Work the Right Problems/Opportunities

All organizations want to use their scarce resources (people, time, CAPEX/OPEX) to increase their performance and value optimally.

Strategy, including conceptualizing new innovative ideas and capabilities, is essential. However, many organizations have an abundance of new ideas.

Assessing and prioritizing ideas is crucial, including saying no to the ones that aren't meaningful and impactful to your organization's business needs.

Understand the Problem/Opportunity

Many teams have a propensity toward action, which is good. However, first, stand back to understand and confirm your problem/opportunity:

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  Is it valid from a constituent perspective?
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  Is it adequately understood?
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  Are you using realistic assumptions?
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  Are causes and effects understood?
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  Do senior leaders appreciate the economic impact and scope?

Consider using some of the following approaches and/or techniques to understand your problem/opportunity.

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  Choose right approach
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  Use proven problem-solving techniques
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  Do BAH HUM BUG
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  Collaborate with constituencies
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  Benchmark market
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  Apply different thinking methods
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  Think 80/20 -- less is more
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  Consider all business solution levers

Do BAH HUM BUG

Leverage available internal and external artifacts early in your problem/opportunity analysis. Doing so will:

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  Help springboard and accelerate the assessment process.
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  Increase the breadth and depth of your understanding of the problem/opportunity domain.
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  Save your organization's resources (people, time, CAPEX/OPEX) consumption by leveraging existing assets.

Do BAH HUM BUG is a quick memory jogger for seeking out three critical types of information.

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  Business Artifact Hierarchy: Seek previously developed business artifacts that pertain to your problem/opportunity domain.
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  Hierarchy Unit of Measure: Connect with a financial person engaged in your business segment, area, or capability to understand its financials, performance metrics, and operating ratios.
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  Business User Group: Gather the most current organization chart and position roles that cover the business scope of your analysis.

Create Cooperative Knowledge

Create cooperative knowledge by collaborating with peers, partners, and other constituencies. You and your teams benefit from those peers, partners, and other constituencies participating.

Leverage practices that lead to superior performance:

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  Creating cooperative knowledge is one technique for identifying and leveraging leading practices.
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  Establishing operating and financial targets based on the best industry and functional methods is critical for business success.
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  Cooperating partners may be industry-leading organizations or organizations outside the industry that excel in one or more functions or processes.

Think 80/20 -- Embrace Less is More

Match business needs to a business case. Focus on minimum viable requirements/capabilities to enable the business case.

The number and complexity of requirements are the primary drivers of project effort and cost.

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  To reduce project cost and schedule, simplify your solution to reduce the number of business requirements.
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  Industry research shows that, on average, 40% of requirements are never used in new applications.

Reduce Complexity

Use 80/20 thinking to minimize complexities before you begin a project and commit to a solution. The benefits may save your project and pay a nice dividend for years.

Pareto's Principle
Here are some concepts that Pareto's Principle has validated.

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  Few points in a negotiation matter.
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  A few people add most of the value.
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  Margins vary wildly across products/services.
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  Resources are always misallocated.
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  Success is underrated and under-recognized.
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  Equilibrium is illusory.

Consider Other Solution Levers

Is a technology project necessary?

Competition for technology CAPEX/OPEX is fierce.

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  Many IT organizations employ a process to filter, prioritize, and approve resources for projects, often referred to as Demand Management. This process aims to gather, consolidate, and prioritize requests for IT services. 
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  Demand Management is analogous to a return-on-investment (ROI) auction. Resource approval usually goes to requests with the highest ROI or the most compelling non-quantifiable benefit, e.g., risk mitigation, regulatory or legal compliance, critical run-the-business, etc.

Assess options, including non-technology possibilities, to solve your problem/opportunity.

Collaborate with business peers and other constituencies to explore non-IT options to address and resolve your problem/opportunity.

Non-technology options include:

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  Reengineer or obliterate business processes.
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  Redesign organization.
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  Employ Lean/Kaizen methods.
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  Use Six Sigma methods and techniques.
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  Sweat existing assets.

Assess Solution Options

A solution assessment should always include options.

