There are always risks in undertaking a project, and we’ve all seen reports talking about time and cost overruns. In Australia, a classic is the Sydney Opera House which ended up taking 10 years longer and 1300% more in cost to deliver. Bruce Pittman, Director of Flight Projects and Chief System Engineer in the NASA Space Portal, has this to say:
“Projects are usually undertaken to either solve a problem or take advantage of an opportunity. The probability that the project – even if precisely executed – will complete on time, on budget, and on performance is typically small. Project management is utilized to increase this probability. So in a sense, project management is risk management.”
Knowing this, an integral part of getting a project completed is to have a process to manage the project’s risk, usually called a Project Management Plan. In the context of software implementation, we can call it the Implementation Approach.
Before deciding on an implementation approach, it is important to understand the objectives and constraints of the project. Do budgets have a deadline for completion? Is there an annual/public financial reporting deadline that is expected to be delivered in the project? Will the outcome be required for strategic planning? Each of these questions appear to be time based questions, but they also have a content element to them. Is budgeting the primary outcome, or is it reporting or analytics?
At LightARC we believe that a good project is a fast project with clear, measurable outcomes. Based on experience, the more a project attempts to accomplish before go live, the greater the risk of project cost and time overruns. Going from zero to hero may seem to be a good idea, but the risks to the project and it’s adoption in the organisation are too high.
Big Bang Approach
At the highest level of risk is the big bang, “We want the whole menu in the one sitting”. In this approach, for budgeting, it will include full expense budgets, revenue budgets driven from a sales model, labour and operational budgets driven from their own operational models, balance sheet budget and the “always challenging” cash flow budget. The solution will also need rolling forecasting and projection to a 5 year forecast for P&L, balance sheet and cash flow. All of this should be managed and controlled within a work flow with user level security enforced.
While technically possible, the level of risk in such a project is very high. Without undergoing your entire budget process several times, it is difficult to fully test and validate all the models that go into an end to end budget solution.
Off the Shelf Approach
The next approach is to take an “off the shelf” solution. These are most often industry specific and may be able to accomplish 80% of your requirements. However, what happens to the remaining 20%? Can the solution be modified, yet still easily allow upgrades as enhancements become available? Or will the gaps be workarounds that will slowly grow as the organisation develops.
The third and least risk approach is to take a modular approach. In this approach, you break up the entire solution into logical modules and implement each module discretely, tackling the modules with the most return on investment first and feeding the results into an existing budget model. For example, you may choose expense budgeting as the first module for implementation. The reasoning would be that there may be a large number of users involved in the process and there is significant effort currently being expended to continually consolidate all the expense budgets.
These implications can be shown in the following graph:
The other major factor in any implementation is the consulting involvement in the solution. Here there are also three common approaches to the role of your solution partners; trainer, advisor, owner.
In the trainer relationship, the partner typically trains the users on how to configure the solution and the implications of the configuration. Once trained, the business then configures and implements the solution with their users. This approach typically is associated with high risk as no matter the quality of training, your organisation will not be as experienced in the best practices of implementing these solutions.
In the advisor relationship, the consulting organisation analyses your current budgeting and reporting environment, documents requirements, and may assist in configuration and end user training. In the advisor relationship, the full solution is still owned by your organisation.
In the owner relationship, the consulting organisation may deliver an off the shelf solution or configure a complete budgeting, planning and reporting solution for you. The key point here is that you expect the consulting partner to own the full solution, remediate any problems and extend the solution according to your requirements. To enter into this level of partnership requires a great deal of trust and should also involve very clear expectations and comprehensive agreements.
It’s important to consider that even if you don’t formally adopt an Implementation Approach, you’re still going to follow one, you just end up working with your default assumptions and ways of doing things, rather than a formal plan. By adopting a formal approach, you access some better tools to help ensure your implementation project is one of those that ends up on time, on budget and on performance, and that’s a win for everybody.
What is your company struggling with? Drop us a line if you want to have a chat or stay in touch with our updates.