Many of today’s enterprises consider Information Technology (IT) a key strategic asset although the track record in IT implementation remains mixed at best. According to a variety of research reports, the chances of implementation success are no better than predicting heads or tails in the flip of a coin. Approximately one-half of IT projects successfully meet or exceed expectations. According to a 1999 study, 42 percent of corporate IT projects were abandoned before completion. Furthermore, on average, companies waste as much as 20 percent of their IT budgets on purchases that fail to reach their objectives, resulting in costs of approximately $500 billion worldwide. Clearly, organizations need new tools to help increase the probability of successful IT implementations. This article presents one such tool: IT Resource Gap Analysis.
Technology Implementation Frameworks
IT implementation refers to the final phase of the traditional software development life-cycle and includes the construction (or purchase) of an information system (IS) as well as the process of integrating it into the business processes of an organization. Implementation typically starts with an idea, mandate, or business need and ends when a new IS becomes part of the organization’s standard operating procedures.
To manage the complexity of a system’s implementation, many firms use formal implementation methodologies. Formal methodologies help to structure and guide the complex and ambiguous task of systems implementation. However, many methodologies are complex in their own right and require substantial additional work to “manage the methodology” as well as the project. For instance, a given methodology may emphasize detailed processes and frameworks and stipulate accurate inputs to a number of models (e.g., labor-hours required to complete a task, assumptions about employee motivation, etc.). However, unless such data are readily available, providing accurate inputs becomes a laborious task requiring significant overhead. In addition, many methodologies fail to capture a measure of quality of critical resources. Variations in resource quality are treated as “noise” in the system. However, in the IT world, where many deliverables are intangible, quality of resources and organizational context are often as important as quantity of resources.
IT Resource Gaps
While formal methodologies certainly have merit for large, complex, and interdependent systems development projects, we advocate a simpler and more complementary approach to managing multiple smaller systems implementations. Our approach focuses on identifying and addressing gaps in both the quality and quantity of the following six relevant resources required to successfully complete a systems implementation.
- Human Resources: Head count (quantity), as well as skills, expertise, teamwork, and level of motivation (quality).
- Infrastructure: Legacy IT assets, i.e. network, hardware, and software, which include bandwidth, servers, database licenses, etc. (quantity) and functional fitness (quality).
- Budgets: Capital and operational budgets (amount and sufficiency of funding represent the quantity dimension, and certainty and timing represent quality).
- Partners: External resources such as technology vendors, partners, and associations. The quantity dimension includes the number of partners, whereas quality is related to how intimate the working relationship is and to the partners’ ability and readiness to perform required tasks.
- Executive: Credibility with executives and their commitment to the projects (i.e., “political capital”). Executive resources often stem from alignment with the company’s strategy and/or regulatory compliance initiatives. A representative quantity factor might be the ratio of positive executive relationships to negative executive relationships within a project. Project managers must also analyze the willingness of executives to share risks and ownership of relevant IT projects (quality).
- End users: The number of end users (quantity) and their IT capabilities, rapport with the IT Department, and motivation for project success (quality).
For each project, quantity and quality of allocated resources can be mapped with respect to what is needed for success. The gap is the difference between available and required resources. Gaps in quality and quantity can be measured in a variety of ways. For instance, the project manager may simply assign an intuitive value to a resource specification, such as “I believe that the users are very resistant to project ABC.” Alternately, the entire project team may attain consensus evaluations of each IT resource at work in the project. A third method would be to survey users, executives, and IT personnel to establish resource gaps. Finally, an organization that frequently uses the IT Resource Gap Analysis could integrate relevant project measures into a Balanced Scorecard approach.
The end-to-end process would involve the following steps:
- Gather information on quantity/quality gaps using one or more of the techniques mentioned above.
- Map the findings into an IT Resource Map.
- Analyze the map. Analysis may include assessing trends and comparing size of the gaps with project priorities. The value of the map is that it allows managers to place projects in the organizational context and identify systemic shortages in the structure, skills, and governance of the IT organization.
- Take actions, such as realigning resources to projects with highest priority, proactively “pruning” the project pipeline, or adopting programs to develop quality of specific resources.
- Repeat on a regular basis. To be effective, mapping needs to be built into the project reviews, which are typically done on a monthly or quarterly basis.
An example of an IT Resource Map is offered in Figure 1. It shows seven IT projects at a Fortune 500 company. All seven projects are in the IT infrastructure area, managed by one director and funded through one cost center.
There are several analytical strategies for IT Resource Maps. By examining the blue area of a column, one can assess the relative project risk for each project. Doing so reveals that projects 2, 3, 4, 6 and 7 have major gaps and are likely to fail unless resources are shifted or re-aligned. However, projects 1 and 5 are well supported and are likely to succeed.
By analyzing the blue areas across each row one can diagnose any systemic weaknesses within the IT implementation process. For example, in this map the consistently blue shaded areas in the budgetary and partnering rows reveal a risk that a large percentage of under-funded projects will eventually be abandoned, thereby reducing overall efficiency of asset utilization. Additionally, with insufficient partnering resources, these projects face a challenge in shifting partners’ resources to match project scope. The pervasiveness of these resource gaps across all projects may indicate a systemic problem with the budgeting and partnering processes.
