underestimated costs = underestimated risk 

It’s fairly well-known that we weigh many different factors when making a buying decision – some logical, some emotional.  When purchasing cloud computing, it is easy to fixate on the most obvious factor - the monthly fee – while developing a blind spot for many other key considerations.  For many IT buyers who are used to big dollar projects, the relatively low up-front costs of cloud computing can be as distracting as a sparkling toy to a child. (Ooo…shiny!)

So how do you ensure you don’t overlook key considerations that are lurking in your blind spot when you’re buying a new IT system?  

The other day I was talking with the enthusiastic corporate sponsor of a bank’s new cloud-based software system and he told me with the number of impacted staff, ‘the whole thing will only cost $100 per employee.’ When I asked him to describe the process by which this software was chosen, he giddily told me how easy a decision it was, given that the most they’d be out if it failed was $100,000 over the next two years. He was excited by how little risk to which his buying decision had exposed the bank, given how ‘cheap and easy’ it would be to implement.. (I repeat: Oooo….shiny!)

Does this sound familiar?

As our conversation continued, it became obvious that this bank executive was fixated on the $100 per employee cost. It’s how he got buy-in and it’s what he’ll be measured on at the end of the year. However, despite numerous attempts from a variety of people, no amount of persuasion could convince him that there were any other cost considerations besides the check he’d sent to the vendor.  His tight focus on the $100 per employee number meant he wasn’t able to consider anything that might change how he calculated the true cost of the cloud investment. It was clear his emotions were affecting his thinking and by significantly underestimating the true cost of the bank’s IT investment, this corporate sponsor also significantly underestimated the amount of risk the bank faced if the project failed.

Consider This

Industry estimates suggest the true cost of a cloud implementation is anywhere from 3 to 10 times the price of the system. To put that in hard numbers, even if the vendor is selling you the new system for only $100,000 per year, you’re staring down the barrel of a $300,000 to $1,000,000 in true costs.

And industry estimates suggest IT projects fail at a rate of 60 – 70%. (Oh. Not so shiny.)

Miscalculating an IT investment’s cost and opening up the organization to more risk means it’s even more important that you take action to make sure the system generates real value and capture a high ROI as soon as possible after go-live. After you adjust your estimated expenditures to reflect something closer to reality, you need a way to create value, produce positive ROI and mitigate the risk. How? It’s deceptively simple: get people to use the system. How do you do that? User adoption plans.

What It Means For You

When you consider all the costs of your cloud system, you probably have a lot more at risk than you originally expected.  You therefore need to make sure you get more value from the system to justify the additional risk.  You need to be able to demonstrate that your cloud system is being used and is creating real, measureable value. But how do you get people to use the system?

It’s really not about the technology, it’s about behavior. Changing the technology is the easy part (relatively). Changing peoples’ behavior takes a strategy and a way to execute that strategy, including having the organizational infrastructure, necessary skills, knowledge, experience, and, of course, executive support.

Things to Think About

1. What non-subscription costs do you need to include when determining your true cost of your cloud investment?  Where else are you spending your time, resource, money and effort to purchase, implement and support your cloud system? 

As the saying goes, “Time is money”, so calculate it as such. In addition to the price of the software if nothing else, figure in the costs associated with the full disruption of this project, from initial research to cost of training for future employees, by including the following in your calculations:

• how many people are involved
• rate(s) of pay (or a blended average)
• for how many hours
• over how many months
• plus lost productivity

2. If your updated calculation has a higher cost basis, how does this affect your business case/ ROI forecast? What level of user adoption do you now need to make sure you get the benefits you need to justify the investment? 

Many IT business cases fall down because they assume 100% user adoption.  But what happens if you only get 40% effective adoption? 60%? 80%?  Does your cloud investment still look attractive?  Think about adjusting the business case for different levels of adoption, over various periods of time and see if the business case still makes sense.

3. Do you have a comprehensive strategy that ensures you reach your target level of user adoption?  How will you ensure the highest rate of adoption possible? Do you have the resources, time, knowledge, skills or infrastructure to drive and sustain effective user adoption and achieve your ROI goals?  If not, how will you get what you need?

IF ONLY IT IMPLEMENTATIONS WERE JUST THIS EASY

In the days of yore, Ron Popeil, infomercial pioneer, made it look easy.

He invented a kitchen gadget to make our lives easier, and the only direction he gave was ‘set it and forget it’. One step to make a “delicious six lb. chicken!” or “not one but two delicious rotisserie chickens!” How much simpler is that than the way our moms and grandmothers cooked chicken?

If only the rest of life were that easy.

Especially new software systems.

In an ideal world, your IT team would come in, install the new software, and it would be such an great experience they’d just magically sit down and start using not only because it’s easy to use but because they want to use it. This scenario is as likely to fool the seasoned implementation manager about as well as Hair in a Can spray dispelled notions of impending baldness.

So what are you to do when – as typically happens – you introduce a new system, everyone’s excited at launch time and then several weeks (years) later you look at the usage statistics and you’re disappointed. What happened? Looks like you set it and forget it.

