the economy is bad. OK, it is hard to get excited about the turn-around. IT
projects are on hold to the dismay of IT professionals and vendors. But is money
really the roadblock? We think risk and time present roadblocks as big, if not
bigger than money.
a variety of meetings over the last month, we have been hearing about projects
not going forward. In most cases, the "no money" reason was seen as
the cause. Looking at the details of projects that were approved and those that
were killed, we analyzed the dynamics of the software decision process today.
We used Lewin's Force Field Analysis (see Lewin's Force Field Analysis of Change,
Prentice Hall, 1999). The Lewin Force Field Analysis looks at drivers, forces
that are in favor of the decision and restrainers (roadblocks), those forces
that are opposed to the decision. We found:
The restrainers are listed in the order of impact, risk being the most important restrainer followed by time and then money. The first two Restrainers are related in a way that the third, money, is usually the stated reason for killing the project. Digging under the covers showed us that the money issue was usually caused by too much risk and too much time required. Since it is simpler and more understandable to talk about money, people use the money excuse as a proxy for risk and time.
project, no matter how small or "safe", has some risk. In difficult times, the
penalty for failure is seen as more severe. The business cannot afford to waste
time and money on a failure because time and money are in short supply.
first risk question is, "Will it work?" Although vendors find this surprising,
or even insulting, it is a very valid question for the end-user. There is no
such thing as a sure thing and tackling new software technologies, no matter
how proven, raises the "Will it work?" question.
next risk question is "Will it produce the expected results?" Any project needs
to be justified but will this project deliver the decreased cost or increased
revenue used as the justification. The press is reporting some dire results
from past projects (ERP, CRM. etc.) and this increases the fear that the returns
will not be delivered.
the business world, we always must think of the personal risk factor. People
are afraid for their jobs in this economic climate. The project sponsors are
using their political capital to get the project approved. The personal risk
is part of the equation. The question, "If this fails, what does it mean to
my job, my career, my family?" may never be vocalized or consciously stated,
but it is a question nonetheless. In difficult economic times, most jobs are
at risk and sponsors tend to consider the personal issues involved.
companies have experienced some downsizing. Companies believe they just do not
have enough people to do everything they need to get done. Time has become a
precious resource that must be horded. This results in companies tending the
business more than improving the business. Companies are asking these questions:
Will we have the time available to make this project a success?
Will we have the right skills? The best people for any project are usually
the people who are most in demand.
How do we free up these people so that they can work on the project without
damaging other parts of the business?
few companies are experiencing freezes in spending. For others, money is very
tight. However for these, and even some of the companies with freezes, it is
possible to get the money for the right project. In most cases, there is money,
but the investment cannot be justified due to inadequate return. A project must
show adequate ROI but the return is often discounted due to risk. Since calculating
the ROI on most projects includes some estimates or outside variables, it is
easy to convert risk or a lack of time into a poor return. The risk is seen
as too high or the time is not available or justified.
Overcoming The Risk, Time And Money Restrainers
Lewin's Force Field theory, it is important to diminish the Restrainers, more
than reinforcing the Drivers. In other words, you should work on minimizing
the obstacles not maximizing the benefits. In this case, if there is a chance
that the money can be made available, first attack risk and time and then the
money may follow.
is the key restrainer. No matter how hard you work to lower the risk, some risk
will exist. The odds of success can be a very emotional issue, and the vendor
or sponsor offering more proof can overcome much of the emotions. This means
more reference visits, more case studies. One lesson learned over the years
tells us that in a down economy, projects that reduce cost are more acceptable
than those that increase revenue.
the odds of success (lower the odds of failure) and lower the impact of failure
by lowering the amount of money and time at risk.
Do a small proof-of-concept project to prove the idea will work, investing
a smaller amount of time and money.
Break the total project into a series of smaller pieces where each smaller
project can be evaluated separately as time progresses.
Design the smaller projects so that each has tangible results with a return
appropriate for the investment in time and cost.
For projects involving a vendor, can you shift the risk balance?
A vendor can lower the amount at risk by allowing the customer to use the
technology for the proof of concept phase at limited or no cost or by doing
the consulting at a reduced rate.
A vendor can chose to share of time burden, assisting in some tasks that are
normally done by the customer.
The vendor can also address the up-front investment by allowing the customer
to pay over time.
Are the precuts available on a subscription basis.
To lower the amount at risk and communicate that they have confidence in the
success of the project, the vendor can offer terms that do not involve a long-term
we understand the true restrainers to getting to yes, we can address them. Too
often, we accept the money reason because it is an easy to understand. Often,
the lack of money is really a proxy for too much risk and too much time. Address
risk and time first and the money may follow.
projects involving a vendor, work with the vendor to minimize risk and time.
Vendors, rethink your offering to minimize risk and time in order to get to
Thompson, a principal of Process ERP Partners, has
over 25 years experience as an executive in the software industry with the last
17 in process industry related ERP, SCM, and e-business related segments. Olin
has been called "the Father of Process ERP." He is a frequent author and an
award-winning speaker on topics of gaining value from ERP, SCM, e-commerce and
the impact of technology on industry.
can be reached at Olin@ProcessERP.com.