Using business goals as a marker for success
It’s the only question that matters when it comes to projects – did it succeed? But ask most stakeholders what success means and they’ll answer in terms of whether it was on time, on budget, and included the features that were originally scoped out.
And none of those things matter.
Answering the question about whether a project succeeded requires consideration of whether it achieved its business goals. Did it generate a return on investment? Did the project deliver a solution to customers (internal or external) that added value? And was that value significant enough to justify the investment that was made – the financial, effort and opportunity costs involved in achieving that value?
Companies know that those are the measures of success that matter, yet very few of them actually focus on them. Why? Part of the answer is that it’s hard. Also, it can take a long time to see evidence of whether that value has been created. But a large part of the issue is simply that they’ve always measured those vanity metrics of time, scope, and budget. Those provide a sense of things going well (albeit a false one) and they are easy to measure and report on.
As a result, projects are consistently failing – 11.4% of project budgets are wasted according to the latest PMI Pulse of the Profession report. No organization can afford to throw more than one dollar in every nine away, especially in these challenging times. Every dollar invested has to generate the best return possible, and that only happens when we monitor and manage that value creation process.
Organizations must spend more time ensuring benefit projections in business cases and proposals are realistic. They must include details of how that value will be measured, using proxies where actual value measurement will take too long. Then projects must be delivered with a focus on ensuring that the ability to deliver meaningful value is being maintained at all times. Making changes to projects to remain aligned with the triple constraint is not only a waste of time and effort, it’s often the exact wrong thing to do for value creation.
After projects have delivered there has to be meaningful measurement of the previously defined metrics to validate performance, and aggressive variance management must occur when reality falls short of expectations. Critically there must also be accountability for that value delivery – or lack of it, because that’s the only way long term return on investment will improve.
Optimizing value from project investments has always been important, today it can be the difference between survival and failure. At ServiceNow we’re committed to helping companies deliver that value and we have a webinar on September 30th where we explore these concepts in more detail and provide practical guidance to hep you improve your value metrics. Register here and start the journey to success.
