and making happier, longer-lasting relationships.

I believe that the speaker-listener technique works not only because it improves the actual information flow and understanding between people, but also because it improves the perception that people have towards each other—from being adversarial to being collaborative.

In the sheer act of reaching out to others through genuine listening and understanding, we establish the trust of the other person that we want to work toward a win-win solution, as opposed to a clobber the other guy with what you want to do, and go home victorious.

In contrast, think of how many times people don’t really talk with each other, but rather at each other. When this occurs, there is very little true interaction of the parties—instead it is a dump by one on the other. This is particularly of concern to an organization when the speaker is in a position of authority and the listener has legitimate concerns that don’t get heard or taken seriously.

For example, when the boss (as speaker) “orders” his/her employees to action instead of engaging and discussing with them, the employees (as listener) may never really understand why they are being asked to perform as told (what the plan is) or even permitted to discuss how best they can proceed (what the governance is).

Here, there is no real two-way engagement. Rather, workers are related to by their superiors as automatons or chess pieces rather than as true value-add people to the mission/organization.

In the end, it is not very fulfilling for either party—more than that when it comes to architecture, governance, and execution, we frequently end up with lousy plans, decisions, and poorly performing investments.

Instead, think about the potential when employers and employees work together as a team to solve problems. With leaders facilitating strategic discussions and engaging with their staffs in open dialogue to innovate and seeking everyone’s input, ideas, reactions. Here employees not only know the plan and understand it, but are part of its development. Further, people are not just told what to do, but they can suggest “from the front lines” what needs to be done and work with others from a governance model on where this fits in the larger organizational context.

Speaking—listening—and understating each other is the essence of good conflict management and of treating people with decency and respect. Moreover, it is not just for couple relationship building, but also for developing strong organizational bonds and successfully planning and execution.

To me, creating a framework for conflict resolution and improved communication is an important part of what good enterprise architecture and IT governance is all about in the organization. Yet we don’t often talk about these human factors in technology settings. Rather the focus is on the end state, the tool, the more impersonal technical aspects of IT implementation and compliance.

Good architecture and governance processes help to remedy this a bit:

With architecture—we work together to articulate a strategic roadmap for the organization; this provides the goals, objectives, initiatives, and milestones that we work towards in concert.

With governance—we listen to each other and understand new requirements, their strategic alignment, return on investment, and the portfolio management of them. We listen, we discuss, we understand, and we make IT investment decisions accordingly.

Nevertheless, at this time the focus in IT is still heavily weighted toward operations. Research on IT employee morale shows that we need to better incorporate and mature our human capital management practices. We need to improve how we speak with, listen to and build understanding of others not only because that is the right thing to do, but because that will enable us to achieve better end results.

>Newer Isn’t Always Better

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I love new technology as much or more than the next guy, but…

Last month, I came across an article in USA Today called “Army Ditches Velcro For Buttons,” which chronicles how after deploying high-tech, “space-age Velcro” in uniforms in 2004, the Army found that the good old button worked better on keeping pants packets closed. The Army is now substituting three buttons for Velcro on the cargo pockets of its pants to keep them from opening up and spilling out.

To me, the point is not whether we use new, newer, or even the newest technology out there (like space-age Velcro), but whether we are right-fitting the technology to our organization (in this case, the button met the needs of the soldier better).

I’m sure you may have noticed, as have I that certain technology enthusiasts like, want and literally crave the “latest and greatest” technology gizmos and gadgets, whether they fully work yet or not.

These enthusiasts are often the first to download a new (still buggy) app and the ones that line up (often bringing their own lounge chairs) the night before a new iPhone or other “hot” consumer technology product goes to market.

Similar, and perhaps well-intentioned, enthusiasm for new technology can end up in pushing new technologies before the organization is ready for them (in terms of maturity, adoption, change, priorities, etc.). In other cases, newer technologies may be launched even before the “ink is dried” on IT purchases already made (i.e. the technologies bought are not yet implemented and there has been no return on investment achieved!).

At the extreme, organizations may find themselves with proverbial IT storage closets full of still shrink-wrapped boxes of software and crates of unopened IT hardware and still not be deterred from making another purchase and another and another…

I remember in graduate school learning about shopaholics and those so addicted to consumerism that their behavior bordered on the abnormal according to the Bible of psychiatry, the Diagnostic Statistical Manual (DSM).

This behavior is in sharp contrast with organizations that are disciplined with technology and strong stewards with their organization’s investment dollars—they tend to follow a well-thought-out plan and a structured governance process to ensure that money is well-spent on IT—i.e. it is requirements-driven, strategically aligned, ROI-based, and technologically compliant with the architecture.

In such organizations, responsibility and accountability for IT investments go hand-in-hand, so that success is not measured by whether new technologies get identified and investments “go through,” but rather by how beneficial a technology is for the end-user in doing their jobs and how quickly it actually gets successfully implemented.

This latter organization model is the more mature one and the one that we need to emulate in terms of their architecture and governance. Like the Army, these organizations will chose the old fashioned button over the newer Velcro when it suits the soldier better and will even come out saving 96 cents per uniform.

New technology is great–the key is to be flexible and strategic about when it is needed and when it is not.

>We Can’t Ignore or Fear Technology For Long

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New Article by Andy Blumenthal in Architecture and Governance Magazine (April 2010)

http://tinyurl.com/y3xgrlb

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When it comes to new technology, first comes ignorance, then comes fear, then comes the embrace and rush to the IT department to make it happen—now!

This scenario plays out again and again in organizations—there are three key phases to technology adoption.

Ignorance—people are unaware, misinformed, or just don’t understand the potential that a new technology holds. In some cases, it’s because they generally haven’t been exposed to the technology, in other cases, it is because they are going forward with eyes wide-shut (what they don’t know can’t harm them or so they think).