Assessing options improves understanding of your problem space and provides leadership with alternatives.

Leadership appreciates being:

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  Proactively briefed on problems/opportunities.
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  Presented options to resolve those problems/opportunities, including pros and cons for each option.
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  Presented with a recommended option, supported by clearly articulated quantified and qualitative rationale.

Prepare an Opportunity Brief to brief leadership.

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  Describe the problem/opportunity
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  List options considered
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  The rationale for the proposed recommendation
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  Risks and their mitigations

Visualize Big Picture

A practical approach to assessing business problems/opportunities and their potential solutions starts with the big picture.

Looking at the big picture helps provide more context, including how your problem/opportunity domain interacts with the broader System environment.

Use two visuals to understand and progress your problem/opportunity to solution resolution:

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  Execution: describe what execution elements SPRONTO needs to change or be added.  (Strategy, Process, Relationships, Organization, Network, Technology, Operations)
  
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  Solution: understand the big picture of a potential solution by drawing a Context Diagram that visualizes Inputs ➔ High-level capabilities ➔ Outputs

Specify Outcomes

An outcome model, such as SPRONTO™, helps articulate the dimensions of the scope of work required to deliver your business outcome.

First, define and manage outcomes. Then, refine and quantify the scope as appropriate to maintain the integrity of your outcome.

Confirm Scope

Quantify your project's scope as early and precisely as possible.

What is Scope?
The scope quantifies the work required to achieve your project's expected business outcome.

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  Before defining a precise scope, understand and define expected business outcomes first. 
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  Then, work backward to understand the project and post-implementation work as part of the ongoing business operation required to achieve, sustain, and extend business outcomes.

Poor scoping results in:

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  Increased cost
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  Mismanaged expectations
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  Under-realized benefits
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  Staff turnover

Be Cautious of Assumptions
Typically, your technology teams and third-party partners use assumptions to allow future scope or project changes. More assumptions increase the probability of CAPEX/OPEX overruns.

Define Requirements

Thorough and accurate business requirements help make your project successful. Specifying wrong or ambiguous needs results in failure or trouble.

The Requirements Challenge
Here's the challenge:

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  Many business people don’t understand how technology and organizational change can impact their business capability performance.
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  Many technology people don’t understand the business of their constituents very well.

Poor communication, understanding, and visualization are the bedrock of the requirements challenges.

What's a Good Business Requirement?
A good requirement is one that:

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  Supports a vital business need.
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  Directly links to your business case.
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  Is reusable on future projects.
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  Is testable -- deterministic and unambiguous.

Avoid Rework, aka Ka-Ching! Late in Your Project

Some project teams scramble and rush to get through scoping and requirement processes.

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  Some business and technology people refer to the Design through Deploy cycles as the "We want to get there even if we don't understand what we're supposed to deliver yet" phase.
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  We often hear: "Oh, we'll just figure it out in Design."

Ka-Ching!
Guess what? While you're trying to figure something out during Design, Develop, and Deploy:

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  Your project is at its highest labor burn rate.
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  Your project will be at or near peak staffing.
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  Team members may be idle or distracted while you make scope and/or requirement decisions.
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  Team members will rework designs once you make decisions resulting in scope/requirement changes.

Ka-Ching! Ka-Ching!!! Ka-Ching!!!!!

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  That’s the sound of unproductive time immediately accruing and driving your project over budget and behind schedule.
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  What will all of those designers and developers do while your team is trying to figure out requirements?
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  Ka-Ching! Ka-Ching! Buckle up. It’s going to be a costly, wild ride.

Avoid unanticipated problems and additional costs that may be incurred later in your project by taking the following actions early in your project’s life cycle:

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  Test requirements
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  Create prototypes
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  Prepare test plans
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  Prepare deploy plans

Measure Value

All projects require justification to be approved. In today’s world of constrained resources -- people, time, CAPEX/OPEX -- project justification is a fact of business life.

Projects are justified when and only when they deliver value to an organization. That value must be updated throughout its duration and tracked and measured post-implementation.

