Poor business analysis The Culprit of IT project Failure

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BASIS Quality Forum Presents
“Poor Business Analysis -The Culprit of IT project Failure”


The Problem Statement
Statistics on Project success rate
Finding the reason : the Culprit
The solutions
The stakeholders role
Ecosystem of a successful Project

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  • Introduce the unit objectives.
    Time: 2 minutes
  • Project Scope: Project Scope includes all the work needed to be done to create a product, or deliver a service, or result. Project Scope is all about the project, it defines the work required to create and deploy the product. The project scope statement is prepared by the project manager.
    Solution Scope: The Product or Solution Scope is the characteristics, features, or function of the product or service that is to be built. Solution scope is all about the solution to be implemented: how will it look like, how will it function, and others characteristics etc. A business analyst prepares the product or solution scope.
  • Benefits realization starts with defining a realistic business case that becomes the future management operating model rather than an instrument that is abandoned after the investment decision.
    Benefits do not just happen. They don’t just automatically appear when a new technology is delivered. A benefits stream flows and evolves over time as people learn to use it.
    Benefits realization has its own lifecycle which must be overseen by a senior staff member for management until completion. This is management to the end of the life of the product as per the business case, not the end of the project life cycle.
    Benefits rarely happen according to plan. A forecast of benefits to support the business case for an investment is just an early estimate. It is unlikely to turn out as expected, much like corporate earnings forecasts. You have to keep checking, just as you would with a financial investment that fluctuates in value on the securities market.
    Benefits realization is a continuous process of envisioning results, implementing, checking intermediate results and dynamically adjusting the path leading from investments to business results. Benefits realization is a process that can and must be managed, just like any other business process.
  • Validate and Re-Validate the Business Case - Pull the business case down from the proverbial “shelf” at multiple checkpoints during a project to validate assumptions, ensure that the scope and direction of the investment is on track, and discuss variations with business and IT owners. Consideration should be given to utilizing an unbiased party (someone from finance, audit, etc?) to conduct the checkpoints in conjunction with the project sponsor.
    Create a Benefit Realization Accountability An explicit role of the project sponsor should be to “own” the business case and be on the hook to achieve the benefit. Make it part of their performance objectives. A company has a much higher chance of accomplishing benefits if a) a benefit achievement plan is created during the investment itself, and b) a person or group is assigned the accountability to make it happen and/or report on the progress.
    Create a Benefit Realization Workplan for Each Project Many investments have longer-tailed benefits, such as shutting down old server infrastructure or combining applications that require a “waiting period,” such as insurance policy renewal. These actions must be taken at the appropriate time for a company to fully achieve that hard dollar benefit that, if not addressed, will be found years later in a new cost-cutting assessment.
    Track Multi-Year Benefit Requirements - Particularly with companies that have sophisticated TMOs (Technology Management Offices) or PMOs (Program Management Offices), all the significant benefits within a company’s portfolio should be tracked using project management software, in the same way the company charts multiple initiatives within a program.
    Create a Benefits Dashboard - Promote transparency and accountability across the whole leadership team Foster a culture of joint accountability through benefit and business case transparency. Develop a joint business case scorecard to ensure business unit and IT leaders both have a “stake in the game”.
  • Poor business analysis The Culprit of IT project Failure

    1. 1. BASIS Quality Forum Presents “Poor Business Analysis -The Culprit of IT project Failure” Karim Majumder Rezaul (Business Analysis Professional)
    2. 2. Agenda • Introduction by M Manjur Mahmud – Convener BASIS Quality Forum • The Problem Statement • Statistics on Project success rate • Finding the reason : the Culprit • The solutions • The stakeholders role • Ecosystem of a successful Project • Q&A
    3. 3. The Problem Most IT Projects Deliver Little or No Business Value • Too many failed or challenged projects. • Significant functionality is developed but never used. • Projects seldom deliver benefits identified in the business case.
