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Looking at IT System Change projects through Lean lenses…

Organizations of today across industries pursue large scale IT system change programs, where the focus is on improving business performance vis-a-vis elements such as ease of functionality, response time, defects etc.

A decision to invest and implement into a large (10 million dollar plus) IT system program is often preempted by a long freeze period where there is no change in the legacy systems and aligned business processes (while waiting for the new system to be decided, approved, and implemented). And, hence these projects are business critical and one wouldn’t want them to be other than successful.

Let`s visualize a scenario where you have granted a significant proportion of your investment budget, provided substantial resources and you are working with top of the line professional technology vendor(s) who want to meet and exceed your expectations. You engage your best subject matter experts who are keen to provide all their knowledge and dreams. They come up with a long list of new features and requirements, are eager to tell the business analysts their preferences (5 digit entries with validations, best address database, etc. etc.). And, all this is being facilitated by state of the art requirement and workflow capturing tools. All your steering committees have worked as planned, and project status has been mostly green (albeit after granting some grace period and some extra budget and resources) per the regular RAG status updates being provided by the project managers. Finally the D day (project completion) arrives and the new system is declared live with much fanfare.

And, this is when the reality strikes.

The system users start sharing feedback. Comments like “we are doing the same poor things again, just a little faster…”, “we still need to maintain all these Excel based mapping tools…”, “the fundamental issues at the front-office remained non-addressed…” become a norm rather than an exception. Leadership team and sponsors still receive a bunch of reports (equally difficult to understand), as in the past.

Why is that? How did it happen? What should we have done differently?

In our experiences at Enabling Excellence, in several such projects, the gap between the desired versus the actual end state is often a result of the underlying issues below:

  • Even though the best subject matter experts are allocated to the project, often they don’t challenge the status quo

  • Experts are being interviewed individually, but the eventual confronting opinions/solutions are often not resolved

  • Big picture thinking is on the banner, but a thorough and critical end to end review is rather rare

  • The leadership team asks the experts to overcome the issues that were logged in several steering committees, but never really take the time to understand the responses. A bit of “tick the box” exercise

  • Project is expected to deliver huge efficiency gains – but specific and potentially ambitious targets are not well defined.

Think 12-18 months back. When the project was kicked off and one could hardly wait to start the requirements engineering work. What if we had locked all SMEs along the end-to-end processes into one room? What if we would have given them the specific tasks to challenge everything along the value creation process (value add, non-value add), clarify all roles & responsibilities, etc.? What if all these ideas would have been collected, prioritized and presented back to the Steering Committee (of course with business cases)? What if we had experts from all relevant and contributing functions assigned on a dedicated basis to the project to give the fastest possible response to the “crazy ideas”? What if we would have set stretching KPI’s for the new operating model? What if…

Organizations that want to master the implementation of large IT system projects should use an integrated (process optimization embedded into requirements engineering) approach to have the highest return on these investments.

We recommend, constructing the project design and execution into 3 distinct phases.

Phase 1: Challenge Setting

Senior management sets the stage, and raises the expectations

  • Determine the main business indicators that the project seeks to address (coming from the executive team) – e.g. Total operating costs, Total processing time, Response times.

  • Determine the target levels for these business indicators for the project (should be ideally stretching targets)

  • Output: A “SMART” mandate for the project

Phase 2: Opportunity Mining

Multiple and well facilitated Opportunity assessment workshops of existing end-to-end processes with Operations, Front Office, IT, Business Process Experts, IT vendor, etc.

  • Main criteria for the assessment: customer (internal / external as relevant) expectations, efficiency, process risk

  • Challenge the current practices leveraging the Lean framework and identify the 7 wastes in the current end to end process design and implementation : 1. defects, 2. overproduction, 3. transportation, 4. waiting, 5. inventory, 6. motion, 7. over processing

  • Output: List of waste areas with quantified opportunities aligned to the KPI’s

Phase 3: Integrated Design

Perform a future state design by simplifying process steps, removing waste, streamlining customer (internal and / or external) information

  • Prioritization based on operational and business impact

  • Develop the execution road-map together with the IT vendor

  • Output: List of process changes with impact assessment on the system change

All these phases are supported with a distinct attention and monitoring by the steering committee. These phases are smoothly integrated into the respective system development cycle.

Gains typically reported by deploying such an approach are to the tune of 10-15% (or sometimes even higher) of budget saving drive by elimination of non-value added investments, and transformational efficiency gains in the post implementation phase.

So – if you are just launching your next big IT system change project, ask yourself: Where do you want to be in 12-18 months from now?

What have been the other challenges faced by you / your organization towards an IT system change project? What approach (es) have you used for overcoming those challenges?

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