Key actions to measure value include:

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  Develop a business case
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  Measure benefits
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  Estimate total cost of ownership: Project cost, including one-time and recurring; 
  Post-implementation operating costs -- business and technology
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  Secure funding
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  Monitor, measure, and update the business case continuously

Estimate Work

A level of precision is required for every estimate you receive from your technology team and third-party partners.

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  The precision factor demonstrates their confidence in their estimate and their understanding of solving your business problem/opportunity.

Representative precision factors by estimate type are:

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  Budgetary estimates have low levels of precision, e.g., +/-100% of the eventual actual cost.
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  Proximate estimates have a moderate level of precision. e.g., +/-30% of the eventual actual cost.
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  Commit estimates have a high level of precision, e.g., +/-10% of the eventual actual cost.

The deployment approach determines critical cost components, e.g., hosted on-premise or in the cloud, etc.

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  One-time costs
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  Annual recurring costs
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  Early termination costs
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  Service/role-related costs
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  Contingency costs
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  Confidence factor costs

Sell Warren Buffett

Would Warren Buffett Invest in Your Project?

Here are some of Warren Buffett’s investment strategies (adapted from How Warren Buffett Does It by James Pardoe). Note that these have been tailored to project investments.

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  Choose simplicity over complexity
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  Make your own investment decisions
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  Maintain proper temperament
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  Look for a project that has enduring benefits and a low cost of ownership
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  Buy proven technology and invest in common sense capabilities
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  Concentrate investments
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  Practice inactivity, not hyperactivity
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  Take a close look at the management
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  Practice independent thinking
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  Stay within your circle of competence
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  Use all your horsepower
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  Avoid the costly mistakes of others
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  Become a sound investor

Organize with Clarity

Nothing saps the productivity of a project like vague roles and accountabilities.

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  Organize with clarity to enable and sustain efficient project execution.
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  Ambiguous, poorly defined, and misunderstood roles are the demise of many projects.

RACI
A clear and definitive tool for assigning engagement obligations is the RACI.

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  Responsible: The individual assigned the work, e.g., outcome, deliverable, or task.
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  Accountable: The individual who is ultimately answerable for the correct and thorough completion of the work. Note that the "A" delegates the work to the individual responsible—the "R."
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  Consult: Those whose opinions and knowledge are sought, typically subject matter experts, with whom there is two-way communication.
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  Inform: Those who are kept up-to-date on progress, often only on completion of tasks or deliverables, and with whom there is only one-way communication.

Engage Constituencies and Partners Early

Engage the right constituencies, both internal and external, to your organization, early in your project.

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  Constituents are individuals or teams that have a vested interest in the outcome of your project.

Not engaging constituencies early and often is a recipe for failure.

Secure early constituent engagement by:

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  Conducting a constituent census.
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  Motivating and inventing constituents to engage.
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  Avoiding engagement shortcuts.
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  Leveraging the business case.

Engage Sponsors and Owners

Projects that lack strong business sponsorship are at high risk of failure:

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  Never start a project without a sponsor.
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  Every day the project proceeds without a sponsor, the ability to secure active sponsorship will fade.

Every successful project has the following attributes:

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  An engaged project business sponsor who’s enthusiastic, influential, empowered, and visible
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  On-going governance, aka steering committee, or other leadership groups actively engaged in providing business oversight and guidance to the project
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  Engaged upstream and downstream business and technology constituents who understand the value of and actively support your project

Promote Proven Practices

Successful products, services, and projects use a proven process to deliver delightful outcomes.

Every successful business has principles and disciplines around which they operate – a proven practice, aka methodology.

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  Many people don’t understand methodology or are intimidated by it, thinking it makes the path to success too narrow, rigid, or bureaucratic. That isn’t true.
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  Methodology is a process that clearly defines work activities, people roles, and deliverables required to produce the desired result.
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  That result could be any finished product, such as a dessert, building, legislative bill, diploma, commercial aircraft, automobile, financial statement, software application, etc.

A methodology is used to:

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  Demand specificity.
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  Manage complex people relationships.
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  Enforce standardization.
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  Facilitate knowledge transition.
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  Increase predictability.
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  Reduce costs.
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  Manage risks.
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  Improve decisionmaking.
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  Increase performance.
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  Support earlier intervention.
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  Increase focus.
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  Promote realistic thinking.

