Many global companies are using business transformation initiatives to meet changing market needs. Implementing large IT programs is a key component of these change initiatives. Given that the failures of such programs are now commonly discussed; a recent McKinsey/Oxford study highlights that the failure rate of such programs is indeed more often. According to the study, half of IT projects with budgets of over $15 million dollars run 45% over budget, 7% are behind schedule and deliver 56% less functionality than predicted. What should organizations do to mitigate failure of such programs, and successfully implement their program?
Most IT programs struggle during the initiation phase since key program management activities are not completed to effectively start the program. This leads to longer startup times and missed budget targets, even before the program begins. The model outlined below contains the key activities that need to be completed during Program Initiation.
Figure: Program Initiation Model
All programs must work within the guiding pillars of Program Management – Mission, Time, Budget, Resource and Governance. Outlined below are the key activities that need to be completed during the Program Initiation phase.
Mandate – This is one of the key activities without which no other activity can begin. It provides the blue print for the entire program and all key decisions thereafter are based on the mission and objectives of the program. You can compare this to a country’s constitution that outlines the fundamental principles of the program. The mandate should include business case, project justification, high-level requirements and success criteria.
Time Management – This process is a crucial part of any successful project. Without careful time management, projects are set up to fail. This process organizes the team to meet deadlines by defining activities, estimating the durations of activities, scheduling activities and ensuring adherence to the schedule. All programs must have the following activities completed:
- High-level Roadmap – provides a framework to help plan and coordinate the program. The key objective is to provide consensus within the project teams and stakeholders on how the Program is going to achieve its goals in a timely manner.
- Development Approach – In this activity the Software Development LifeCycle (SDLC) development approach, such as Waterfall, Iterative, Agile needs to be identified.
- Estimation model – the estimation model for the program need to be identified since it is used as an input to project/program plans and budgets.
Budget Management – This Process is involved in estimating, budgeting and controlling costs to complete the project within the approved budget. It requires that managers create and managed the budget effectively to yield maximum profitability.
- Financial Management – This activity provides the processes and the financial checks and balances required for the program to meet its financial commitment.
- Contract Management – The activity includes the legal framework to engage with its clients, vendors and suppliers.
Resource Management –This process manages the most crucial aspect of the project – its people. This area ensures efficient and effective deployment of an organization’s resources to achieve the program’s objectives.
- Resource Management – defines the processes for resource estimating and deployment. This activity ensures resources with the right skills are available as per the timelines in the Program Plan.
- Stakeholder Management – this activity includes identification of stakeholders and managing them to align with the program and business objectives. Communication is an important factor in stakeholder management.
Governance – This process establishes structured communications throughout the levels of organization and assures that the organizational strategy, mission, vision, and desired outcomes are aligned within the Program mandate.
- Governance – this activity defines the governance structure and decision making responsibility within each team.
- Change Management – each program needs to define a baseline and any change beyond that needs to go through the Change Management process. The Change Management process needs to be identified early on so that teams understand the baseline and change management processes.
- Risk Management – this activity defines the processes for identification, prioritization and mitigation of risks.
Program Kick-off – All the above processes have to be completed before Program kick-off since they are very tightly interrelated to each other, for e.g. Budget management ties into time management, because in order to ensure that the project is completed on budget, it also has to be completed on time.
The program kickoff meeting is scheduled for introducing the members of the project team (including clients, stakeholders, employees, contractors and external vendors) to the program mandate, the program roadmap/plan, and the roles of the team members. This is essential to align the program team on the program objectives.
The program initiation model outlined above ensures a successful program start-up and gives a solid head start in achieving your program objectives. These critical steps will prevent program startup failures and provide a higher rate of successful program execution.
Would be happy to hear your views on other areas that need to also be focused during the program initiation phase!
The article was originally published on IT Business Edge on March 7, 2014 and is re-posted here by permission.