How to save money on change projects

David Walton of Bestoutcome Ltd explains why it’s important to take a step back and analyse the fundamental change elements of a project from the outset.

Projects are about change and of course it follows that change must lead to real improvements, otherwise why spend the money? It is easy to look at a project and become dangerously immersed in process details, but what matters above all is getting an excellent result and a positive return on investment.

Yet despite being focused on true goals, projects are still initiated and executed without enough attention being paid to managing change, an underlying factor that can make or break a project. I often get asked to do project reviews or health checks. After the usual assessment of plans, scope, objectives and progress, I always take a step back and see if the fundamental change elements of the project are being addressed.

Effective change management
For example, I recently reviewed a finance accounting system that the project team had implemented. Yes, it did go in at the start of the new financial year (which was the target date), but due to time pressures all that was implemented was the ‘hard’ system. User procedures were barely addressed, training was rudimentary, and informative communication to the users and suppliers was non-existent. The net effect was total confusion. Suppliers did not receive purchase orders as the users did not know how to raise them in the new system. Consequently suppliers were not getting paid. The whole supply chain suffered.

This was just one aspect of unnecessary disruption but there were many other examples. Users became openly hostile and scathing towards the implementation. To put the situation right a retrospective set of change activities had to be put in place. The symptoms may have been confusion but the impact on the business was increased cost and strained relationships with suppliers.

If the project had included change management factors such as appropriate communication, change agents, sponsorship and training, a better outcome would have been far more certain. For a start the net result would have meant a reduced cost overall as the post implementation remedial project described above would not have been needed. As all total quality management (TQM) professionals know, getting it right first time saves money. Rework is costly.

Filling in the details
In a recession like the one we are in now, it is imperative that organisations save money. It is not enough to focus on the bare bones of a project, i.e. the hard elements, like putting in a system and skimping on the softer change factors. As the story above indicates, this is a false economy. Treating projects as holistic change projects from the outset will save time and costs in the long run.

Visiting a client site recently, a senior executive was complaining to me that the IT department was in the process of introducing a new telephone system. IT departments are easy whipping boys but his complaint was that the project was being treated by IT as just another infrastructure project and the technical people would decide which system was chosen. That may have been acceptable in the days of fixed line and Bakelite, but as we all know today’s telephone systems are highly sophisticated and can fulfil a number of functions over and above making a simple telephone call.

Training on the use of the new telephone system was also being lamented by the business executive: there was none planned. One of the benefits of the investment was to save switchboard staff resources. Before, hundreds of internal staff had been used to ringing up the switchboard to find the number of another member of staff. If used properly the new system contained a voice recognition feature that identified a spoken name and then redirected the enquirer to that person’s extension.

Without training and ‘push’ to the users, the reduced switchboard staff would become even more overstretched. Users must have training to understand how to get the best from a system’s important functionality. In turn this will deliver more efficiency, higher productivity, more satisfaction throughout the workforce, and ultimately, sought-after cost savings.

Again, this is an example of treating a project as a purely technical implementation without viewing it in holistic change management terms. Think of the cost of installing an inappropriate telephone system that fails to meet the real needs of the organisation. You don’t put these investments in every day, so make sure it’s right first time. This means developing a very good understanding of why a new system is needed, what benefits are to be gained from it, and the core functionality required. It can be achieved by involving users and consulting them, rather than imposing a technical solution.

Properly consider the change management aspects of projects, including communicating the goals of the project and its benefits, plus the all-important training aspects, and you will save money and derive real return on investment. Skimp on these and you are likely to end up spending more money later to rectify deficiencies that should have been addressed in the planning stage. In a recession and with a view to planning for the upturn, changes have to be for the better.

David Walton is managing director of Bestoutcome Ltd.
Telephone: 01753 893 511
Mobile: 07799 411 272
Email: david.walton@bestoutcome.com
Web: www.bestoutcome.com