"Information technology was supposed to put us in the fast lane. So why are we stuck in traffic? The headlines tell the tale.
"Item: Projects involving the installation of new technology cost twice their budgeted amount and take three times longer than estimated to complete.
"Item: One-third of all company-sponsored software-development projects are cancelled and abandoned.
"Item: Half of all information-technology projects promise big benefits and greater functionality -- then don't deliver.
"Item: Failed application projects cost businesses more than $80 billion annually in the US alone."
So begins a chapter on spotting the issues that snag primary information-technology action programs in Action Management: Practical Strategies for Making Your Corporation Transformation a Success (Wiley; May 3, 1999) by Stephen Redwood, Charles Goldwasser and Simon Street of PricewaterhouseCoopers (PwC). Recently released, the book is designed to give executives real-world advice on how to change and adapt to the ever-shifting parameters of successful business strategy.
When PwC surveyed some of the world's leading multinational companies it found more than 35 per cent didn't have enough time to plan, design, construct and implement information technology. Some 25 per cent complained the systems they installed didn't live up to their promise. It's what the authors call a "tidal wave of scandal, a tsunami of bad news" -- one that's coming at any manager planning a business action.
More particularly, it's symptomatic of the continued "massive failure" of companies to understand what it takes to actually make an IT implementation project work, says Redwood, who's PricewaterhouseCoopers global leader, organisation and change practice, based in Tokyo.
And it highlights the fact that the nature of technology is changing so dramatically, the old ways of understanding what technologies to use and how to use them are no longer helpful. "People need to start educating themselves about the new technologies that are available and how they will suit their company as it may be in five years," Redwood told CIO from Tokyo. "The whole structure and nature of companies is going to be very different in a few years, when the full impact of Internet technologies and e-business starts to hit home, and this is going to force a further wave of massive technology change."
Redwood and his co-authors may have a unique insight into those foreshadowed changes. Their book is based on the findings of an in-depth and comprehensive management survey of some of the world's leading multinational businesses. Called the Global Action Survey and conducted by Market Opinion Research International (MORI) in the UK, the survey set out to identify and define the barriers facing managers trying to improve business performance. It incorporated research from more than 500 businesses in 14 countries and industries ranging from high technology to health care.
Building on that research, the book defines the 10 most important challenges facing managers today and discusses ways to design, direct and implement actions in ways that ensure they improve performance without eroding workforce morale. According to the authors, constant talk of change management somehow disguises the fact that it is impossible, in any meaningful sense, to manage change. All we can manage is our actions, hopefully in ways that help the company navigate a business environment where change is the only constant.
With the business landscape changing at a frenetic pace, the authors see companies crying out for ways to change and adapt to the ever-shifting parameters of successful business strategy. This is what the book sets out to do. At its core is the thesis that a business change is very different from a business action, and that while business change is largely beyond control, each business action can be consciously controlled.
Under the authors' definition, a business action is any consciously directed project or initiative seeking to improve business performance, whether that involves the performance of people working alone, in teams, or across an organisation. So an action might be a business or culture change program; the re-engineering of business processes; a merger or acquisition; an operational, business unit, functional or departmental restructure; or installation of data management, knowledge management, or enterprise resource planning (ERP) software.
But while it's relatively easy to understand a business action and its predictable stages and paths, it's much harder to know how to manage it -- how to design it, direct it, and implement it skilfully and effectively in the face of great pressure.
This is what the book sets out to help managers do.
Every Corner
There's a minor but important distinction between implementing ERP software, which the authors describe as an example of technology in action; and implementing a barcode system to speed up a process, which they cite as an example of technology that supports action. But they point out that IT affects virtually every corner of the business in action: from the unit that is restructured, through the process that is re-engineered, to the employees engaged therein.
"It is hard enough to install new technology and make it run correctly; but action managers must do more," they say. "They must integrate the new system into their overall action. Only then can they determine how the organisation will operate, deliver value to its customers, and stay competitive."
The key to getting technology right is to avoid turning IT solutions into IT problems. That means recognising that even planned delays in implementations can be fatal to technology projects. It involves envisioning IT projects not in terms of all that is required to achieve the ultimate aim, but in terms of what can be implemented in manageable increments then expanded in succeeding stages.
It calls on action managers to help leaders make informed decisions about IT projects, especially if leadership changes during an action. It involves helping workers adjust to new technology and new roles and using phased technology rollouts, in the interest of letting people see the possibilities that lie in store.
Root Causes
"One of the things that became clear talking with companies as part of this research was that they weren't spending enough time getting to the root cause of why they were experiencing huge delays in implementation of technology," Redwood told CIO. "A lot of them were saying that they had a very sequential view of how to implement technology and they were finding they were having to move more to an iterative cycle of development where they would develop a system in parts."
Delay in implementing IT can be deadly, and the problem runs much deeper than trying to keep up with the latest technology. Not only is action impossible if the underlying technology is in a constant state of flux, delays fuel the scepticism of those who insist the technology solution can never deliver.
One root cause of delay is a lack of understanding of what the company wants the technology to do once it is implemented. A second is paying too little attention to the people issues around implementing the technology and preparing the organisation for the changes. A third is the habit of implementing new technologies in the expectation they will solve organisational problems without considering the need to rework the whole business at the same time.
