Transforming and improving business operations lies at the heart of successful IT implementations. Despite the importance of these initiatives, one-third of survey respondents abandoned a process change project during the last three years, according to new research. The study includes nine guidelines to escape the prison of failed transformation.
A study commissioned by IT services provider, Logica, found:
- Companies surveyed in the UK lose £1.7 billion a year from failed change initiatives
- One third of business process changes fall short of expected benefits
- One fifth of businesses do not measure change management performance
The Logica study identified several obstacles contributing to these problems:
- Pressures of day-to-day business (48%)
- Lack of dedicated resources (38%)
- Lack of alignment between functions (38%)
- Lack of support from senior management (15%)
- Poor planning (16.3%)
- Lack of necessary IT/ infrastructure/applications (22%)
- Lack of expertise in business process design and / or change management (21%)
These findings are consistent with a similar Cap Gemini study also showing high failure rates:
Lack of control over the outcome and inadequate project ownership are considered to be the chief causes of failure. In fact, 46% of the executives cite the failure to achieve a project's original objectives, and 41% cite the inability to achieve buy-in from employees.
The Cap Gemini study further defined the extent of failure on these projects:
- 70% express dissatisfaction with the communication of objectives to employees, and 75% express dissatisfaction with training, commitment and people management
- 73% consider themselves to be unsuccessful in avoiding slippage in execution time
- 70% say they are not in a position to properly assess the success of their program
The Logica report offers nine guidelines for achieving successful transformation projects:
- Dare to be ambitious. Winners are more ambitious in their business process change than Losers.
- Be pro-active. Winners have more pro-active reasons to change. Winners...act pro-actively by putting far more emphasis on improving customer focus in their business process change than Losers.
- Open up to succeed. Winners are more collaborative with their customers and business partners.
- Make it a project. More and more executives come to realise that business change has to be formalised in projects and carried out in a professional manner.
- Know the critical skills for change. Project Management, Business Process Management / analysis / redesign, [and] IT were indicated by our respondents to be the typical skills required to carry out business change in their companies. Winners put far more emphasis on these three skills than Losers.
- Ensure IT supports business process change. Winners recognise far more the importance of IT as an enabler for business change and, importantly, they also invest more in IT.
- Involve external expertise on business process management. Winners do more business change with help from externals.
- Define and measure success. [I]t is essential to have systems and measurements in place to monitor progress and performance.
- Begin with the end in mind. Business process change is not a goal in itself; it is a means to an end. The only reason we carry out business process change is to improve process performance and therewith corporate performance.
Given the size and complexity of process change projects, such general guidelines seem almost pointless. However, many of these projects have serious issues, so apparently the basics of project execution are worth repeated study.
[Photo by Michael Krigsman.]