Transformation programmes

a PMO insight

Abstract

The reasons why transformation programmes fail have been well documented in the literature but, despite this, they continue to fail to meet their objectives and to deliver the benefits that were expected of them.

Regardless of a transformation programme's specific objectives, strategic change is usually painful to manage, demanding on all those affected and, frequently, defining senior management's destiny to sponsor the programme and committed to delivering its benefits.

Most transformation programmes generally go over budget, overrun their schedules and, if completed, leave defects or inadequacies post-implementation. Even if programmes have delivered to these parameters of cost, time, and quality, transformation objectives and business benefits may still not be achieved.

Introduction

This paper will explain why strategic transformation programmes fail, the different program strategy approaches required by these kinds of programmes, and the key success factors and pillars of a transformation program observed from a PMO (project management office) insight.

The information will argue the thesis that the root cause of all failed transformation programmes lies in a fundamental imbalance between the ability to transform the attitudes and behaviours of individuals in an organization to deliver a common vision (i.e. Change Management) and the logical organization of tasks and activities required to be completed to deliver a defined output (i.e. Project management). What is required is a different attitude that could be summarized in two words: programme management.

From my experience, a transformation programme requires a different approach and attitude that should not be underestimated. Applying the right mindset from the beginning will help avoid the pitfalls and useless recycling of work.

Transformation Program Failures

Reasons Why Strategic Change Programmes Fail

The are many different reasons why transformation programmes fail: inadequate sponsorship and lack of active commitment from top management; poor scoping and definition of the programme, insufficient attention to quality; failure to monitor cost and benefits; inadequate coordination of resources, planning, and scheduling; lack of communication and stakeholder engagement; and, the failure to monitor and manage risks.

Underlying all these reasons, there is always a single theme: a bad risk management approach. The responsibility for independently monitoring programmes is generally not clearly defined. People within companies are, naturally, primarily concerned with ‘business as usual’ activities and often have no clear mandate to be involved in transformation programmes from their inception.

Failed Programmes Root Causes

The root cause of all failed programmes lies in a fundamental imbalance between the ‘art’ of change leadership and the ‘science’ of project management.

Central to this imbalance is a predisposition in most organizations to allow the logic, rigour, linearity, and analysis underpinning the typical programme approaches to hold dominion over the more intuitive, emotional, and psychological ‘softer’ factors that are instrumental in transforming behaviour.

Transformation Program Strategy Approach

Program Approach Mindset

One of the reasons why programmes fail could be an incorrect approach to managing programmes. It's fundamental to understand that there are differences between project management and program management.

First, a program manager's role requires different skills, in the sense that he or she should look at and attend to analysing a situation in a way that differs from that of a project manager. The program manager should have a proactive attitude in understanding the details of the customer's perspective.

Program Managers have a different “attachment” in relation with their work compare to project managers. Since a program manager is generally more committed to the delivery of organization-wide and external outcomes compare to a project manager's attitude towards deliverables, his ability to disconnect from his work is a required skill in order to have a better work-life balance.

Second, the program manager's inclination to make decisions and act, either in response to circumstances or to influence them, should be different from those of a project manager, because a program manager should be more opportunistic, with the natural abilities to reshape, reconfigure, and realign situations.

And last, but not least, program managers deal with multiple components and have higher responsibilities beyond their formal role boundaries, so they should have a natural attitude in positively considering conflicts in order to integrate divergent interests.

A program manager's ability to relate to and deal with stakeholders requires him or her to be a real leader and influence them.

Compared with a program manager, a project manager should have a more creative attitude in order to resolve controversial situations and should be perceived as a person capable of adding value when finding a solution to a problem.

A program manager should be an excellent coach with a natural aptitude for investigating, and asking the right questions, at the right time and of the right stakeholder.

Last, but not least, a program manager should have a natural ability to use all possible resources without generating any “burn-out” effect.

In the end, a program manager should have a different comprehension of the program environment in the sense that he or she should always be able to adapt to changes, have a deep understanding of organizational constraints, a proactive attitude toward risks in order to avoid them, a particular sensibility to every aspect of communication, an ability to reshape scope in order to intercept emerging benefits, a deep understanding of timing, and the ability to auto-fund program costs.

Transformation Program Strategy Approach Guidelines

There are some guidelines that should be followed to define a transformation program strategy and it should be contemplated in three phases: Assessment Phase, Fit Gap Analysis, and TO BE Model Definition.

Assessment Phase

First of all, an assessment phase in order to set the baseline for change. For doing this, it is indispensable to have a reference model to use as a benchmark while defining the TO BE model; without it, everything will become ineffectual. Changing the reference model would mean restarting the assessment phase almost from the beginning.

