Delivering The Outlined Benefits of A Project
In this edition we will wrap up the Respond phase recommendations by focusing on how to do projects well. If you are innovating or initiating change in your organization to respond (offensively or defensively) to the COVID crisis, you are executing on a project. Right now, while some industry sectors are doing well, others continue to struggle so there is a lot of “Responding” left to do. You may recall my analysis of the threats of the COVID crisis – we will each have to assess the impact of consumers re-entering the marketplace and the government’s positions on lockdown/stimulus.
The first step in any project is determining an owner (aka a sponsor). What is his/her value proposition? There are other reasons to invest in projects besides the more obvious financial benefits, such as risk management and compliance.
“How much am I willing to invest in a project if I don’t understand the value proposition?” It’s crucial that you know because a $100,000 project may be expensive, or it could be a real bargain!
Typically, IT project benefits come from improvements to organization and process. To justify the investment in technology, you must understand the changes you have to make in the underlying process (for example, customer service, inventory management, accounting/finance).
Do you want to make an impact this year? To justify the investment in technology you need to understand what benefits can be realized from the underlying process (for example, payroll costs, material costs, overhead). For many of us, investing in IT appears sexy! However, what’s not is getting people to change what they do, or accept responsibility for data.
For company-wide projects, how do you acknowledge the needs of different departments? Governance is put in place to represent the company – as the customer. Project governance (sometimes called Steering Committees) tasks key leaders with acknowledging the sponsor’s expectations. The Steering Committee approves business requirements to confirm the project will deliver on its promised value proposition. This ensures that a cost reduction project actually reduces costs. However, the decisions of the Steering Committee cannot contradict or infringe on the sponsor’s value proposition, which is the primary reason for the project’s existence.
While these may seem like simple concepts, you’d be surprised at how effective they can be when applied. In the Respond phase, we have talked about:
1) Your vision and plan
2) Your key capabilities
3) Your organization
4) And now investing in projects to create benefits.
This approach is a simplified version of how I helped Fortune 500 companies think about how to drive growth and profitability and it works for dynamic companies as well.
Update: COVID-Related Loans
As expected, last week the House and Senate came to agreement on modification of the PPP forgiveness rules, extending the time for spending, the time for rehiring staff and the ability of companies receiving PPP loans to also elect to defer the employer portion of payroll taxes through the end of this year. There’s still about $120 billion in PPP funds available for small business. If you have not yet applied, please contact me or the partners at BKM Sowan Horan to discuss how best to proceed.