Burning money; risk management or fear of change?

neil new

“We seem to have developed the perfect system for burning money and achieving nothing” – Anonymous.

This is a true story.

An organisation with a large number of traditional IT systems wanted to assess the opportunity to use new Software as a Service (SaaS) applications to advance new initiatives. SaaS was the way to go; nothing to implement on premise; no new hardware; pay as you use monthly subscriptions; lots of easy integration options provided out of the box; an easy way to explore the opportunity to innovate towards new solutions which could make the business become far more efficient.

A team was established to review potential applications. More than 30 had been identified as having the possibility of adding value to the business. Budget was allocated to this team and they got to work. After more than 6 months of effort, all of the applications had been assessed. Technically successful, all this project required was executive signoff and it was ready to implement these SaaS solutions and start benefiting from a new approach to delivering IT within the organisation. However, the executives who were responsible for the sign-off didn’t feel confident that they were able to make the correct decision. A lot was riding on a “go” result;

• The responsibility of having your name associated with something which might not work
• “What if I say yes and it goes wrong?”
• “I don’t really understand what this means or how it will impact our business.”
• “I don’t understand the technicalities of what I am being shown.”
• “It’s too risky. It’s safer to say no.”
• “What we had was working; why change anything?”

Despite the effort of the project group, the sign-off process failed, due to a lack of collective understanding of the benefits of implementation. The project was unable to communicate the necessary information to a group of decision makers who are individually responsible for the risk to the business, in a way they could each fully understand. They all had diverse experience and responsibilities and very few were familiar with the technical details of the project. This is negative decision making; not because the decision was no, but because the decision was made against the lack of information needed to make a considered decision.

The disconnect between the driver for change and the decision makers cost this company through the delayed implementation; the perfect system to burn money and achieve nothing. The allocated budget was spent. The visible cost? Several hundred thousand dollars. The actual cost? Unknown… the budgeted amount and heading into millions of dollars of lost opportunity from the benefit these new SaaS applications could have brought to the business. After all, they were being assessed for a reason.

This happens time and time again; the result is that the reality of change never meets the promise of change. Innovation and creativity is stifled. People within the organisation either become accepting of this and learn to live with it, or, the good ones leave.

typical change profile

Our experience as a company involved in helping many organisations implement change, suggests that this is too common an occurrence. No-one benefits from wastage like this – but nothing changes, because it is all too often put into the “too hard” basket.

More often than not, the biggest barrier to change is perceived unacceptable risk which is translated into fear; fear of making the wrong decision. In the absence of evidence to the contrary, risk aversion breeds fear which causes decision makers to say no.

risk or fear

Being able to qualify, quantify and effectively communicate risk so that it can be managed, accepted, transferred or eliminated is a necessary requirement for effective IT change management.

Early engagement and communication with decision makers is also necessary. That communication has to be done using a language that they understand; that everyone understands. If this doesn’t happen, it doesn’t matter how effective any interim process is; if the outcome of an agile process is that a set of decision makers who have not yet been engaged need to make a decision based on information they don’t understand and have had zero involvement with, you have just been forced into a project killing waterfall process which is, based on the experience of many, doomed to fail or take an inordinate amount of time to get back on track, during which time the world has changed.

Our belief is that there is a solution to this problem which hinges around prioritising where change should happen based on an understanding of where the real value in an organisation lies. If you can quickly understand the core information sources, actions, systems and people involved in supporting essential business outcomes, you immediately know where to focus spending. You spend on things which make those Information Supply Chains more efficient and effective, and you stop spending in areas where there is no business advantage to do so. In the process of developing that level of understanding, you are developing the evidence to support the suggested change using a language which enables the change leader to effectively communicate with the decision maker. The barriers of; lack of understanding, too much risk, easier to say no, are removed – the evidence for change and the positive impact of that change is clear to everyone; positive decision making is easy.

This is LINQ. Change; simplified.

rb simplicity

To learn more, download our White Paper on Information Supply Chains, or visit our website, www.linq.it to stay in touch with our developments.

Download the LINQ White Paper