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Five things your CEO should know about your IT transformation programme

Sebastian Jammer | May 28, 2012
Companies that are able to leverage IT effectively can realise cost savings and revenue upsides, while gaining market share over competitors.

For the definition of business objectives a cross-functional team consisting of representatives from business and IT can work-out a business case for the programme. The business case has to show a sound return on investment and is based on the team's benefit assumptions and commitments.

Case in point: A mobile network operator was planning to renew its CRM as well as its data warehouse and analytics systems. Before even starting the design phase of the programme, the IT steering committee comprising the CEO, CMO and CIO put together a team consisting of IT, product management, sales and call centre management representatives. This team agreed on the outcomes and KPIs that were driven by the IT programme such as improved campaign efficiency, reduced call centre handling time and reduced time-to-market. These KPIs were translated into a financial model and paired with the projected programme cost to justify the investment. All team-members committed and signed-off on the expected outcomes and the steering committee even used the resulting business case to justify the investment with their shareholders.

The joint commitment to business outcomes creates buy-in and supports cooperation between the different teams during later stages of the programme. Decision-making becomes easier if teams are focused on a common goal.

A common pitfall with business objectives is that companies define them, but they are not disciplined to adapt them to scope changes or they don't sustain until after project completion to measure the business result – a result that becomes available only weeks or month after final acceptance.

CEO Focus
The CEO should ensure that a business process and organisation review is established as a driver for the technology transformation. Business users should be assigned with key roles in the transformation programme – possibly even the commercial programme leadership.

The CEO can facilitate in the board of directors to set-up a cross functional team to define the business objectives of the programme. Once completed, he can challenge the business objectives and ensure they are aligned with strategic goals. The CEO should release funds only after business objectives are agreed and committed and the business case is sound.

Teams have to be held accountable by the CEO for the achievement of the business objectives besides the delivery of the programme on time, budget and quality.

Move Inch-by-Inch Towards the Larger Goal
Many IT transformation programmes span over a long period of time of up to five years to complete. This is due to the large size and complexity and high ambition level of stakeholders. The problem with this long duration and large scope is on the one side that business requirements tend to vary and even invalidate after such a long time frame. Hence the delivered IT solution might support a business model that is already out-dated by the time it comes life and miss the respective expectations. On the other hand, the sheer scope size and complexity makes it very hard to manage such programmes, even for very experienced teams. Timelines tend to slip and cost budgets overrun significantly as a result.

 

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