    4. 4. Project Success Rates Source: Standish Chaos Report, 2009
    5. 5. Project Success Rates Category Description Original 1994 Waterfall 2011 Agile 2011 Successful Project Completed on time and budget, with all features and functions as specified. 16% 14% 42% Challenged Project Completed, but were over budget, late, or lacking some originallyspecified features and functions. 53% 57% 49% Project Impaired/Fail ed Abandoned or cancelled at some point and thus became a total loss. 31% 29% 9% Source: Standish Group Chaos Reports
    6. 6. It Gets Worse!!! The following projects would have been considered successful if they had delivered all planned scope on-time and on budget using the CHAOS criteria, but … • Solution was ultimately not used and withdrawn because of lack of user adoption • Solution did not deliver on business case • Solution did not deliver expected business benefits • Solution had poor usability, poor performance, or high error rates requiring rework
    7. 7. Waste: 45% of Functionality is never used Source: Standish Group Report at XP Conference 2002 by Jim Johnson
    8. 8. Where are the Benefits? • “78% of Information Systems projects failed to realize even 50% of the originally identified benefits.” Source: Management Today • “Only 40% of CFOs find that their IT investments are producing the returns they expected. ” Source: Gartner, How to Optimize IT Investment Decisions • “30-40% of systems to support business change deliver no benefit whatsoever.” Source: OGC, Successful Delivery Toolkit
    9. 9. The Culprit Most Projects Deliver Little or No Business Value Poor business analysis is at the root of most project failures. o Poor requirements o Poor communications between business and development teams. o Business cases are mostly used to secure funding and are not used to manage project outcomes. o Low business analysis maturity levels for most organizations
    10. 10. Top 3 Reasons for Challenged Projects 1. Lack of User Input 2. Incomplete Requirements 3. Changing Requirements All of these are symptoms of Poor Business Analysis Source: Standish Chaos Report, 2011
    11. 11. The Cost of Poor Business Analysis 1. Companies with poor business analysis capability will have three times as many project failures as successes. 2. 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis. In fact, 50% of this group’s projects were “runaways” which had any 2 of the following: • Taking over 180% of target time to deliver. • Consuming in excess of 160% of estimated budget. • Delivering under 70% of the target required functionality. 1. Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects. 2. Over 41% of the IT development budget for software, staff, and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization. 3. The vast majority of projects surveyed did not utilize sufficient business analysis skills to consistently bring projects in on time and budget. The level of competency required is higher than that employed within projects for 70% of the companies surveyed. Source: Business Analysis Benchmark, IAG Consulting
    12. 12. The Remedy Deserves true practice of Effective Business Analysis 12
    13. 13. Effective Business Analysis Must Address Solution Planning, Solution Delivery and Benefits Realization Solution Planning •Develop business case •Define solution scope •Identify stakeholder needs •Develop requirements Solution Delivery •Monitor project delivery •Assess and validate solution •Define transition requirements •Engage stakeholders Benefits Realization •Measure performance based on KPIs •Assess performance •Optimize as needed
    14. 14. Business Analysis is Much More than Requirements Requirements •Requirements Elicitation •Requirements Development •Requirements Management Enterprise Analysis •Problem Analysis •Business Case Organization and Process Change •Business Process Modeling •Business Process Improvement •Stakeholder Analysis and Communications •Organizational Readiness •Organizational Change Management Manage Delivery of Value •Solution Assessment and Validation •Business Benefits Realization •Enterprise Portfolio Management
    15. 15. Business Analyst Role: More About the Business than IT • • • • • • • • • • Business outcome oriented Business process improvement skills Organizational change skills Broad (not deep) IT technical knowledge Customer management skills Ability to conceptualize and think creatively Can articulate a vision Interpersonal skills, ethics, and integrity Negotiation and conflict management skills Analytical and communication skills
    16. 16. A Balanced Scorecard View of Business Value Financial Stakeholder Delivering a positive ROI for stakeholders by increasing revenues, decreasing costs. Satisfying the needs of internal and external stakeholders. Internal Business Process Learning and Growth Improving performance by reducing cycle time, eliminating waste, avoiding defects, increasing efficiency, and spending less time on non-value added activities. Helping users adopt the solution resulting in increased skills, high employee satisfaction, and bringing innovation to new and existing products.
