There is a famous quote by John F. Kennedy – “Success has a thousand fathers and failure is an orphan.” It is no wonder that accountability is such a scarce resource in corporate world.
After every strategic planning cycle, there are several initiatives to align the organization and measure performance against corporate strategy. Many companies have recognized that they need a process to compare the merits of these competing initiatives. In addition, they have institutionalized processes to develop guidelines and rules for developing business cases so that all potential investments can be compared consistently for funding and approval decisions.
In a utopian society this process will work flawlessly, but due to human nature this process often breaks down. Managers quickly learn that if they want their projects funded/approved, the analysis and scoring need to look favorable to ensure higher ranking. There is an incentive to conservatively estimate costs and aggressively total benefits. They essentially start “gaming the system.” At this point, the Business Case process has failed to achieve its intended goal: to identify the most beneficial initiatives to the enterprise. Even worse, it causes and reinforces undesirable behaviors while, at the same time, consuming resources that could be deployed in more productive activities.
What’s missing is accountability for delivering the Business Value after the project completes. If the Business Case owners knew that their estimates are going to be reviewed again after the project – costs tallied and the actual benefits scheduled, measured and reported – they are more likely to develop more realistic and achievable estimates.
Now to be fair to Managers, it’s a fact that business benefits do not automatically appear as soon as a project is completed. In addition, a forecast of benefits in business case is usually an estimate and rarely occurs according to plan. The potential value is realized in time as changes are integrated in business processes and organization.
What is needed is a Business Value Assurance (BVA) process that goes beyond delivery of conventional project management and ensures that organizations harvests the potential value of investments. Specifically it establishes:
» A process for planning and tracking benefits
» A timeline (plan) for expected value
» Ownership/Accountability to harness business value downstream from project completion
To manage in these uncertain times, it is imperative for organizations to transition from a passive, subtle and relatively unknown to an active, engaged BVA process to improve business performance.