How to implement CPM projects succesfully?

The Standish Group reported in 1994 (the Chaos-report) that a third of all ICT-related implementations failed or were cancelled. Recent research (Ernst & Young) shows that six out of ten ICT-related projects go wrong, despite the fact that organizations have learned to work thematically and Prince2 has been generally accepted as the project management methodology.

That many CPM-implementation projects do not deliver on time, within approved budget and expected quality is no surprise to me, what is more surprinsingly is the fact that the problem is seen as a managerial problem (Prince2). I believe that the main problem is caused by a lack of understanding of the impact and preconditions of any kind of ICT-implementation project. The characteristics of any ICT-implementation project is that they are once-only, commitment sensitive and that they have a major impact on the way 'things are done'. In our CPM practice we do not soley trust on Prince2; we also believe that for a successful implementation the client has to go through different stages of what we call the 'Implementation Compass’.
The Implementation Compass is based on the following four parts: the house, the clockwork, the clockface and the direction indicator. Leadership is 'the house' for every implementation project. It is the basis for present and future success. Leadership has to be present in every stage of the implementation project. Without leadership the project will surely fail. Program management is the clockwork. It connects the house (leadership) with the clock face (the position within the implementation project). The clock face dictates the position within the implementation project. It gives the steps that have to be taken. The direction indicator shows which activities per stage have to be undertaken by the client. A short summay of the Implementation Compass is given below.

Leadership is not the same as project or program management. Leadership exists out of a number of steps that are necessary to realize change succesfully. Leadership defines how the future looks like, aligns people with that vision and inspires people to achieve that vision despite the obstacles.

To align Leadership with the four stages of an implementation project, program management can be necessary when the implementation project is strategic or when the change is extensive or has to be achieved under time pressure.

Ambition level (from East to South). The business case has to give a clear answer on what the advantages are, not only measured in financial terms but also in qualitative tems. It should also state the vision on CPM over the next 3 - 5 years. The next step is to test the whole business case on achievability (a sanity check) per year and phase. The last step is communication. Always make sure that everyone involved directly and indirectly is informed on the advantages and expectations (explain the Why and What).

Software selection (from South to West). In this stage it is necessary to measure what the track record is of the suppliers on the short list. How proven is their technology and what is the response time and qualtity of support? And finally always make sure to make profound legal contracts with supplier and internal ICT-department. In these contracts make clear what the tasks, responsibilities and authorizations are for all involved parties. Make also sure what the consequences financially are for all parties involved in the situation of no compliance to the agreement.

Project Organisation (from West to North). The project organisation has to achieve the intended advantages of the business case. The client has to create a task force kind of project team, for every role determine the tasks and responsibilities and appoint champions with enough reputation to get things done.

Implementation (from North to East). Implementation knows the following standard phases. Scope, planning and functional and technical design, building and testing, training and support go-live. During the implementation, configuration of the application management organisation is an aspect that needs special attention. The specific point where you put the "border" between the system-related responsibilities of accounting and those of IT is to a large extent arbitrary and can therefore vary from one implementation to the next, but the key criteria we use are:
1. The faster the response required, the more the support needs to sit with accounting.
2. The more technical the type of issue, the more it needs to sit with IT.

For all stages within the Implementation Compass we have developed multiple check lists that are easy use. We use it as an evaluation tool for CPM implementations, but also as a tool to guide the client through this difficult change process.

Author: Edwin van den Broek (edvandenbroek@deloitte.nl)

What does the P in CPM really stand for?

At the start of any CPM initiative, the future tends to look bright for everybody involved. There is great vision and leadership, major benefits to be achieved, and the best possible software to support the initiative.

After a few months however, the initial enthusiasm usually begins to decrease. Senior executives have new issues to worry about, project team members are swamped with everyday routines, and the software appears to be unable to fulfil all requirements. The project that was so well managed in the beginning is now merely muddling through. New requirements are creeping into scope, the software is being tweaked to the max and beyond, and the original strong vision seems to be long forgotten.

But a few project trips, some executive pep talk, several stiff conversations, and a lot of hard work later, the project is finally ready to 'go live'. All is well that ends well! Or is it? Finance staff now seems to be having a lot of issues getting their data into the new system. Remote locations can't even connect. Producing reports is taking longer then ever before. The system keeps crashing for no apparent reason. It is slowly becoming clear what the P in CPM really stands for...managing the performance of the CPM system.

The first step is usually to perform some stress and performance testing, remove a few obvious bottlenecks and simpy upgrade the hardware. Most of the times this is not enough. As the systems grows over time, new performance issues arise that prove even more difficult to resolve. Improving performance is a war that has to be fought on several frontlines at the same time. More than a state-of-the-art IT infrastructure, it involves hard decisions on the architecture of the whole CPM system, trading off functionality with performance, changes to the process and organization underlying the CPM system, and, yes, some more stiff conversations.

In hindsight it is always easy to explain the poor performance. It usually comes down to taking more time to think things through at the start. Are all the must-have requirements really that critical? What else do we want from the system after the initial implementation? What is the simplest way to start? Why don’t we say goodbye to some of the dysfunctional practices that have developed over the years? These are not easy questions to answer. But answering them is critical to the ultimate success of the CPM initiative.

To end this blog on a positive note: there are a lot of experienced people out there that can help you in answering these questions, and making your CPM future look brighter.

Corporate Performance Management. Not just an ordinary blog!

Let's hope this posting will last a bit longer than the previous two. After all, it turned out not to be that easy to start a blog about Corporate Performance Management (CPM) written by consultants from Deloitte The Netherlands. Just to set everything straight. All the information in this blog is written from our personal point of view and does not always have to match with the Deloitte point of view.

First, let’s do a short introduction on Corporate Performance Management. The definition of corporate performance management (CPM) has remained consistent since industry analysts Gartner Research introduced CPM in 2001. "CPM is an umbrella term that describes all of the processes, methodologies, metrics and systems needed to measure and manage the performance of an organization." More about the definition of CPM can be found in: "Gartner Research, Magic Quadrants for CMP Suites:No Dramatic Movement in 2004". But for now I will not further introduce the concept of CPM. There are a lot of great websites which explain fully the concept and processes of CPM.

At Deloitte the term CPM is not commonly used. Deloitte likes to call it Integrated Performance Management. However I would like to use the term CPM (instead of BPM – Business Performance Management; EPM – Enterprise Performance Management or, like they call it at Deloitte, IPM) because nowadays most people simply use the term CPM. Probably in a couple of years there will be an other definition. We will see.

So, what’s this blog all about. Well, as you all (probably) know at Deloitte we have a great global CPM practice. In the UK and Canada, Deloitte is a visionary and leading partner with respect to CPM implementations. Also in The Netherlands the CPM practice is growing fast the last couple of years. We like to describe ourselves as “Business Consultants with the Ability to Execute”. We have a great vision with respect how to manage your performance within an organisation. However, besides writing nice reports, we also have the knowledge and the skills to translate this vision into an high performance system which can support CPM processes. And this are not just empty words, we are also recognized by the market for our approach.

Goal is to publish a posting every week which is written by a CPM-consultant from our practice. Postings can be about new trends or articles, but also just ordinary, funny, real-life stories we experience every day at our clients. Because it’s really true. Consultancy @ Deloitte: the best job there is!

Please feel free to leave comments on this blog or to contact one of the authors by email.