Finally, by examining the structure of blue areas within a row, one can identify potential strategic concern. For example, the repeating blue vertical stripe across each column in the “human” row indicates that the headcount in IT may soon be stretched too thin. For these projects, quantity of human resources poses more problems than does quality (thus the repeating vertical stripe). Such a result may be expected in times of budget tightening (as demonstrated by the systemic presence of budgetary concerns noted above). However, if the number or complexity of IT projects is expected to increase over the next 12 to 18 months, the lack of sufficient IT human resources should be addressed proactively.
Figure 1: IT Resource Gap Analysis
Minding the Gaps
Once a resource map is created and analyzed, a project manager can address any risks, weaknesses, or concerns identified in order to maximize the probability of successful IT implementations. Using the IT Resource Map, a manager can systematically craft a strategic response in three areas: resource alignment, shifting resources, and bottleneck management.
- Resource alignment. The dynamic nature of IT implementation calls for proactive realignment of resources to projects. For instance, Figure 1 reveals a systemic weakness in both budgetary and partnering capabilities. With this in mind, the IT Project Manager would recognize that increasing the IT staff would be an inappropriate resource alignment. Instead, the project manager must cultivate a short-term strategy to acquire adequate funding for existing projects as well as a long-term strategy to improve the budgeting and partnering processes.
- Resource shifting. The ability to shift resources between projects is fundamental to filling resource gaps as well as to managing the expectations of executives and end users. To close gaps, IT Project Managers can leverage internal staff, external partners, or customers.
- Internal staff: Managers may be able to shift IT staff to focus on critical project timelines. For instance, the development team may be switched in a six-month period from developing a new pricing system to constructing a new data warehouse. This approach calls for process expertise, including a business/IT liaison, frequent communications, formulation of specifications, and modular development. This is the approach that FedEx took with its “6 x 6” initiative. Alternatively, managers may create an incentive structure to reward project staff for going the “extra mile,” whether it is working extra hours, finding a creative entrepreneurial solution, or working smarter and increasing productivity. For the internal staff approach to work, IT managers need to develop and sustain a high-performance culture and excel in hiring and functional development of personnel.
- Strategic partnerships: Technology partners and vendors are often well positioned to close resource gaps. For instance, a project with significant budgetary and human resources gaps may be ripe for outsourcing to an offshore partner. This approach requires expertise in negotiations and relationship building at various levels, as well as working to achieve a delicate balance between short- and long-term interests of both organizations.
- Customers: Occasionally project managers may deliberately let the customers bear the brunt of a resource shortage through scope revisions, missed deadlines, and budget overruns. To an extent, this is a natural, yet unfortunate, consequence of project prioritization. Obviously, this strategy damages the long-term credibility of IT and should be used sparingly. It is most valuable, however, when customers continually modify specifications, requirements, and timelines without regard for the impact on overall IT resources.
- Managing bottlenecks: To some managers, IT capacity must consistently attain near 100 percent utilization with all six resources being fully leveraged. However, full utilization creates multiple concurrent bottlenecks which pose a planning challenge: some projects may be brought to a screeching halt when the needs of priority projects unexpectedly surge. A more prudent approach is to maintain spare capacity (e.g., 5 percent of team members’ time or number of database licenses). This excess capacity could be normally allocated to low-priority projects, such as functional development and experimentation with new technologies, and preempted by higher-priority projects as needed. Essentially, this approach provides a balance between unused capacity and “abandon rate,” the projects that have to be canceled or delayed due to insufficient resources.
Using the three strategies described can lead to more successful IT implementations. Once a clear strategy is in place, the IT Project Manager can proceed with balancing the necessary resources to effect a successful IT implementation. However, as noted above, the IT Resource Gap Analysis framework should be integrated into the ongoing processes of the organization. Such integration is not merely a steppingstone on the way to system implementation success. Rather, it is a tool for continual evaluation of the systemic strengths and weaknesses of an IT project portfolio. Over time the IT Resource Gap Analysis can prove to be a valuable resource in leading to a culture of IT implementation success.
Information system implementations are complex and challenging. Many firms struggle to attain desired performance levels and often complete projects that are over budget, overdue, and fail to satisfy users. While there are many formalized methodologies, such as the Rational Unified Process, Joint Application Development and others, these methodologies are often characterized by rigid, formalized activities that require extensive effort beyond the project itself.
The IT Resource Gap Framework presented here is a simple and useful analytical tool for identifying project risk, systemic weaknesses, and strategic concerns for an array of implementation projects. Once these factors are identified, a project manager can use the IT Resource Map to craft a strategy for aligning and shifting resources to increase the success rate of high priority projects, and to proactively manage the unavoidable bottlenecks that face IT organizations that are consistently asked to produce more visible results at lower costs.
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