Over the last two years, I have written a series of blog posts about the impact of the economy on enterprise technology projects. The premise of the posts being that consolidation, shared services, outsourcing and SaaS (and now Cloud) business models would accelerate as organizations seek operating efficiencies through business process improvements. These business transformation initiatives can not only yield improved processes and decreased cost, but also allow organizations (or divisions operating on outdated systems) to make technology leaps to the latest platforms.
From a project management perspective, transformation projects resemble most large scale technology or ERP system implementations because at the heart of each of these initiatives is an enterprise business application. In some cases, a new implementation or upgrade is included as part of the project to make sure the organization is on the latest release or that the consolidated entities are on the same platform.
However because of the changes to business operations and organization dynamics, transformation projects present a few additional challenges:
- More vendor / partner involvement – As part of the project, a service provider may be taking over business processes, technology operations or both. In addition, due to risk, contracts and service levels may be fixed and provide rigid requirements for change requests.
- Employee uncertainty – Part of the potential cost savings are realized through decreased headcount. Some employees will be transitioned to new roles, some may be transferred to the service provider and unfortunately other will lose their jobs.
- Increased change management – Additional change management may be required because not only is the organization moving to a new application, but also a new business model.
- Increased scope-creep – Because contracts and timeframes are negotiated up front, often without detailed business process analysis, scope, timeline and project complexity may expand as vendors uncover additional requirements or realize the complexity of running the client’s operations.
- Duration – Based the size and complexity, transformation projects can last between 18 – 36 months and are often divided into multiple phases based on transitioning business process, functionality or entities to the new business model.