Assess Choices and Consequences

A project faces choices through every stage of its process, and each leads to a consequence, positive or negative.

Choices made early in a project most influence success, trouble, or failure. Choose wisely and beckon success, or choose poorly and diminish your star status due to poor project outcomes.

The methodology enables sound project choices and decisions.

Align Skills to Business Need

A leader's most crucial decision should be staffing a critical project with the right skills, experience, and knowledge.

Often, teams are quickly assembled based on who's available. That isn't the best approach and strategy for building a successful team.

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  Team design begins with understanding business needs, their complexity, and the criticality of the solution to your organization's competitiveness.
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  Use business and project needs to define the skills, methods, experience, and knowledge that need to be represented on the team.
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  Don't compromise. If required, seek outside help for specialized skills and knowledge.

Choose the Right Project Type

The seeds of failed or troubled projects are sown early in their life cycles -- during pre-project work, or lack thereof, and project initiation and approval processes. Project failure and trouble are often the results of poor decisions made early in a project’s life cycle.

Approve the Right Type and Breadth of ProjectOne of the more critical approval criteria is to ensure the project addresses your organization’s specific business needs. Different types of projects address different business needs. Choose the right type of project to meet your needs and mitigate risks.

Differing types of projects depend on:

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  What’s the focus of the decision to be made?
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  What’s the current level of knowledge or understanding regarding the business problem or opportunity?
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  Can the proposed work be estimated with precision?
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  Can the scope of work be quantified into a bill of material (BOM)?
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  What’s the degree of solution risk or uncertainty?
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  What’s the business outcome the team is going to produce?
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  What skills are required to deliver the project successfully?

Those questions guide the decision regarding the type of project to initiate and the basis for a project agreement, e.g., terms and conditions.

Types of Project: The type is based on the requested business or System change.

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  Feasibility, aka discovery
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  New Capability
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  Enhancement of an existing capability
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  Operational, aka run the business

Leverage Standards and Assets

New technology can be fickle. Be aware of the risks associated with being the first to use new technologies, both from inside your organization and from a market perspective.

Approach unproven capabilities, such as software applications, hardware, or other technologies, cautiously.

When unproven capabilities need to be considered, e.g., for competitive differentiation:

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  Develop a sound business case.
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  Highlight and mitigate critical risks.
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  Ensure senior leadership understanding and alignment.
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  Create one or more prototypes/pilots to validate represented capabilities.

Standardize on Proven Architecture
Use the hardware, software, and methods consistent with your organization’s technology standards.

Standardize on proven architecture to deliver faster project results at lower costs.

Technology standards provide an organization’s “building code” for developing and deploying applications and technologies.

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  Using standards can minimize the total cost of solution ownership.
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  Technologies not standard within your organization can result in higher costs, more risk, and potentially less stability in solutions.

Control Your Destiny

At times, projects may seem out of control, and business people may feel that they’re at the mercy of technical gurus.

Nothing could be further from the truth. You and your team can control your destiny when working with technology/partner teams on projects.

All it takes is:

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  Engagement
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  Sound business acumen
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  The courage to do what’s right

If something doesn’t feel right, chances are it isn’t. Engage and don’t let up until the problem is identified and solved.

Critical actions include:

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  Commit to your project -- think, organize, behave, and act from day one
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  Manage the checkbook
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  Create a balanced and realistic plan
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  Base your plan on proven practices
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  Control project work through the management process
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  Document and agree to abort criteria

Approve Fee Arrangement

There are three basic types of fee arrangements. Each has variations and pertains to labor, expense, and contingency components. Actual hardware, software, and other costs are usually billed as incurred.

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  Time and materials
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  Fixed fee (Let's be clear; there's no such thing as a fixed fee. However, there's such a billing arrangement as a fixed fee for fixed scope. And we all know that scope never remains fixed.)
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  Firm price

Criteria for selecting the type of  fee arrangement include:

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  Project type and size.
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  Predictability.
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  Scope management rigor.