FAQs

Quality Business Solutions
Raising The Bar In Information Technology Consulting and Project Leadership

Phone: 425.260.2416 E-mail: info@qualitybusinesssolutions.net

The Quality Advantage April 2009
A Customer Newsletter Focusing On Business Strategy, Organization, Operational Improvements and Technology

"WITH KNOWLEDGE COMES ADVANTAGE"

Software Selection (and Implementation) Failure

You’ve probably already read about recent large-scale software implementation failures and their costs to companies:
More than $33 million lost, as a project goes over budget and time. In excess of $54 million spent, and the project cancelled before completion. Revenue loss of $100 million, as the new software fails to successfully integrate with the old.

These are just some examples—Global averages are often difficult to accurately determine due to companies’ reluctance to publicize failed projects. Or maybe you’ve already come across the startling statistic that between 62 and 68 percent of software selection projects are unlikely to deliver a successful outcome. “Companies might be successful,” states Gary White in WMC Consulting’s recent Business Analysis Survey: The Impact of Business Requirements on the Success of Technology Projects, “but not by design.” Is the success of a software selection and implementation project really nothing more than a happy accident, and almost completely beyond your ability to control it?

Why is the rate of failure so high?
One main factor I have observed is that the less-than-inspiring rates of success noted previously often boils down to the organization’s current experience and historical success with larger-scale implementations involving complex functionality. In other words, the success of a software selection and implementation project depends on whether your current internal resources are sufficiently skilled and experienced to define your organizational needs. However, upwards of 60 percent of companies fail to consider that completing a project on time and within budget means nothing if the software itself doesn’t meet the needs of the organization.

Software Selection Success or Failure: Dangerous Metrics
But in addition to considering your internal resources, it’s important to realize that the probability of success also depends on how you define success. Organizations often employ “fuzzy thinking” to determine the metrics that define a successful software implementation project. Companies have a tendency to use three common metrics: if the project was completed within a scheduled time frame and within budget, and brings the full-spectrum of new functionality to help automate processes and improve efficiency, then the project is deemed a success.
Let’s look at why time, budget, and functionality aren’t the only metrics you need to consider, and why choosing and implementing a software solution might be more complicated than it seems at first glance.

• Time: “Short-cuts” can be very expensive in the long (or even short) run. For instance, many organizations elect to shave time from the painstaking requirements-gathering process. But if you discover, after implementation, that crucial functionality is lacking, you’ll need to spend additional time and effort to work around the deficiencies.
• Budget: You may be tempted to cut back on certain expenses to bring your project in under budget—but, as an example, shrinking your budget for training staff means the software may not be used efficiently as staff members struggle to learn how to use it themselves-- on your dollar.
• Functionality: Even if a software package offers comprehensive functionality, there’s no guarantee it’s exactly what your organization needs (full-featured doesn’t necessarily mean “best”). The only way to properly rank your functional requirements is to define them—before you even start choosing a solution.

Time, budget, and functionality are important considerations, but they shouldn’t be used as the only measures of a successful project. And even if you meet all of them, your project isn’t a guaranteed success. The real measure of success is whether or not the software you implement meets your business requirements.

The Big Question: How Do You Succeed?
So if it isn’t just a matter of time, budget, and a spread of features and functionality, how do you succeed? The most important part of the software selection and implementation process is to define your requirements. But, it’s not quite as easy as it sounds. Know what you do and the steps you have to take to do it, so the software you choose does what you need it to do. Don’t let the software features dictate your business processes and core activities— make sure your business activities determine the software functionality you require. To do this, you’ll need to get consensus from all stakeholders about what your core business activities are, and then, create one shared definition of those activities, also known as business process modeling (BPM). Not doing so may result in disagreement about what activities are most important—and worse, disagreement about whether your chosen software is meeting the needs of your business. To understand your software requirements—the starting point for a successful software selection and implementation—you must define your desired-state business processes.

Elements of Business Process Modeling
To define your processes, you’ll have to ensure you address all aspects of business process modeling (BPM). Note that these are not necessarily discrete, sequential steps. Best-practice software selection projects often address these elements concurrently or iteratively.
• Defining current processes
• Describing changes or additions to existing processes that improve business results
• Conducting review, analysis, and validation to ensure that requirements are clearly and completely described and aligned to your business objectives.
• Prioritizing your needs in terms of what you would like a new software system or application to address:
What are your “must-have” versus “nice-to-have” application features and functionalities?

Your internal business analysts (BAs) may have the necessary ability and experience to fully define your requirements, but if they don’t, it sets your organization up for a less-than-successful selection and implementation. As stated by the American Standards for Quality Control, “the vast majority of projects surveyed did not use sufficient business analysis skill….” According to the study, 70 percent of organizations lost control of time and budget while at the same time attaining far less functionality. Why? Because their organizations didn’t have sufficiently experienced analysts for this type of strategic project. In other words, most companies’ internal business analysts do not have the needed background, experience, or expertise to perform adequate or effective business process modeling. You need to give thoughtful consideration as to whether or not your organization may be jeopardizing its odds of success by going through the selection and implementation process alone. If your business lacks the necessary BA expertise, what can you do about it?

There are three solutions that can help you deal with the problem of inadequate analyst expertise.
1. Hire someone to coach and mentor your current business analysts through effective business process modeling and analysis, including driving consensus and requirements-gathering as well as steering you away from common BPM pitfalls.
2. Hire qualified outside consultants to do your business process modeling and requirements analysis for you.
3. Let the software vendor take care of defining your processes.