But people were trained, you say. We worked for months to convince them this change was a good thing, you insist. They were even kind of excited, you protest. On top of that, they’d had no choice but to use this new system and things still aren’t working out as you’d hoped. Now what?

Fundamentally, IT systems and user adoption are not set it and forget it kind of things.

Typically IT implementations follow a simple formula: go-live and go home. But the users don’t go home and they are what makes -- or breaks -- any IT investment.

In today’s world everyone needs to maximize the ROI of any IT investment, and the only way to realize that ROI is by holistically taking care of the people who use it.

It’s not traditional thinking but after go-live, users need constant care and feeding, no matter the system, no matter the type of implementation, no matter the organization. 

So what do you do? You need to do something, you know this. But what?

1. Assess the situation for your user

2. Develop a plan accordingly

3. Assign someone responsibility for executing that plan

4. Create the infrastructure so that person, and the plan – and your users – will succeed

The fact of the matter is, an IT implementation doesn’t end at go-live, but rather it begins there. The world –inside your organization and with your competitors’-- is constantly changing. People will always need new and different information, there will always be turnover, and you will need specific people focused on getting the value you need from this investment. Only when people use the technology will you get the value you want.

WHAT IT MEANS FOR YOU

‘Set it and forget it’ is how implementations used to be delivered. But the world has changed. These days you need to build a flexible, scalable and sustainable user adoption strategy before you implement your system. You need to map out the necessary efforts and actions your organization will take so it can extract the maximum business value from your investment. Comparatively, the technology side is easy; it’s all 1s and 0s and it does what you tell it to do. It’s the human element that complicates matters and requires you to focus more on the people and the organization than on the technology and the tools.

THINGS TO THINK ABOUT

• How do you do implementations? Do you typically take a holistic approach, or do you set it and forget it? What have you experienced?

• Whose job is it to make sure this happens? Do they have the skills?

• Do you have the organizational capacity and willingness to carry out a sustainable user-focused program?

• Does your internal team have the skills and experience to address these issues?

• Do you have the infrastructure to achieve this in a fast, flexible and affordable way?

• For examples of what to include in a holistic user adoption strategy, go to MyUserAdoptionPlan.com

And if you’re not sure how your project may be affected take the challenge. After all, saying they have no choice but to use it is ultimately counter-productive when you have the choice to be proactively motivating people to use it.

RELATED RESOURCES

• Take the User Adoption Challenge to see what specific user adoption issues you face on your IT project.

• Schedule a demo of Tri Tuns' "My User Adoption Plan" portal to see how it can provide a comprehensive infrastructure for ensuring effective stakeholder engagement & communications over the life of your system.

• Read "How to Sustain High CRM User Adoption" to learn more about how to have successful CRM (or other systems) implementations.

• Read "Does your User Adoption Methodology Remove Organizational Barriers" to learn about the limitations of traditional IT implementation and Organizational Change Management methodologies and how you can overcome these shortfalls.

Was this information helpful?  What did you learn?  We want to hear from you - please add a comment below.

The 787 SHOWS US THAT NEW TECHNOLOGY BRINGS NEW RISKS 

REPORTED

The Boeing 787 Dreamliner has been hailed as a revolutionary advance in technology that will provide the greatest advance in air travel since the Concorde.  The Dreamliner uses new materials and technology and promises to cut 15% off its weight, dramatically lowering fuel consumption and costs.  It’s obvious why airlines are salivating to get their hands on it.

However, like all new technologies, great advances come with great risks and lots of “unknowns”.   The Daily Mail cites a recent GAO report that states while the Dreamliner is safe, it has introduced new risks and even the inspectors don’t know how to manage the new technology or how the risks change over time.

“U.S. inspectors said they do not know what to look for when the new composite [plastic wings & fuselage] starts to fail. …The report said it is unclear how the 787 will become damaged over time and it is not known what the damage to the composite will look like.”

– Daily mail, 03NOV11

NEW RISKS & YOUR IT SYSTEM

Can you image what will happen to Boeing if in a few years some problem is discovered with their new materials and/or design results in repeated 787 crashes?  Or if the new composite materials turn out to have a lifespan that is only half of that of traditional materials? Lawsuits could fly and demand could be wiped out overnight.   Do you think Boeing is going to monitor these risks and take action to mitigate them?  You bet they are. 

Just like with the Dreamliner, introducing new technology systems into your organization can provide revolutionary advances in capacity and benefits.  The problem is, it also introduces revolutionary advances in risks as well.  Unfortunately, many organizations get seduced by the potential benefits while ignoring the risks.  And they do so at their peril.  Are you going to make this mistake?

CONSIDER THIS

When implementing new IT systems, many organizations focus on getting the system live, but ignore what happens once it is in production.  The value of your system – and the risks – only get introduced after the system is live.  And they continue over the life of the system.  This means that you need to manage the value creation and risk mitigation over the life system.

• The FAA inspectors said they don’t even know what to look for to identify emerging problems with their technology.  Will your staff know how to identify and manage the new risks (and opportunities) that your new IT system will introduce?  How do you know?

