Is your Digital Transformation Programme providing a return on your investment? The answer to this is most likely a resounding “yes”, but do you know by how much?
I’ve been working with quite a few customers in recent weeks on various transformation and delivery strategies and the recurring problem I’m seeing, and one which his been present for as far back as I can remember, is that no one accurately or diligently tracks their investment objectives and ROI.
What I mean by this is, whilst most organisations can tell me their budget for a programme or project, maybe provide detail of how much they’ve spent, there’s nothing really beyond this. What they’re actually providing is a programme/project budget and spend profile. There’s a lot of Digital Enablement and Digital Transformation going on, yet how can you be sure these initiatives provide value if you don’t truly know the legacy costs of the services and business processes you’re transforming?
I’ve recently engaged with one customer who had been informed that if they move their data centre infrastructure to AWS (the choice of vendor was irrelevant) and utilise the vendors IaaS, they would save costs. Off the back of this, with no real in-depth analysis, an investment was approved, and programme commenced.
Now there’s two problems here, the first being that it’s almost unheard of to just do a “lift and shift” to a Cloud Service Provider (CSP)and expect to save money. It won’t happen (unless you’re maybe exiting an old school, uber expensive contract with a huge SI). The second is that, unless you go and work out what your “per server” costs are (and that includes staffing, power, licensing, hardware, upgrade/patching costs, monitoring costs, contract management costs etc.) you can’t really work out whether you will actually make a saving. Most places I visit simply tell me how much their hardware costs and how much their server licensing costs and use that as the basis for £million+ investment decisions. It’s nuts really.
Now I’m not saying you need to go scope out a whole wave of redundancies when you move to the cloud, but you certainly need to factor in staff costs, revise the roles and redeploy your resources elsewhere if possible. After all, the CSP will handle a lot of the activities previously included in your staff’s role specifications. With any change initiative, you need to consider all possible overheads. Even if it be the cleaning costs for a server room or the expenses incurred for attending an onsite meeting!
Now whilst the above has touched on the start of these change initiatives, ensuring accuracy and clear scope from the start unfortunately doesn’t fix all the problems. It’s important that each change initiative defines what its Critical Success Factors (CSF’s) are. These need to be specific, quantitative and measurable. Planning ahead for the CSF’s will ensure that considerations are made to measuring success, which will affect what actions and processes are put in place to guarantee these can be tracked, reviewed and reported on.
These CSF’s should all be defined around anticipated benefits, which are derived from the original investment objectives. The missing piece to moving from an idea, vision or even initiated project is the continuation of applying focus to such benefits and objectives. Very rarely do I see a programme tracks its benefits or CSF’s properly. Which leads me on to what I believe to be one of the most important governance mechanisms in Enterprise IT… a Benefit Realisation Committee (BRC).
Now a BRC can be set up for each initiative, or to span a variety of them (such as across a programme or portfolio). It doesn’t need new job roles recruiting into the business, although it’s important that each members role and input be defined. It needs to include key sponsors/investors, senior business stakeholders and capable product owners or relevant user representation of business functions and processes. The benefits need to be reviewed continuously:
- Are they still achievable, still feasible?
- Are they still relevant?
- Have they been superseded by anything else?
- Can the benefit be expanded? Can we exploit further opportunities?
In addition to the benefits, the CSF’s also need to be analysed each time theBRC meets:
- Has the anticipated return on the investment changed?
- Can you still accurately track the progress against the CSF?
- Will you still be able to effectively measure the success upon completion of the change?
The final piece to the jigsaw centres around the adoption. Engagement activities need to be conducted for a prolonged period after completion of the change initiative, to ensure true adoption of change. Users will naturally follow the path of least resistance, therefore once they encounter issues or skill shortfalls, it’s easy to fall back into old ways of working or resort to legacy processes. This also means that when success is measured in the weeks after the change, the same level of success might not be recorded should you revisit the CSF’s further down the line.
Continuous tracking of all this information, backed up by engagement, training and remedial actions, can ensure true benefit is realised and the long-term sustainability of these benefits greatly increased. It will also ensure a clear understanding can be generated of the true “cost vs benefit” and ultimately ensure the organisation can accurately determine the true return on their investment.