Instead, CIOs might envisage projects not in terms of all that is required to bring about the ultimate end result, but rather in terms of what can be implemented in manageable increments and then expanded in successive stages. For instance, managers might begin each project with the requisite analysis, then direct the design and construction of the IT system in incremental parts at six-month intervals, with an eye towards designing and building on work in progress.
The process is one of continually creating visions that build on what is proposed to be implemented in tandem with simultaneously installing the previously envisioned pieces. This lets the action manager shorten the life cycle while ensuring the overall project stays on track to its desired end.
Coaches Wanted
Redwood says CIOs and IT managers must above all act as visionaries on behalf of their businesses for future technology requirements, given the huge changes that are coming down the line. "It also means they must be coach to operational leaders who don't understand technology properly; to help prepare them and develop their understanding of what the technology can do for them; and to guide them in terms of their thinking about how the organisation should change around it," he says.
"Finally, instead of trying to solve the problems of the world in one step, maybe think about using a more phased rollout of technology, so you pick up the possibilities of learning from experience through several iterations." That means rolling out the entire application to one part of the business before rolling it out to the next to ensure the impact happens quickly in every area it is implemented, while keeping you free to leverage the experience gained with each rollout.
But such a phased rollout has to be kept in the context of recognising that companies simply haven't got the luxury of having years available to them any more to spend putting in a system and getting it right. After all, any system installed today is likely to be redundant in five years.
And scope creep remains a significant pitfall for many companies, bedevilling many of the multinational organisations surveyed. Redwood says scope creep can sometimes occur because the stakeholders' perspectives have changed, rather than the project. It's under the latter circumstances that disappointment sets in as the project takes shape and its limits become clear.
Scope creep comes about where companies don't have a clear vision of what they want to achieve with a technology, or lack understanding of the changes likely to result from installing a new technology. "People start off with, quite often, a fairly narrow scope definition of what they want to achieve. They find putting in a technology impacts on all sorts of unexpected areas of the business and then find the human dimension becomes a much bigger issue than they expected. So the scope starts to increase dramatically," Redwood saysNot that it's feasible to fully understand the implications before putting in a new technology. Instead, CIOs should develop a new philosophy towards such action programs.
Don't start off expecting to be able to predict every impact of the new technology. Begin with the certain knowledge that uncertain, unexpected things will happen, and build flexibility and room to manoeuvre into your original planning to ensure you have the capacity to respond to unexpected changes.
"Start from the point of view of saying: unexpected things are going to happen, let's plan for being adaptive rather than planning for being resources-constrained when we do need to do something unexpected," Redwood says.
It's those unexpected problems that can cause enormous -- and justified -- cynicism among CEOs about the value of IT. Justified because if technology benefits promised within six months have still not eventuated two years later, top-level sponsorship of the implementation is certain to take hits, leaving the project languishing with its potential unexploited.
Half-life
The authors' half-life rule states that for every six months you fail to produce a quick win, support for your action is reduced by half and employee resistance doubles.
Avoiding such disasters means managing the expectations of the CEO. It's essential he or she is made to understand that technology is no more certain than many other aspects of business. He or she must be conditioned to accept the fact that this is a complex world where unexpected events are a certainty.
Don't try to sugar-coat the picture, Redwood says -- IT projects are high-risk and should be acknowledged as such. Acknowledge the magnitude of the challenge, but also stress the potential rewards and work to minimise the roadblocks. And make sure leaders are fully aware of the demands they are placing on IT staff. Educate your leadership about the implications and benefits of various solutions through a process of regular dialogues with executives.
Superheroes
How can CIOs lead for action? Redwood says leaders are often expected to be superheroes, as well as coaches to all those who need to make an action happen. And the book acknowledges the value of downward coaching one-on-one, or in small groups to help employees grow comfortable with and learn to master new systems. Coaching also gives managers critical feedback about what does and doesn't work in the new system where it really counts -- in action.
But Redwood goes further, insisting it is just as important to coach leaders -- to help them recognise the areas they should be focusing attention on and the resources they should be making available -- as it is to coach staff. "Upward managing is one of the points we're making here, rather than expecting it all to come down from the top. So the CIO has to act as the coach to the CEO; but also act increasingly as the visionary for the business, because so much of business for the future is going to depend on a different sort of technology platform," he says.
Some people are natural visionary leaders. Other leaders have made themselves more visionary by taking a good practical look at the world, viewing it in a more realistic way, and then dealing with that new reality. "I think that second category is the one where people should focus attention, if they're looking for role models or looking for ideas about how they can turn themselves into that kind of person," he says.
Take the example of Nobuyuki Idei, CEO of Sony Corporation, whom Redwood describes as a perfect role model for CIOs. Idei is highly visionary about the future of Sony and has done a lot to turn the corporation around and make it a strong business, Redwood says. "He talks about his interest in complexity theory and the relevance of that to running an organisation, and so he's educated himself to become well adapted to an environment in which complex events take place with unexpected outcomes.
"I think modelling yourself on others, who have taken it upon themselves to educate themselves about the way the world works, is a good place to start."
Summing up, Redwood asserts the CIO, as much as any business leader, needs to be looking at the action path they should be taking, recognising that different circumstances will require different routes. Never assume, with technology any more than any other kind of action program, that there's only one way of doing things.
"Above all, make sure you are not so locked into one set of experiences you have had historically that you use that to drive the way you do things in the future," Redwood says.
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