    17. 17. 7 Business Analysis Techniques To Deliver More Value
    18. 18. Change Project Success Focus to Delivering Value • The ultimate success of a project involves much more than successfully delivering the solution on time, on budget, and with all planned scope. • The main criteria for success is whether the business benefits as proposed during the initial business case were achieved.
    19. 19. Why is a Business Case Needed? • A well-defined business case is an essential first step for delivering more value to the business. • The successful business case allows the decision maker to confidently choose a course of action. In the end, it answers the question: “Should we undertake this initiative?” • The Business Case should not be used just for funding. It should be updated and used in the benefits realization management process.
    20. 20. Requirements: Three Perspectives • Business Perspective – What business needs must be satisfied, and what metrics identify that the project is successful? • Customer/User Perspective – What problems needs to be solved how will users interact with the solution? • Technical Perspective – What technology changes are required to ensure that the project’s objectives will be accomplished? Not adequately addressing all three of these perspectives will result in a suboptimal solution.
    21. 21. 5 Types of Requirements • According to IIBA’s BABOK, there are five types of requirements. • The vast majority of requirements management tool only addresses solution requirements. • Business stakeholder and transition requirements cannot be not ignored to achieve maximum value. • If your current requirements tool does not support all 5 types of requirements, find a different tool! Business Requirements Stakeholder Requirements Solution Requirements Functional Nonfunctional Transition Requirements
    22. 22. Good Requirements are Needed to Achieve Value Requirement Type Goal Business Requirements Maximize business value Stakeholder Requirements Achieve user adoption and minimize post-implementation productivity drop Solution Requirements Shorten delivery cycle and eliminate waste through less rework and prioritization Transition Requirements Minimize post-implementation productivity drop
    23. 23. The Case for Good Requirements Quality and Cost Savings As much as a 200:1 cost savings results from finding errors in the requirements stage versus finding errors in the maintenance stage of the software lifecycle. 56% of all bugs can be traced to errors made during the requirements stage
    24. 24. How can better Collaboration between the Solution Team and Stakeholders Help? • Lack of user input is the #1 cause of project failures. • Joint ownership of requirements results in lower costs and higher quality solutions. • Organization change goes more smoothly when users and other stakeholders are involved through the entire lifecycle. • Effective business analysis is the key for better collaboration between stakeholders and developers.
    25. 25. Joint Responsibility for Requirements Makes a Big Difference Who owns Primary Responsibility for Requirements Budget % of Target Time % of Target IT 162.9 172 91.4 172.9 Business 196.5 245.3 110.1 201.3 Jointly Owned 143.4 159.3 103.7 163.4 Source IAG Business Analysis Benchmark, 2008 Functionality % of Target Stakeholder Time % of Target
    26. 26. Engage your Stakeholders!!! • Learn background and purpose of project • Document and express needs • Document business rules • Gather relevant background materials • Review and validate requirements • Participate in requirement prioritization • Review design documents • Participate in software and prototype demonstrations • Participate in retrospectives and capturing lessons learned • Provide additional information for unclear requirements • Build test scenarios and test cases for user acceptance testing • Perform user acceptance tests • Approve changes to requirement specifications • Define transition requirements • Help prepare the organization for change
    27. 27. What is Solution Scope? Project Scope Solution Scope Project Scope includes the work needed to create a product or deliver a service or result. Project Scope defines the work required to create and deploy the product. The project scope statement is prepared by the project manager. The Solution Scope describes the characteristics, features, or functions of the product or service to be built. Solution scope is all about the solution to be implemented: how will it look, how will it function, and other characteristics, etc. A business analyst prepares the product or solution scope.
    28. 28. Why is Solution Scope important? • Solution scope consists of high-level Features of the proposed solution. • Features should be prioritized based on business value. • Features are used to capture stakeholder needs and organize requirements. • Using features significantly reduces solution scope creep. • Using features is highly-beneficial for both Agile and Waterfall development, as well as implementation of Commercial Packages. • Managing Features = Managing Business Value Carefully defined solution scope is key to prevent scope creep, deliver value, and serve as a basis for gathering user needs and developing requirement specifications.