The purposes of reference models are to:

  • understand which business process model to adopt and set the functional framework
  • define offer drivers and the objectives of offer evolution and simplification
  • define an end-to-end solution architecture that has to consider all and only in scope systems aiming to understand how to integrate the program with business as usual projects
  • map requirements to process framework
  • define business case objectives and priorities

Fit Gap Analysis

Second, a scope consolidation approach should be defined. Here there are numerous possibilities: adopting a bottom-up approach versus a top-down approach. Another choice could be to decide to build everything from scratch, ignoring, in the conceptual phase, the AS IS environment constraints and postponing their evaluation to a fit gap analysis that should aim to verify that the core activities of the AS IS are not missed.

The purposes of the fit-gap analysis are to:

  • identify business process gaps
  • assess current offers in order to identify simplification candidates
  • simplify requirements findings
  • review business case comparing costs with benefits

To Be Model Definition

Only when the fit-gap analysis is complete can the TO BE model be defined.

The purpose of the TO BE Model Definition is to:

  • define the TO BE process model and TO BE use cases library
  • define the offer consolidation requirements, simplification plan, and migration strategy
  • define the roadmap and approve the solution blueprint
  • define the requirements simplification and consolidation plan
  • finalize the business case

Another important aspect of every transformation program should be to learn from mistakes. Here, the lessons learned, more than in other situations, are vital for adopting a “continuous improvement” approach. In this phase, it is essential to better understand the current root causes that led to the current critical situation and identify pragmatic directions on how to address them.

In order to succeed in a transformation program, a different approach is required compare to projects. More than over a different mindset is required compare to project management

First of all, the program objective should be to organise and coordinate a ramework rather than to concentrate on delivering a specific output.

Moreover, a program should be embedded within organisational processes and developments rather than be considered a self-contained initiative; then, it has to be accepted as an indefinite horizon rather than a fixed duration. Within a program it is normal to evolve in line with needs and opportunities rather than having fixed objectives. Within a program it is required to manage multiple related projects or deliverables rather than a single deliverable.

Last, but not least, programmes are focused on benefits and/or strategic goals rather than on delivery.

In addition to a transformation program, something more is required: the change acceptance.

First of all, change, and even simply the prospect of change, create insecurity and confusion and is more often met with resistance, suspicion, or hostility than with open arms.

People must be led, day in and day out, through change; they must be inspired to change, to see the benefits of changed behaviour, and to contribute to the nature of the changes being made before they will even consider “buying-in” to the change programme. In secundis change does not just happen; it must be led. The PMO may not be able to control the environment in which our organizations operate but it can control the way we adapt to it behaviourally.

Last, but not least, constants are the most important factors in behavioural change. Things such as common vision, purpose, need for change, and the common principles that apply to decision-making are the ‘guiding lights’ that steer us successfully through change. In their absence, change can become directionless and lose momentum.

Transformation Program Key Success Factors

The four key success factors of a successful transformation program are as follows:

  • Business engagement
  • Simplification
  • Strong governance
  • Proven solutions

Business Engagement

Business engagement underlines the need to socialize transformation objectives within all senior stakeholders and an immediate participation of business to clarify scope and objectives and to manage expectations and early acceptance.

Simplification

This means that leadership is required to be business processes definition and pragmatic simplification within the Fit/Gap based approach. It is required to minimize inheritance of actual systems complexity via a simplification process, thereby avoiding equalization.

Strong Governance

A change management is required to set and commit a clear baseline: scope, plan, and budget in order to maintain a strong focus on a key program pillar.

Proven Solutions

Finally, the key success factor is based on adopting proven solutions. Key partnerships and collaborations with the technology department, system integration providers, and technical experts are required in order to strengthen critical touch points (interfaces, integrations, etc) that characterize a transformation programme.

Transformation Program Pillars

Business Transformation

A real business transformation doesn't impact one department only but the whole company—it is not only an IT systems enhancements or systems integration, but these are considered enablers. Business transformation should be a visible change within customer experience, modifying how the end user interacts with the company and how the company offers products and services to him or her.

Within business transformation activities there should always be a business processes consolidation aiming not only to scope consolidation and simplification. This means that this activity should lead to identifying areas of scope to work at de-scoping and simplifying in order to avoid scope creep.

Business Transformation Approach

A business transformation approach should be based on the following pillars:

1.  Business Processes Assessment

2.  Products/Services Catalogue Assessment

3.  Solution Definition

4.  Organization

Two different approaches can be used for setting the reference model pillars: incremental and iterative

The Incremental Approach

  • Business process will be defined as having a high adherence to existing processes with bottom-up requirements based on AS-IS.
  • Optimization/simplification of current processes will be obtained by the subsequent Fit/Gap analysis.
  • Offer rationalization will require activity for product migration (cleansing of obsolete or non strategic products).
  • Offer simplification will imply that the product catalogue converges with the new offer proposition
  • Technology solution will be tight coupled with phased integration of new legacy systems, and partial replacement will require business transformation to solve architectural constraints
  • Organization will keep going with adaptations.

