Your Best Insurance for Multimillion Dollar Tech Projects (Independent Project Reviews)
Germany’s biggest discount grocer, Lidl was primed to make a strategic and profitable digital leap. Yet, after 7 years and €500 million in sunk costs, what resulted was a failure to introduce systems applications and products into its new inventory management system. The project died on the table in 2018.
Despite strategic planning dating back to 2011, the project lost its shine when roughly 1000 staff members and hundreds of consultants prepared for implementation. The costs quickly spiraled beyond the 2 groups’ estimations, without bringing the project much closer to success.
The United Kingdom’s National Health Service launched the largest public-sector information technology (IT) program ever attempted, the National Programme for IT. It was originally budgeted to cost approximately £6 billion over the lifetime of the major contracts.
These contracts were awarded to some of the biggest players in the IT industry, including Accenture, CSC, Atos Origin, Fujitsu, and BT. After significant delays, stakeholder opposition, and implementation issues, the program was dropped in 2011, almost 10 years after its inception and with costs estimated at over £10 billion.
The American car rental company, Hertz hired Accenture in 2016 to completely overhaul its online presence. Their new website was expected to launch in December, 2017, was then delayed to April 2018, and now indefinitely.
While Hertz weathered the delays, it found itself in a bigger nightmare: it was saddled with a product and design that didn't do half of what it was expected to do and that remains incomplete. By that point, Hertz no longer had any confidence that Accenture was capable of completing the project, and Hertz terminated the contract. The car rental company launched a formal lawsuit against Accenture this past May (2019), suing for the $32 million USD it paid Accenture and millions more to cover the cost of fixing the mess. “Accenture never delivered a functional website or mobile app,” Hertz representatives claimed.
These 3 examples (and there are many more like them) have 1 thing in common. The plug was pulled far too late.
All too often, project teams, sponsors, and stakeholders lose sight of the larger vision and are unable to course-correct and make strategic decisions. There are many reasons for this: overconfidence, oversimplification, avoiding pain, binding contracts, lack of skills, lack of experience, egos, lack of information, and confirmation bias.
So how do you insure yourself against such catastrophic failures that can bring your organization to its knees?
Simple. Independent project reviews.
What are independent project reviews, you ask?
When we talk about a project review, there are many names thrown around that, at face-value, are all taken to mean the same thing: project review, project health check, project audit, project retrospective, and project post mortem. But are they really the same? The short answer is “no.”
A project audit bears on issues of compliance and has to do with the now. An audit aims to show the extent to which your project conforms to the required organizational and project standards, its fidelity. So, if your organization uses PRINCE2, or their own project management methodology, an audit will look at how closely you follow the processes. An audit can take place either during the project or after it is completed.
A project retrospective, or post mortem, is about learning lessons so that your next project will run better or, at least, equally well. A project retrospective is performed after the project closes, so is of no use to the project itself.
A project review has to do with project success. A project review will give you a good understanding of the status of your project and whether it is on track to deliver against your definition of project success on the following 3 levels:
1) Project delivery success: will the project delivery be successful? Essentially, this assesses the classic triangle of scope, time, and budget.
2) Product or service success: this refers to when the product or service is deemed successful (e.g. the system is used by all users in scope, up-time is 99.99%, customer satisfaction has increased by 25%, and operational costs have decreased by 15%).
3) Business success: this has to do with whether the product or service brings value to the overall organization, and how it contributes financially and/or strategically to the business’s success.
Note, “independent” suggests that the person (or team) that is completing the review is not involved in the project, and lacks ties with any associated companies working on the project. In short, reviews by vendors, your own organization, or implementation partners have no place here.
So how does the reviewing party get the information they need?
Below are the 12 building blocks of a typical project review. The row order is not carved in stone and can be adapted based on availability and priorities. It is worth noting that the results of 1 building block will be an input of another.
1) Success: Understanding the project success criteria mentioned above
2) Stakeholders: Understanding the project stakeholders, i.e. their desired outcomes and expectations
3) Governance: Sponsors, steering committee, and controlling. How does it work in theory? How does it work in practice?
4) Engineering: Is the system created through separate development? What about testing and product environments? Is there continuous integration? Bug reports? How is the quality so far?
5) Technology: Solution architecture, stable technologies, back-up, disaster recovery, and performance
6) Team: How is the project team working together? What is their capacity, collective skills, relationships, and project management methods?
7) Scope: Understanding when the project is “done.” Is it defined? At what level? Is it clear? Is there a change management process in place? What changes have taken place since the beginning?
8) Schedule: Is there a plan? Is it realistic? Are there contingencies? Have there been any significant changes to date?
9) Financials: Is there a clear overview of costs? Are these complete and correct? What about forecasts, budgeting, and controlling processes?
10) Impact: Who and what will be impacted when the project goes live? What changes need to take place to anticipate and respond to associated needs? How will the change be managed? How is it operationalized?
11) Risk: Assessment of (currently) identified risks, identification of new risks, and review mitigation actions in place
12) Contracts: Review existing contractual obligations for all parties involved
Smart companies will organize periodic reviews of large, multi-year, strategic projects to verify that all components are on track; that the technical foundation is solid; and that the business case(s) remain valid. This can be performed once a year, or at certain project milestones.
When your company is unwilling to make this investment, the second-best approach is to organize a review the moment you think one of your key projects is in trouble.
An independent project review will give you:
> An outside 360-degree view of the current status of your project;
> The information you need in order to make good decisions;
> An outside opinion on the project’s likelihood of success (project delivery success, product/service success, and business success); and
> Suggestions for corrective actions on the discovered project issues and challenges
Quite simply, an independent project review is your best insurance against losing touch with reality.
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