Artizen Hidden Costs of IT Program Management

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Programs and Projects
The Hidden Cost of Delays

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

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

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

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
Design, dev. & testing
Dev. schedule slip
Go Live
Requirements definition
Portfolio mgmt. & project approval
Business submits request

What went wrong!
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.

What was it supposed to cost?
$1,200,000
Baseline project cost

What did the delay cost?
$1,200,000
$400,000
Cost of delays

What did the missed opportunity cost?
$1,200,000
$400,000
Cost of delays
$6,000,000
Cost in lost business opportunity

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 =

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.

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!

Artizen Hidden Costs of IT Program Management

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