The Iterative Approach

  • Business processes definition will be solution driven: compliancy with user requirements will be based on the TO BE solution. This approach requires a mature knowledge of “to be” potential.
  • TO BE business processes will be derived from to-be solution and reference model with an iterative approach.
  • This approach will require a complete new offer proposition.
  • Technology solution will have an end-to-end empty stack and pre-integrated solution, and the evolving architecture has lower dependency on legacy systems.
  • This approach could potentially require a new organization of business units.
  • Approach could be an option but will require a different governance approach.

In reality, according to the Latin, “in media stat virtus” id est the right approach would consider a mix of the two.

PMO Role within a Business Transformation Programme

In order to be successful is hardily suggested to establish a PMO that will be focused on outcomes.

The PMO will have a portfolio view of the programmes under way at any one time in order that investments can be prioritized and trade-offs made in order to ensure that their aims are in line with overall corporate objectives.

The PMO will be not only the creator but also the guardian of all the standards that need to be in place for programmes to operate effectively. These will include, for example, standard reporting, governance standards, and standard management processes.

The PMO will ensure that the right people are assigned to the right jobs, and the appropriate blend of skills and knowledge is made available.

The PMO can also operate as a vehicle to make sure that the skills and training are made available and that best practices are disseminated throughout the organization.

Last, but not least, the PMO assurance role will be critical to ensure that programmes are given the maximum opportunity to deliver the benefits they were designed to achieve. This role will be executed by adopting a stage-gate approach to the key areas of the programme to be reviewed, which include: strategic alignment, business case, funding, implementation plans, stakeholder support, progress to date, and quality of plans for the next stage.

Conclusions

Risk Management: A Different Approach

Typically, programmes in order to define a recovery strategy plan, programmes will start with a risk assessment involving many stages, considering a cyclical loop of testing, review and audit, and a maintenance plan. This approach will require much positioning and continual buying-in and re-energizing.

In order to end this eternal cycle, a different approach is needed, which actively engages the organization at a senior level from the outset and gets the decision makers to understand the issues, take ownership of them, and be aware of what their roles and responsibilities are.

Solution: A Different Approach

Also, the solution approach is expected to be different from projects. In order to be successful, business transformation programmes should balance a waterfall approach with an iterative one, depending on the momentum.

The Waterfall Approach is characterized by:

  • Not iterative development
  • Strong phase containment
  • Review and sign-off workshops are used to review deliverables in detail
  • Contingency for re-work not planned as part of the approach

The Iterative Approach is characterized by:

  • Iterative development
  • Analyse, design, and build deliverables are reviewed and refined through the Fit Gap process
  • Strong collaboration and involvement of company resources are required through Design and Build
  • Re-work is planned in as part of the delivery approach for Fit Gap
  • Leverage remote collaboration during all phases

Six Basic Rules

Six basic rules could be defined in order to succeed in a transformation program:

1. Change Management

Change agents should orchestrate the transition, taking into account the behavioral aspects of change. Change agents should have the authority to stop and start projects, to control the pace of implementation and the pattern of program plans according to the behavioral aspects of change.

2. Alliances

If this coalition cannot be established, the program is more than likely to fail. No detailed planning should be undertaken until this coalition is established.

3. Risk Management

Change implies uncertainty. Uncertainty undermines people's sense of security; for this reason, ‘constants’ need to be clearly established to guide the organization through change.

Constants are, for example:

  • An understood rationale for the change
  • A clear vision
  • A decision-making principles and priorities set
  • Quick wins to underpin the benefits of behavioral change and reinforce its central purpose

4. Roadmap Definition

It is important to understand that program milestones should be assessed, keeping in mind that tactical points along the plan will shift due to stakeholders changing their minds, which means that a continuous commitment will be required at milestones.

5. Key Stakeholders Engagement

Individuals will never change their behavior simply because they are told to do so. They need to understand why they should, what the benefits of changing may be, and then they need to be included in determining what the new behaviors look like. Open and continuous dialogue will be required.

6. Environmental Variables

Close attention should be paid early on to intercept the early warning indicators of program failure (e.g., inspiration and motivation toward vision, understanding of program goals, trust, shared approach, and schedule acceptance).

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2012, Giorgio Difronzo, PhD, PMP, PgMP
Originally published as a part of 2012 PMI Global Congress Proceedings – Marseille, France

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