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Artizen Hidden Costs of IT Program Management
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Artizen Hidden Costs of IT Program Management

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  • 1. 1© Artizen, Inc. All rights reserved. Programs and Projects The Hidden Cost of Delays
  • 2. 222© Artizen, Inc. All rights reserved. The Artizen Perspective The value of IT and the hidden cost of schedule slips.  The situation  What should have happened  What actually happened  What went wrong?  What did it cost?  Key takeaways
  • 3. 333© Artizen, Inc. All rights reserved. The Situation Opportunity Your business users identified a project that: • was critical to their go to market strategy • had a great business case • included a 20-times payback over five years IT Response End Result IT managed a project that: • could be done in 9 months • actually took 24 months (from executive proposal to project delivery) Because of schedule slips, IT has: • slowed the go to market strategy, let competitors get to market first, made the company miss major revenue • created business teams who are frustrated with IT • perpetuated IT’s reputation as too slow and expensive
  • 4. 444© Artizen, Inc. All rights reserved. FY11-Q3 FY11-Q4 FY12-Q1 FY12-Q2 FY12-Q3 FY12-Q4 FY13-Q1 FY13-Q2 FY13-Q3 FY13-Q4 What could have happened.  The request is recognized as a “must do” project  IT responds immediately  They staff the project with a senior IT analyst & solution architect  They deliver in 9 months  The business is delighted  IT is viewed as a responsive, critical resource Business Submits Request Design, Development & Testing Requirements Definition Go Live
  • 5. 555© Artizen, Inc. All rights reserved. What actually happened.  It took 24 months from the time of request to go live  The go to market strategy is severely impacted, competitors gain an early advantage and significant revenue is lost  IT is viewed as unresponsive and bureaucratic FY11-Q3 FY11-Q4 FY12-Q1 FY12-Q2 FY12-Q3 FY12-Q4 FY13-Q1 FY13-Q2 FY13-Q3 FY13-Q4 Design, dev. & testing Dev. schedule slip Go Live Requirements definition Portfolio mgmt. & project approval Business submits request
  • 6. 666© Artizen, Inc. All rights reserved. What went wrong! FY11-Q3 FY11-Q4 FY12-Q1 FY12-Q2 FY12-Q3 FY12-Q4 FY13-Q1 FY13-Q2 FY13-Q3 FY13-Q4 Design, dev. & testing Dev. schedule slip Go Live Requirements definition Portfolio mgmt. & project approval Business submits request The portfolio mgmt. process and the FY12 operating plan took 6 months. No work started until the FY12 portfolio was approved. The requirements phase was understaffed. Users did not have the skills and experience to articulate requirements. IT did not assign analysts who could gather requirements and produce a BRD for them. Delays in the BRD caused IT to redeploy resources. Time was lost restarting the development team. Scope changes and code quality problems resulted in a schedule slip in development & testing.
  • 7. 777© Artizen, Inc. All rights reserved. What was it supposed to cost? $1,200,000 Baseline project cost
  • 8. 888© Artizen, Inc. All rights reserved. What did the delay cost? $1,200,000 Baseline project cost $400,000 Cost of delays
  • 9. 999© Artizen, Inc. All rights reserved. What did the missed opportunity cost? $1,200,000 Baseline project cost $400,000 Cost of delays $6,000,000 Cost in lost business opportunity
  • 10. 101010© Artizen, Inc. All rights reserved. Wait, what did it really cost? $400,000 Cost of delays $6,000,000 Cost in lost opportunity How IT usually views the cost of delay: How the business views the real cost of delay: $6,400,000TOTAL LOSS =
  • 11. 111111© Artizen, Inc. All rights reserved. Key Takeaways Most of the delay occurs before development-through-testing even starts Your portfolio management process must be responsive • New ideas don’t always align to annual operating plans • Strategic projects should not be held hostage to the usual process At the requirements/planning phase, supply the right resources for on-time, high-quality output. • If your users cannot produce well defined requirements, help them. IT should supply the resources they need. • Know when to use outside resources. Bring in a program consultant rather than lose business value.
  • 12. 121212© Artizen, Inc. All rights reserved. Web: www.artizen.com Email: Acroft@artizen.com Phone: 650-261-9400 x 103 The Hidden Cost of Delays Artizen can help! Artizen specializes in large program management — it’s what we do - and it’s all we do. Because we offer deeper expertise, we have helped clients such as Cisco, EA, McAfee, NetApp and other premier clients for years. Get in touch with Aaron to learn what Artizen can do for your programs!

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