The Rapid Return on Investment Trap
The Rapid Return on Investment Trap
The technology industry is running at a pace, with the rate of innovation ever increasing as we launch headlong into the new era of AI and machine learning. Commensurately, companies want to see a faster return on any system investment and the project delivered on time, on budget and meeting KPI’s and associated metrics.
Rapid return on investment is a growing trend and can be a trap.
Personally, I don’t think there has ever been a time in business when I have heard; “Take your time about it, we’ll just go live when you are ready…”. So how do we balance the need for speed with the need for a phased approach, data accuracy, system and quality assurance and testing? You can be sure as eggs are eggs that if the project doesn’t allow enough time to ensure data accuracy, then the project will fail.
Companies want to realise the benefits of the new system straight away; to drive competitive advantage or increase efficiency and so the push for faster, sooner, now! This is a trend that is accompanied by zero-tolerance for delays. And although I am not suggesting for a minute that delays are a good thing, but a multi-layered project that cuts across the business such as a new ERP or CRM is a long-term investment that needs to be run through the appropriate project stages. Cut short these stages at your peril.
Pressure from senior management can drive project teams to cut corners in a bid to hit deadlines, rather than hitting the desired outcome. This will inevitably cause the project to go off the rails. Internal communication of the issues and the scale of the task ahead needs to come with an honesty in reporting that can sometimes be daunting in an internal team. Also, every project needs to go through ALL the stages; requirements gathering, end-user expectations, planning, success criteria, risk analysis and above all change management. A project manager who says they know what is needed without going through these stages is doomed to failure. No matter how big or small the project these processes need to be applied.
Shareholders and investors can add to management pressure as there is a growth of private equity investment in the UK and these PE firms increasingly look for their investments to be on a growth curve, with the systems and processes to sustain that growth model.
These factors (rapid ROI requirements, growth of PE investors) are changing the decision-making process and even what is being chosen. The need for rapid ROI may impact the IT solution selected and even the implementation partner chosen. All in a bid to shorten the project and drive a quicker deployment.
The classic approach to projects was to pay a consulting company to draw up a list of business requirements, turn that into a User Requirement Specification (URS), and this would define the selection process. Although this is not necessarily the whole picture any longer, as the speed of innovation means that you no longer know what you don’t know! In other words, you may not know what technology is available and what it can do for your business.
I am sure not everyone is as ignorant as me when it comes to cars, but if I was looking to buy a car, I couldn’t start with a requirements list, as I no longer understand what is out there. For instance, the last time I was looking for a 2nd hand, red, 4×4 with aircon that was easy on the eye, easy on the fuel and easy on the finance – it was easy. Now the permutations and combinations of hybrid and electric is unfathomable – I need an expert to help and I need to test-drive and undergo a thorough due diligence.
It is the same for system selection as the choice has widened. Projects need to start with an education and research phase to learn what is available in market today and what capabilities are available from which vendors. Then that needs to be considered in parallel with defining the URS, rather than in isolation, as this will reflect the needs of the business and consider what is available from whom.
Undergoing this research phase has the added benefit of putting you firmly in the driver’s seat of the decision-making process and the selection criteria, rather than allowing it to be dictated by other forces in the business. A well-documented decision process and URS can set the standard on delivery as well as the success metrics and hence ROI.
There are often opposing forces within a company during a large-scale transformation project and these can be extremely hard to manage. It is often worth considering the assistance of a 3rd party project team to ensure that all the different components of the project are aligned, without the internal politics. Having a professional sounding board and a way to sanity check decisions and processes can provide a vital cog in a smoothly greased wheel.
Managing change or transformation is big business with “Business Transformation” consultancies springing up all over the place, supported by technologies and methodologies that will manage and document the change. This is part of the ROI process; plotting the now, the future and the metrics in the middle that hopefully plot the improvement.
So, although faster can be achieved with the right team, faster should never mean rushed.
Rapid ROI can be achieved by putting the right team in place at the outset. Be that for a new system or a phased upgrade; the right team will ensure the focus remains on the business requirements while ensuring all the necessary phases are completed.
One thing that never changes is that all projects needs to “get it right first time”.
ReInforce Technology can help you get it right first time as we have skilled professionals who understand technology and understand business. If you have an Infor ERP project and need experienced consultants, product specialists or business analysts then please drop me a message on LinkedIn; https://www.linkedin.com/in/catherine-heilbron/