Close
Close

Escalating ROI rockets systems implementations forward

Traditional systems implementation projects strike fear in the hearts of CEOs, CFOs and CIOs everywhere. They know these projects have a reputation for being large and complex, with highly technical infrastructures that need to be well-integrated and automated on day one. They also know that it takes an enormous amount of financial and technology staff time, which can be at the expense of everyday business during long implementation phases. Well-known unsuccessful implementations at other companies add to the anxiety, since most executives are aware of their own inexperience in implementing major systems.

It’s time to throw out those old ideas and misconceptions. Systems implementations have come of age. From the first technology wave in the mid-1990s to the present, we’ve seen the traditional model upended and successful projects become the norm.

A shift in focus is the key
Traditional models viewed large projects as having the best potential for success. Unfortunately this led to high stakes at the kickoff of an implementation. Compounding the risk was that the bigger and more complex the project, the higher the odds of failure. Technology leaders started to look for ways to meet return on investment (ROI) expectations while not stacking the complexity deck in a way that almost assured failure of some or all of the project’s components.

Systems implementations have come of age.The change was a pivot from assessing a project’s ROI from a single go-live moment to a period of time with defined phases that can all be successful in a logical progression. This new mindset rocketed the concept of ROI forward, redefining it as an escalating ROI, which is realized through a plan that achieves respectable results with a limited project scope and then builds step-by-step upon that starting point.

There are two important concepts in designing a project using this framework:
  1. Increase the number of phases. For example, you could shift from a year-based to a quarter-based duration. This is key to achieving user buy-in. Too many times users have been promised functionality in the next phase, but that phase may not happen as priorities shift, leaving them high and dry.
  2. Simplify the scope of each phase. This way, an ROI slope can be established where each phase’s go-live results in a move up the ROI meter. This allows the organization to not only taste success, but also have a means to immediately follow up on that success. It recognizes that comfort with the system will increase ROI over time as users become more adept and efficient, giving them a new base of skills to build upon at the end of each phase.

Cloud-based technology enables escalating ROI
While most organizations want to avoid a big bang implementation, the need to meet a huge one-time ROI often results in just that — an overbuilt, configured and customized solution with little guarantee that it will be embraced by the user community, especially when it is pushed on them all at once. To modernize the systems implementation process while reducing risks and costs, a new type of transformative technology must be used.

The introduction of cloud-based technologies is what has enabled ROI to rocket forward in reality. The reason is that some of the largest costs of an implementation are software licenses and the associated infrastructure — before a project team has its first meeting, these costs set a high hurdle for achieving the desired ROI. As a result, the temptation had been to create an outsized list of quantifiable expected benefits that is in proportion to the enormous costs. The natural response was to overbuild and run the risk of unneeded costs.

The organization moves into a world of continuous improvement, and
the shorter time frames mean the project team has a higher probability of remaining intact.
Cloud-based technologies can significantly reduce the initial cost hurdle, allowing the project to reduce scope and avoid needless complexity. As a result, the focus is truly on ROI. If upfront costs are slashed, then the build effort can be reduced and an appropriately sized ROI can be achieved. This simplification dramatically reduces risk and increases user buy-in, while also allowing the organization to understand the technology’s possibilities without overcommitting.

Furthermore, quicker success will enable immediate follow-up and additions to the solution. Phase two is no longer next year, but becomes next quarter or even next month. As a result, the organization moves into a world of continuous improvement, and the shorter time frames mean the project team has a higher probability of remaining intact.

How technology choices can reinforce the concept
To reinforce the concept of an escalating ROI path aligned with technology, let’s look at it like building a rocket. The old project model required assembling the rocket to achieve a specific ROI. This rocket would be built on a specific custom launching pad and would be of sufficient size to reach the designated altitude (ROI). However, this approach was costly and risky — the rocket needed a large amount of fuel (resources), and the smallest spark could cause it to fail at any point. The time and cost for each launch or project phase created an environment where there was truly one shot for success, resulting in a bloated rocket trying to achieve unrealistic heights.

Shifting to a cloud-based, escalating ROI model is a major breakthrough. The rocket here is designed to support multiple missions, with each stage able to propel it further. A single liftoff followed by a quick stage release enables earlier recognition of ROI. It also ensures the rocket is manned by individuals who are consistently improving their skills and knowledge along the way, which will be critical to success in later and more complex stages.

The key is recognizing that it is a journey rather than a single launch.Conclusion
Of course, every organization will define their rocket differently — for example, some will be three stages while others will have five. The key is recognizing that it is a journey rather than a single launch.

Download the PDF