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Posted by Susan on 5:53 PM Tuesday December 30, 2008 under

Recently, I asked some business executives for their top three IT wishes. Across the board, their responses echoed a common plea: "I wish IT projects would come in on time and on budget."

Funny thing is - this very reasonable sounding request is actually quite unreasonable.

You see, we are no longer simply automating existing manual processes. We are trying to change the way people think and behave. Who really knows what's going to happen when...

  • Field agents are given access to real time business information
  • High priced consultants are given a virtual workspace that consists of instant messaging, telephony, and audio and video conferencing as well as real-time document sharing, virtual white boards, high-end video conferencing, and PC-to-PC audio and video conferencing
  • Franchisees are given a Web-based system to quickly source parts that their customers need from any major manufacturer
  • Consumers are able to collect and redeem points for rewards and prizes online via their cell phones

Innovative applications of information technology begin with someone asking, "What if?" Innovative people and teams guess or hypothesize about how new capabilities will change behavior to the benefit of the organization.

Hypotheses are tested via experiments. While the inputs to experiments are known (in terms of the approach and resources necessary to figure out if A+B impacts Z), the outcome of experiments, by definition, is unknown, and more often than not will be along the lines of, "Back to the drawing board."

To obtain resources for IT-enabled experimentation, our inventors have to invent a business case that, in terms of outcomes, sounds deterministic not probabilistic.

Then an experiment becomes a project and, in this transformation, expectations shift to assume that there are more knowns than unknowns. The false assumption of precision - that when we do A+B, the outcome will be Z - is used to drive the project plan and functional requirements.

In the course of the project, in the quest to deliver Z, the inventor is forced to perform experiments. This frustrates IT to no end, for as the inventor goes through multiple iterations of replacing A with C and adding D, in order to get the desired outcome, the Z, scope changes and project costs and time lines escalate.

The inability to deliver against time, budget and scope is disheartening for all involved and, left unchecked, will eventually inhibit innovation. The inventors are less likely to ask the, "What if?" type questions and IT learns to pad their budgets and time lines. This makes it more likely ideas will be killed at inception, which in turn makes the IT investment board jaded about IT-enabled projects. So the board demands additional justification, thus reinforcing the negative cycle.

There is a better way. And executives who wish IT projects would come in on time and on budget should make a New Year's resolution to try it: Approach IT projects not as projects at all, but rather as experiments: 

  • Prepare a business case and estimate overall funding needs based on a sequential plan of experiments
  • Request funding for the first experiment and define success as the ability to prove or disprove a hypothesis (e.g., franchisees will use an on-line tool providing it has the following information and performance) or gain additional information (e.g., this is the information that the agents want)
  • At the end of each experiment, determine what was learned and revise the business case and sequential plan of experiments and request funding for the next experiment provided the overall business case still makes sense

One caveat: assuming that the experiments prove out, the resulting system will be a good working prototype, but will not address enterprise needs for scalability, reliability, and integration. In order to plan for this eventually, include rebuilding costs in the business case. Doing so will give IT the incentive to use the cheapest means possible to prove out viability of a concept without being saddled with trying to make the system industrial strength during the experimentation process.

Weigh in and share your resolutions on how you get your IT-enabled initiatives to come in on time and on budget.

 

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