Speaking at this week's ISACA International Conference in LA on the subject of value management, I was surprised and somewhat heartened by the relative maturity of the audience in terms of both knowledge of, and interest in, the topic. We were able to have a constructive debate on best practices in optimising enterprise value from IT investment. One specific topic that came up was project cancellations - or rather the lack of them. Most agreed that cancellations were rare, that even the most challenged of projects often continued to limp along, consuming resources and cash, and that governance processes needed significant improvement if continued value destruction was to be avoided. Within many enterprises this requires a cultural shift from cancellations being seen as a sign of failure to them being seen as the exercising of good governance and strong management.
There are many reasons for cancelling or rationalising projects, many beyond the direct control of the enterprise. Research carried out a couple of years ago on behalf of ISACA identified that from a database of more than 3,000 real life discretionary projects from a representative sample of financial services firms, only around 2% were cancelled, despite clear evidence of value destruction in more than 20% of the sample. Of course cancelling projects is never easy, for a variety of good reasons, and robust, reliable data is needed to ensure that the decision is made safely. This is where active portfolio management can help with regular reporting of key value related metrics and the continuing update of the assumptions upon which the original decision to proceed was made. This requires the business cases to become living documents and the project managers to become increasingly oriented towards value, rather than just solutions, delivery.
With all of the statistics still telling us that more than 20% of discretionary projects fail to deliver value, if cancellations are a rare event in your enterprise perhaps it is time to look again at your portfolio management practices. My experience in LA indicated to me that this is beginning to happen more regularly in North America and this has to be a good sign. But in the UK.............?
There are many reasons for cancelling or rationalising projects, many beyond the direct control of the enterprise. Research carried out a couple of years ago on behalf of ISACA identified that from a database of more than 3,000 real life discretionary projects from a representative sample of financial services firms, only around 2% were cancelled, despite clear evidence of value destruction in more than 20% of the sample. Of course cancelling projects is never easy, for a variety of good reasons, and robust, reliable data is needed to ensure that the decision is made safely. This is where active portfolio management can help with regular reporting of key value related metrics and the continuing update of the assumptions upon which the original decision to proceed was made. This requires the business cases to become living documents and the project managers to become increasingly oriented towards value, rather than just solutions, delivery.
With all of the statistics still telling us that more than 20% of discretionary projects fail to deliver value, if cancellations are a rare event in your enterprise perhaps it is time to look again at your portfolio management practices. My experience in LA indicated to me that this is beginning to happen more regularly in North America and this has to be a good sign. But in the UK.............?
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