June 25, 2008 By Liza Lowery Massey
The greatest productivity gains and cost savings I've witnessed during my IT career happened when business process improvements occurred before the technology's deployment. Next (and less effective) are transformational projects where a gap analysis during implementation forced changes to business processes. The worst-case scenario is when an IT system was customized to mimic the "way we have always done it."
I recently participated in a panel and discussed lessons learned from transformational IT projects and the role of cultural change, I recalled two projects that included upfront business process improvements and consequently achieved dramatic results. One was a supply chain management (SCM) project for Los Angeles, and the other was a regional Smart Permitting initiative in Silicon Valley.
The goal of the L.A. project, like any good SCM initiative, was to move from just-in-case to just-in-time inventory management. L.A.'s results were staggering: millions of dollars saved (initially and recurring), hundreds of positions no longer needed to support the process, and the number of warehouses was cut in half. The project succeeded for several reasons: the inclusion of process review and improvement, sound project and change management, collaboration within the city and with the vendor, and before-and-after measurement. Additionally the city's leadership made the tough decisions that often deter organizations from realizing dramatic improvements.
The Smart Permitting project began with 27 cities and two counties in California's Silicon Valley. Developers faced a regional building code with 400 local amendments; by collaborating, the amendments were reduced to 11, then nine and finally only two. The savings -- before any technology was implemented -- was estimated at billions of dollars and impacted more than 90,000 commercial and residential projects. Other business process changes were also made before technology was eventually introduced: governance, executive involvement, before-and-after measurement, and well defined goals all contributed to the initiative's success. Once again, leaders made tough decisions.
These examples probably evoke memories of other highly successful IT projects. But following closely on their heels are likely recollections of projects that didn't live up to their potential. While the aforementioned success factors make a significant difference, why is transformational change so difficult -- especially in the public sector?
First and foremost, government lacks a unifying purpose. Unlike private industry, whose single unifying function is profitability, each government agency or department has its own mission that -- while contributing to the overall community good -- is narrowly focused on specific goals and objectives.
Other factors -- both intentional and unintentional -- stymie process improvement and the success of IT projects. The inadvertent roadblocks include not understanding the value of reviewing and improving business processes, and inadequate skills to do it. Human nature also plays a key role. We are creatures of habit who value our comfort zone. I call this Liza's Theory of Change: "People only change when the pain of not changing becomes too great." It sounds pessimistic, but it's realistic and I use it as a driver to search for "pain" to ensure the situation is ripe for transformation.
Intentional roadblocks to success include: resistance, competing agendas, risk aversion, and fear of job loss or negative change to working conditions. In addition, people do not like to be wrong. As IT professionals, we often look at everything through a lens of "how can I fix it?" While it's the nature of our business, we put non-IT folks on the defensive when we approach them this way. I've learned that approaching everything in the spirit of further improvement acknowledges that people are doing their best.
Some progress can be made when technology forces change or adapts to bad business processes. While often more difficult, transformational results are realized when business process improvements precede technology implementation. Acknowledging and addressing the roadblocks, as well as tackling the areas of greatest pain, lead to the greatest gains.
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