    29. 29. Two Types of Value for the User Value is helping the user get a job done faster, more conveniently, and less expensively than before. Pain Relievers Gain Creators
    30. 30. Identify and Understand Your Users • Identify all your various types of users • Prepare a persona for each user type • The personas should contain:  Responsibilities  Systems and Services Used  Profile  Expectations • Review the persona with real users to ensure that it adequately represents their view.
    31. 31. What are the Key Reasons Expected Business Benefits are not Achieved? • The business problem was poorly defined giving rise to a flawed business case. • The business case was poorly developed and established an incorrect or unrealistic expectation. • Requirements for the solution were inaccurate, incomplete, or were poorly defined. • Delivery of the solution was poorly executed. • The technical solution was fundamentally flawed. • The delivered solution was not effectively adopted by the business. • The business changed significantly between inception and project completion.
    32. 32. Value Index Business Benefits Received ----------------------------------Solution Cost
    33. 33. Benefits Realization Management • Benefits realization starts with defining a realistic business case. • Benefits do not just happen. • Benefits realization has its own lifecycle. • Benefits rarely happen according to plan. • Benefits realization is a continuous process of envisioning results, implementing, checking intermediate results, and dynamically adjusting the path leading from investments to business results. • Benefits realization is a process that can and must be managed, just like any other business process.
    34. 34. Benefits Realization Management
    35. 35. Benefits Realization Management 1. Validate and Re-Validate the Business Case 2. Create Benefit Realization Accountability 3. Create a Benefit Realization Management Plan 4. Measure and Evaluate Benefits Realization at Key Points 5. Identify Problems and Document Solutions 6. Continually Optimize Processes, Organization, and Technology to Achieve Benefits 7. Create a Benefits Dashboard
    36. 36. Poll To what extent does your organization perform benefits realization management ? • Done for every project • Never • Occasionally for high profile projects
    37. 37. Portfolio Management Portfolio Management is a corporate, strategic level process for coordinating successful delivery across an organization's entire set of programs and projects. •To obtain the highest return from your available resources given an acceptable level of risk. •To ensure balance – in terms of investment types and organizational strategies. •To ensure funding allocations reflect business priorities. •To reallocate funds when performance deteriorates and/or priorities change. •To manage dependencies, constraints and minimize double counting of benefits. •To manage Portfolio-level risk and uncertainty. •To provide transparent reporting on performance from strategic intent to benefits realization.
    38. 38. Portfolio Management is More Than Just Projects Project Portfolio Stakeholder Portfolio Process Portfolio IT Service Portfolio Strategy People Process Technology PPM Org. Change BPM ITSM • Project Portfolio Management (PPM) is often not understood or embraced and is often managed quite haphazardly. • PPM is often has different tools and processes and organizations to manage projects, processes, applications, and IT services. • Enterprise portfolio management involves addressing strategy, people, process, and technology.
    39. 39. Portfolio Management Managing for Value Evaluate Value Alignment Fit Innovation Are the benefits worth the effort and risk? •Value •Alignment •Fit •Innovation Do the projects contribute to the strategic goals of the company? Optimize Do we have the resources and skills to complete the project? Are we willing to invest something new and will we gain a competitive advantage? •Re-Scope •Re-Classify •Re-Assign (resources) •Re-Design (merge) •Remove (cancel) •Reschedule Monitor •KPIs •Solution Delivery •Benefits Realization •Stakeholder Satisfaction
    40. 40. Business Value Lifecycle Portfolio Management “Doing the Right Projects” • • • • • Solution Scoping Business Case Prioritization Approval Closing projects that are no longer important Portfolio Governance Project Delivery “Doing Projects Right” • • • • • Requirements Design Build Test Deploy Project Management Business Analysis Enterprise Portfolio Management Benefits Realization “Harvesting the Benefits” • Measure • Evaluate • Optimize
    41. 41. The Culprit is traced by the Team So resist it for Project Success
    42. 42. Next Generation Business Analysis: IIBA’s Business Analysis Framework Version 3 is coming There are big changes coming in the role of business analysis. The focus will be much more on understanding stakeholders and their needs, analyzing change, and delivering value. Understanding how to use these components and the relationships between them results in understanding your stakeholders, what they value, and how to better deliver that value.
    43. 43. Q&A

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