Getting technology projects past their C-suite colleagues is an uphill task for chief information officers (CIOs). It is often hardly about the technology and mostly about the bottom line.
The main hurdle in selling information technology (IT) projects to chief executive officers (CEOs) and chief financial officers (CFOs) is demonstrating the return on investment (ROI).
“Most IT projects are about heavy and long-term investment. The major obstacles are normally the uncertainty of the future, and whether the project is market-driven or technology-driven,” says Rosemary Chan, a consultant at US-based investment bank Morgan Stanley Asia. She is a seasoned IT executive with more than 25 years experiencing in managing turnkey data centre solutions. In any discussion with C-level executives about project management, you should take into account the comprehensiveness of due diligence, cost with options and timing, she explains.
Economical Solution
When illustrating an IT project’s ROI, the stakeholders’ returns should be considered from both financial and non-financial aspects. So says Iswaraan Suppiah, head of group information and operations division, CIMB Group, a Malaysia-based investment banker.
Suppiah says he usually demonstrates to the C-suite that it is an economical solution comprising the following ‘DNA’: Enabling—that the project is in line with the group’s vision and helps achieve the group’s agenda in the mid-and-long term; Efficient—the project must exemplify how the enabling solution optimises cost to service and cost of utilising the resources, a demonstration of the best use of time, people and money; and Effective—it’s essential to show how the IT team can execute the project effectively to achieve the intended objective.
Making tactical decisions is the hardest type of work in IT project management, adds Chan, as this involves not only long-term commitment, but also heavy capital investment.
When CEOs and CFOs oppose IT projects, they usually put forward reasons such as market uncertainty and the lack of assurance that the decision made is the best one, she says. “The strategy to overcome this is to ensure all options, including the impossible options, have been reviewed and studied, together with detailed risk analysis.”
Language of CEOs
James Loo, CIO of Singapore-based logistics services provider YCH Group, says CIOs have to do better to find ways to present their cases in the language of CEOs and CFOs: “We might have created our own obstacles unknowingly.
“While my project managers can present their plans to me as IT projects, my presentation to my CEO and CFO will always be a business project. Only when there is a specific request to answer some technology questions, would I put such details into the appendices for their reference and even then, in summary or in a very condensed form.”
In any discussion with CEOs and CFOs about project management, Loo focuses on presenting the project results, rather than details at execution level, because their key interests will be on the business and money at both the top and bottom lines.
“For example, they are not interested in moving a project into UAT [user acceptance testing] except to know that you have made progress. But if we present this milestone as another one month from cutover, which means in another month we will start seeing an improved cash collection process for the business because manual billing is eradicated, then they will want to know. They may even ask if the UAT can be shortened for an earlier cutover and what additional resources from finance is needed.”
When CEOs and CFOs oppose IT projects, the key concerns are usually cost-related, the certainty of payback and the strategic impact on business—“especially crucial issues affecting the industry that the company needs to stay ahead of, or at least not be left behind and pushed out of business because of compliance issues”, says Loo.
“I have shared how we can change our reporting to dollar terms on our project milestones. It will be difficult initially. We may have to approach this in two steps. I propose starting with reporting both in terms of project phases by activities and then associate each project phase with the corresponding budget and actual cost figures.
“Basically, they need to know that you have control over the project and can manage it well, both in terms of work and finances.”
Only Reason
Loo’s mantra: “The business is the only reason for IT and our projects, so make it [IT] work.”
To ensure robust project management, it is essential to have procedures, frameworks and reporting mechanisms firmly in place to ensure an effective and successful delivery, says Suppiah. At CIMB, the project management office comes under the umbrella of the transformation office, which is under the purview of the CIMB’s CEO, under the operations and technology division.
The hardest type of IT projects to argue, says Suppiah, are investments that have no identified short-term financial payback but instead deliver the enterprise architecture with long-term growth for the business.
As such, the IT shop needs to dive into the qualitative assessment which is generally more subjective. “Apart from investments with no direct ROI impact, cross-border projects are also a challenge as they may carry issues such as regulatory, staff redeployment schemes and others,” he says. Also, exercise proper project governance and control to ensure they are effectively delivered with the objectives and performance targets in mind.
“It’s of paramount importance to create awareness of the organisation’s overall strategy,” says Suppiah. “It is only with such groundwork that individual IT projects will be justified, especially projects that involve enterprise architecture which usually do not bring forth immediate financial investment value.
“Always perform post implementation reviews to gauge benefits realised. These reviews can also serve as a platform for training employees in developing skills, knowledge and experience. By establishing such a platform, organisations can then build their own capacities to achieve sustainable performance improvement.”
The 'Wow' Factor
Suppiah advises that IT projects should be simplified with clear positive customer experiences.
“For a financial institution, customer centricity is of utmost importance. Thus, all project submissions should include not only ROI, but also positive customer experience.” This is sometimes a concern that the CEO and CFO raise when disapproving IT projects: “the lack of the ‘wow’ factor.”
The best strategy to present IT projects for approval, Chan advises, is to allow sufficient time for socialisation. “Socialisation should be for all levels,” she says.
“Patience and respect” are the best way to approach challenges and obstacles in the course of project management. “It’s important that you respect objections and opponents because they give you ideas. No one is a superman or a superwoman, because project management is team work.
“Be passionate about what you are doing. Respect and enjoy your profession,” Chan advises.
Chan won the ‘IT Project Management Award’ of the Hong Kong Computer Society’s Outstanding IT Achiever Awards 2008.
NGO Issues
As for non-governmental organisations (NGOs), the lack of revenue streams has been the major obstacle when presenting IT projects to senior executives.
“Everything comes from donations or a modest government subvention,” explains Raymond Cheung, assistant IT manager at Heep Hong Society. Heep Hong is a Hong Kong-based charitable institution that provides education for children with special physical needs.
“Over the years, we’ve learnt that the upfront cost is often the smallest part of the total investment. The management and maintenance of IT systems, upgrading software and replacing hardware components often add up to far more than the initial sticker price,” says Cheung.
Timeframe, customer satisfaction, and cost are the top three things that Cheung includes in discussing project management with his senior executives.
“Everyone always wants to complete projects as quickly as possible, regardless of the given timeframe. At times, some project managers are tempted to compress things a little, but that can be a recipe for disaster, inevitably leading to disappointment,” he says.
“As for internal clients, we need a solution that is easy to use, to manage, and that offers excellent performance. Only with stable and reliable IT systems can we provide quality service to the public.”
Sensible Costs
“As a charitable institution, we don’t have a huge IT budget. Therefore the costs have to be sensible in the first place. And, we absolutely have no room for overruns.” In fact, it took only two days for Cheung to implement an anti-virus and anti-spam solution from MessageLabs.
“It required virtually no support from the in-house IT department, and the SaaS [software-as-a-service] model means there is no upfront investment, just a regular fee which is the same as a phone or water bill.”
Cheung finds all IT projects hard to argue at an NGO. The number of failed projects has outnumbered the successes. “At Heep Hong, they [senior executives] want to be convinced about three things. ‘Do we need it? Will it do what we want it to do? Can we afford it?’ If you have good answers for these three questions, you are well on your way.”