With all due respect to software Vendors everywhere, I need to issue a caution here. Vendors offering a “vanilla implementation”—one flavor for everyone—may sound all right until you realize that vendors will naturally fit your requirements to the functionality of their software offerings. But the fit may not be right, and the last thing you need is the headache of relearning your business processes to accommodate an unwieldy software package. You may have noticed that I haven’t talked about training your internal analysts in how to do BPM. The simple reason is that in-depth BPM training is a very long-term, possibly multi-year commitment—which the typical software selection project cannot accommodate.

Solutions Pros and Cons
Pros:
• Documentation available for future software selection projects.
• Internal staff has sample work deliverables and processes to emulate.
• Work done by experienced experts
• Sometimes faster implementation, especially for standard software.
Cons:
• Increase in initial costs.
• Reliance on the varying skill level and motivation of current BAs to succeed.
• Higher initial cost outlay.
• Doesn’t necessarily help improve existing BA staff.
• Usually results in large changes to business processes to accommodate software.
• Vendors fit your requirements to the functionality of their software.
• Incomplete definition of processes can result in loss of control over contract terms and vendor’s service delivery.

The Last Word
Are you ready to start your software selection and implementation project? To see if you’ve now got the know-how for a successful outcome, consider these questions.
1. Initial objectives for your software selection and implementation project are to:
a) Get a good price, or a price that meets your predetermined budget
b) Meet industry best practices and regulatory compliance issues
c) Meet your business process needs
d) Find a solution that is “user-friendly” and easy to implement
2. The most important measurements of success for any software selection and implementation project are:
a) Finishing the project on budget
b) Getting the maximum range of software functionality
c) Ensuring the project is not delayed
d) Defining your requirements accurately.
3. The best options for defining your business processes and requirements are to:
a) Use only your internal resources, including business analysts
b) Hire outside analysts to perform BPM
c) Get experts to guide your internal analysts through the BPM process
d) Hand the task over to the vendor

There are no right answers, but there are better answers. Any approach can lead to success. But the question is this: How do you improve your odds, faced with a risky and costly software selection project? By having your requirements thoroughly and accurately defined, you have a solid basis for the other requirements for success (time, budget, functionality). And, if you choose to engage the services of dedicated experts such as myself, you can benefit from best-practice services for successful requirements definition, including courses to coach and train your business analysts, project requirements elicitation, request for proposal (RFP) preparation, and project scoping and requirements planning.

Whatever you do, make sure you don’t end up a sorry statistic. Define your requirements with the help of specialized and experienced professionals.

THE QUALITY CORNER
Why focus on requirements? There may be several reasons, but, here are just a few:

Without a clear and concise understanding of an organization’s desired future state, achieving process improvements and organizational efficiencies will be left to chance.
Well-defined and consensually developed business requirements lead to increased opportunities for business systems integration. Having everyone on the same page is a good thing.
Jointly-developed requirements create an “us” environment rather than adversarial camps within the organization. Jointly- developed requirements bring people together, fostering improved and lasting work relationships.

FAQs

An interview with Darryl Barlett

In today's world of business alliances and partnerships, how do you remain truly unbiased?
Simple, it is one of my key principles. Don't get me wrong--I work with some excellent companies such as IBM, Hewlett Packard, Microsoft, Oracle, Qwest, and DigitalWorks, just to name a few. The key to these relationships is using them to the best advantage or value of my clients. When I work with company "A", perhaps the right solution lies with Microsoft, yet when I work with company "B", the right solution is IBM. All revenues come from my client engagements. I have no third party splits, finder fees or revenue sharing. I believe the best way to play is with my customer's interests being first and foremost. All secondary parties are treated fairly, and with respect.

What size business do you focus on?
I don't believe there is necessarily a need to focus on the size of a company. However, if you're going to improve business processes and implement integrated information systems, the sooner you do it, the better. Changing the direction of a speed boat can be done in less time and space than required to change the direction of the Queen Mary.

Why is systems integration so important?
First, let's define systems integration. All too often I find that people misuse this phrase. True systems integration follows the "domino affect". What I mean by this is that one business transaction automatically triggers the next. For example, when a sales order is placed, in the world of true systems integration, inventory is checked and relieved, customer billing is processed and product is shipped. Finally, purchasing is notified to reorder product. This type of systems integration is important to companies that want to compete and survive in today's global market. Systems integration saves time, money, and provides superior levels of customer satisfaction. If you don't have true systems integration in today's e-commerce, you may as well pack up and go home.

Is outsourcing a good move?
In most instances, I believe so. Obviously, I make money by managing outsourcing relationships, but more importantly, it can be a smart customer/client decision. SME's don't really want to be in the information technology business. They don't want the expense, inappropriate use of their precious working capital, nor the headaches. They did not go into business to be forced into being a technology organization. For these reasons, outsourcing can be a cost-effective way of doing business. I have a business relationship with Iemagine Inc. (www.iemagine.com) who has an award-winning presence in the ASP market. Utilizing their off-shore technical talent for custom business application development has proven to be an excellent choice in certain client situations.

What industries have you worked in? Where is your industry expertise?
I have worked in and have extensive experience in Clinical Research Organizations, Healthcare, Life Sciences, Commerical Software Development, Manufacturing, E-Commerce, Wholesale/Retail, Engineering, Legal, Information Technology, Pharmaceutical, Food Processing, International Product Distribution, Communications (Voice/Data/Wireless/Networking) and Professional Services.