Friday, 23 March 2007 03:18

Reducing the Trend of Failed Business

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Change is the norm; fierce competition is the driver, and lean thinking is the latest call to action. Organizations in both the public and private sectors are struggling to not only react to the velocity of changes in the economic, political and global landscape, but also to proactively stay ahead of the curve. Organizations bring about change through programs and supporting projects. Projects play an essential role in the growth and survival of organizations today, for it is through projects that we create value in the form of improved business processes, and new products and services as a response to changes in the business environment...

To manage change effectively, organizations need to be good at: (1) establishing business strategies and goals, (2) identifying new business opportunities, (3) determining solutions to business problems, and (4) selecting, prioritizing and funding projects to implement major change initiatives, and thus meet business needs and achieve strategic goals. The major change initiatives that transform businesses may be:

 

  • Business process improvement and/or re-engineering ventures to replace inefficient and outmoded legacy business processes and technologies.
  • Significant change programs to continually tune the organizational structure, capabilities and competencies as the business model changes.
  • New lines of business requiring new business processes, organizations, and technologies to support the new operations.

Since data and information are the lifeblood of virtually all business processes, information technology (IT) systems are often a major component of these large change initiatives. As organizations depend more and more on technology for business communications and operations, software-intensive IT projects are becoming more and more essential to turn an organization's vision and strategy into reality. Executives across industries and in the public sector have their eyes on the portfolio of business change initiatives and the supporting IT projects to ensure that they: (1) invest in the right mix of projects, (2) develop expert capabilities to deliver flawlessly, (3) allocate their scarce resources to the highest priority projects first, and ultimately, (4) capture the added value to the business that was expected.

How Well Do We Execute Business Transformation Projects? What is the track record for completion of complex business process changes accompanied by software intensive IT systems? We have an abundance of surveys that have been administered during the last decade revealing the rather dismal record of project performance, particularly for significant IT projects. The StandishGroup 2004 Third Quarter Research Report exposed the difficult nature of managing IT projects today: 71% of projects were challenged, meaning over time or budget; or failed altogether, meaning nothing of value was delivered to the organization.1 A public sector source of equally illuminating information is from the U.S. Government's Office of Management and Budget (OMB), the federal government agency that evaluates the effectiveness of federal programs, policies, and procedures, assesses competing funding demands among agencies, sets funding priorities, and approves funds for major capital projects. This OMB March 26, 2003 study stated that 771 projects included in the fiscal 2004 budget - with a total cost of $20.9 billion - were at risk. The conclusion: the high cost of failure is unsustainable. As a result, the Federal IT Project Manager Initiative was chartered to raise the capability and maturity of project management for major change initiatives in the Federal Government.2

What is the Root Cause of Failed and Challenged Projects? What is the cause of this very disappointing record? It is almost certain that there is no single cause of the persistent state of troubled projects. However, there is a growing notion that poor requirements engineering is one of the leading causes of project failure. Requirements are hard to get right, especially for software – very hard. It is becoming clear that business system development must be treated as a specialist discipline, implementing requirements formed through good requirements elicitation, documentation and management techniques. Existing requirements engineering approaches, methods and tools simply don't deliver the results that are vital for the success of organizations both public and private. As businesses across the globe rely on successful business transformation projects with critical IT components for their very survival, the stakes are too high to continue in a business-as-usual mode. The question is: what can we do to begin to reverse the trend of failed projects? In a response to the belief that more rigorous attention to requirements management will add considerable value to project team effectiveness and greatly improve project performance, business analysis is emerging as a valued business competency.

Business Analysis: An Emerging Profession In their quest to build the organizational capabilities to select, prioritize and manage projects, organizations have discovered that the core competency of business analysis must be elevated in importance, developed, supported and matured. Most organizations have invested handsomely in innovation and new product development projects, and in IT systems to help operate the business and capture business intelligence about the marketplace. Indeed, over the last ten years or so, organizations have begun to embrace the practice of professional project management. However, businesses and government agencies are just now beginning to understand the importance of the capabilities needed to identify strategic business needs to operate effectively and efficiently, and to act on those needs expeditiously. Those who acquire and master business analysis competencies will more effectively react to and pre-empt changes in the marketplace, flow value through the enterprise to the customer, thus remaining competitive.

The Business Analysis Professional The International Institute of Business Analysis (IIBA), founded in 2003, is an organization dedicated to advancing the professionalism of the business analysis occupation. The IIBA is the independent non-profit professional association serving the growing field of business analysis. The IIBA membership consists of individuals with various titles and filling a diverse set of roles - requirements engineers, systems analysts, business analysts, requirements analysts, project managers, technical architects and developers, and consultants - anyone involved in analysis for systems, business or process improvement. 3 The IIBA has developed the Business Analysis Body of Knowledge (BABoK) for the profession. The IIBA plans to work continually with practitioners around the globe to upgrade those standards through education, research, and the sharing of effective tools and techniques. 4 In addition, IIBA is developing a Business Analyst Certification Program, unique to the profession of business analysis. Establishing a certification for business analysis will go a long way in standardizing and professionalizing the practice of business analysis. The Certified Business Analysis Professional exam is offered in North America in 2007, with an international launch in 2008. The certification will create common expectations on the part of organizations for the knowledge, skills and competencies acquired to become a Certified Business Analyst.

 

NOTES 1. The Standish Group International, Inc. (1999) Unfinished Voyages, A Follow-Up to The Chaos Report. Retrieved Apr. 08, 2005, from The StandishGroup Web site: http://www.standishgroup.com/sample_research/unfinished_voyages_1.php.2. Federal IT Project Manager Initiative retrieved December 27, 2005http://www.ocio.usda.gov/p_mgnt/doc/CIO_Council_Guidance.ppt#425,1,Federal IT Project Manager Initiative3. International Institute of Business Analysis home page http://www.iiba.com/ retrieved December 21, 20054. International Institute of Business Analysis, Business Analysis Book of Knowledge draft version 1.4http://www.iiba.com/pdf/BABok_Release_1dot4_2005Oct27.pdf retrieved December 21, 2005

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Kathleen B. Hass, PMP

Principal Consultant
Kathleen Hass & Associates, Inc.
Email: kittyhass@comcast.net
Website: www.kathleenhass.com

Kitty is the world’s leading expert in strategic business analysis and complex project management. She has written dozens of articles and nine books, including the renowned series The Business Analysis Essential Library; The Enterprise Business Analyst: Developing Creative Solutions to Complex Business Problems; and Managing Project Complexity: A New Model, which was awarded PMI’s David I. Cleland Literature Award. She is a director on the IIBA board and is on the BA advisory boards for Capella University and the University of California, Irvine. 

 

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