Fear—OMG. A new technology; I can’t deal with this. “I’m used to doing it X way.” “Why do we have to change.” “I can’t learn this new technology.” There is fear of something new, of change, of the unknown.

Embrace—The acknowledgement that a new technology is important to the organization; that it can’t be ignored; that it isn’t going away; that the competitors are already getting onboard. Oh uh. Get the CIO in here. We need this technology, now! Where are we going to find finding for it this year (or quarter, whatever). We need to reprioritize our IT projects, so this is at the top (or near it). Let’s get everyone right on this. Can we meet early this week?

I read an interesting article in Public CIO magazine (January 2010) called “A Mile Wide And An Inch Deep,” about how social media is becoming pervasive in government.

In the article it states: “Last year, a Public CIO reader survey found that social media didn’t make the list of the top 10 technology priorities for 2009. Today, it’s become the No. 1 topic among public CIOs.”

In between not making the top 10 technology list and becoming No. 1, social media was vilified as being something that would make the organization lose control of its message, that was a security risk, and that was a colossal waste of employees’ time and should be banned (or blocked and it was by 40% of organizations).

As the pace of technology innovation increases, the lifecycle of adoption has also rapidly advanced. For example, with social media, we went from ignorance to fear to the embrace in one year flat!

Chris Curran, chief technology officer for Diamond Management and Technology Consultants Inc., is quoted in the article as stating:

“If you rewind to 1995, the attitude back then was, “No Internet use at work.” Then it became, “No Internet shopping during work hours.” But over time, the issue just went away, because a majority of employees are good people, hardworking and productive. Some people are going to do stupid things whether they have access to social networking or not. But it doesn’t make sense to ignore a social trend that is bigger than your organization.”

You can’t ignore important new technologies or let fear get the better of you. At one time, people were saying oh no we can’t change from paper communications to email. We need everything hardcopy. And that changed. Now email is the norm or should I say was the norm, because social computing for the younger generation is becoming the new email.

The answer for IT leaders to advance organizational adoption of valuable new technologies is to:

· Create awareness and understanding of new technologies—the benefits and the risks (and how they will be mitigated).

· Establish sound planning and IT governance processes for capturing business requirements and aligning new technologies to best meet these.

· Provide new technologies coupled with ample communications and training to ensure that the technologies are not just more shelfware, but that they are readily adopted and fulfill their potential in the organization to advance the mission and productivity.

The phases of technology adoption: Ignorance, fear, and embrace are not abnormal or bad; they are human. And as people, we must have time to recognize and adjust to change. You can’t force technology down people’s throats (proverbially speaking) and you can’t command organizational readiness and poof, there it is. But rather, as IT leaders, we need to be sensitive to where people and organizations are at on the adoption lifecycle and help to identify those emerging technologies with genuine net benefits that can’t be ignored or feared—they must be embraced and the sooner the better for the organization, its people, and all its stakeholders.

>Strategic Decision Making Trumps The Alternative

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A strategist frequently has to temper the desire for structured planning and strategic decision making with the reality of organizational life, which includes:

· Organizational politics (who has the power today to get their way).

· Subjective management whims (I think, I believe, I feel, but mainly I want—regardless of objective facts).

· Situational knee-jerk reactions (due to something that broke, a mandate that came down, an audit that was failed, and so on)

· People with some cash to throw around (they have $ and “its burning a hole in their pockets” or can anyone say “spend-down”?).

The result though of abandoning strategic decision-making is that IT investment decisions will be sub-optimal and maybe even big losers—some examples includes:

· Investment “shelfware” (the seals on the packages of the software or hardware may never even get broken)

· Redundant technologies (that drain limited resources to operate and maintain them)

· Systems that are obsolete by the time they make it into production (because they were a bad idea to begin with)

· Failed IT projects galore (because they never had true organizational commitment and for the right reasons)

Why does strategic decision-making help avoid bad organizational investments?

1) Having a vision, a plan, and an enterprise architecture trumps ping-pong balling around in the firefight of the day, because the first is goal-oriented—linear and directed, and the second is issue-oriented—dictated by the problem du-jour, and generally leads to nowhere in particular.

2) Having a structured governance process with analysis of alternatives and well-thought out and transparent criteria, weightings, and rankings trumps throwing an investment dart into the dark and hoping that it hits a project with a real payoff.

3) Taking a strategic view driven by positive long-term outcomes for the organization trumps an operational view driven by short-term results for the individual.

4) Taking an enterprise solutions view that seeks sharing and economies of scale trumps an instance-by-instance approach, which results in gaps, redundancies, inefficiencies, and systems that can’t talk with each other.

5) Taking an organization view where information sharing and horizontal collaboration result in people working together for the greater organizational good, trumps functional views (vertical silos) where information is hoarded and the “us versus them attitude,” results in continuous power struggles over scare resources and decisions that benefits individuals or groups at the expense of the organization as a whole.

Certainly, we cannot expect that all decisions will be made under optimal conditions and follow “all the rules.” However, as leaders we must create the organizational structures, policies, processes, and clear roles and responsibilities to foster strategic decision-making versus a continued firefighting approach.

Understanding that organizations and people are imperfect and that we need to balance many competing interests from many stakeholders does not obviate the need to create the conditions for sounder decision-making and better organizational results. This is an IT leader’s mandate for driving organizational excellence.

While we will never completely get rid of the politics and other sideline influences on how we make our investments, we can mitigate them through a process-driven organization approach that is based on a healthy dose of planning and governance. The pressure to give in to the daily crisis and catfight can be great that is why we need organizational structures to hold the line.