• The report indicated that it is unclear how the 787 will become damaged over time and what it will look like.  If left unattended, do you know all the ways in which new IT systems can damage your organization?

WHAT IT MEANS FOR YOU

• Developed the tools, metrics, and reporting to give you visibility to emerging risks and opportunities.  You need to identify risks and opportunities as early as possible.

• Establish communication processes and tools that allow you to have 2-way communication with all stakeholders.  This allows you to identify issues and respond back to them.

HOW TO DO IT

If your organization is like most, you probably agree that you need to do this, but you are not sure how.  Tri Tuns can help.  

We work with organizations to develop the infrastructure you need to manage risks and maximize the value of your IT systems.

With our new User Adoption Portal, MyUserAdoptionPlan.com, we help you drive effective user and provide you the capabilities you need to respond to emerging risks, needs and opportunities.  And we can do it faster, cheaper, and easier than you probably thought possible.

In addition, with our expert services, we can provide the advanced knowledge and skills your team needs to make sure they identify risks before they become problems. 

Contact us to learn what we can do for you.

FIND OUT IF YOUR PROJECT IS AT RISK

• Want to learn if your project is at risk.  Take our free online assessment.

• Want to stay updated of how you can get the most value from your IT system?  Sign up for our Quick Tips and Insights Newsletter. 

REPORTED

A recent article by the Corporate Executive Board (CEB), a research and advisory firm to leading organizations, stated that many companies in the Financial Services (FS) industry are increasing their investments in IT solutions, despite the volatile market conditions.  What is shocking is that CEB reports, “only 24% of the controllers we recently asked believe they are realizing positive returns.”  CEB is advising organizations, “to get more value out of finance IT by upholding data standards, aligning IT investments with real business needs, and focusing on end-user adoption”.

TRI TUNS VIEW

At Tri Tuns, we have found that many firms do not have effective User Adoption Strategies.  Effective user adoption programs focus on driving desired user behavior – such as how and when people use the technology, the actions they take to ensure data quality, the degree to which they follow defined business processes, and the actions they take to ensure compliance. The skills and methods required to drive effective user adoption are very different from those required to implement IT systems.  Unfortunately, these are often missing from most IT implementation projects.

The CEB post indicates that only 24% of controllers “believe” that they are realizing positive returns on their investment.  Based on this, consider:

• The remaining 76% of organizations do not believe they are getting a positive return on investment.  This is a ridiculously high percentage.  Even in Vegas you have a better shot of getting a positive return!

• Would you make an investment if you only had a 1 in 4 chance of getting a positive result?  (Well, you might if your portfolio includes shares in Solyndra.)  Before making major IT investments, you should have a clearly defined strategy for when and how you will measure the ROI on your IT investment.  What you will find is that User Adoption is the biggest item on this critical path.  What you will probably find is that you are not doing enough to maximize and sustain user adoption over the life of your system, and this is the leading cause for failed IT investments.

RECOMMENDATIONS

Before investing in IT projects, make sure you have a clear User Adoption Strategy that aligns user behavior & adoption of the IT system with your business goals and IT ROI needs.  Further, you need to determine how will you implement your user adoption strategy and sustain your User Adoption Program over the life of the system.  Be sure to recognize that changes in the levels and effectiveness of user adoption (over time) will change the ROI you receive from your IT investment.   Quite simply, whenever you stop measuring and driving effective user adoption your IT investment is at risk.

TRI TUNS CAN HELP

Tri Tuns helps organizations maximize the ROI on their IT investments by developing and implementing User Adoption Strategies that maximize and sustain effective user adoption over the life of the system.  We conduct User Adoption Assessments, Develop User Adoption Strategies, and provide hands-on User Adoption Program Implementation services.

Tri Tuns also provides the MyUserAdoptionPlan.com, an online User Adoption Portal that addresses all of your critical User Adoption needs.  MyUserAdoptionPlan.com is an all-in-one solution that helps you lower the time and cost to create and maintain user adoption programs, while increasing the effectiveness of your User Adoption Program.  MyUserAdoptionPlan.com is based on User Adoption Best Practices and comes preloaded with the core content you need to quickly define and launch your User Adoption Program.  Contact us to learn more.

The page above is from MyUserAdoptionPlan.com and shows some of they key User Adoption Program areas that you need to address as part of your User Adoption Program.

ADDITIONAL RESOURCES

Dr. Evil teaches us about defining Success

How do you define Success?

Apply What You Learned:  Define Success in terms of User Adoption & Benefits Realization

Best Practices & Key Questions

• Set SMART (Specific, Measurable, Achievable, Realistic, Time-Bound) User Adoption goals for each stakeholder group.  Measure them over time to make sure you are hitting or missing them.  
  • Did Dr. Evil set SMART goals when he asked for sharks with frickin laser beams? 
  • Do you set SMART User Adoption goals for your IT systems?

• Acknowledge when you encounter an "It's a start" moment with user adoption, but still hold people accountable for achieving results.  
  • Did Dr. Evil hold people accountable when they only delivered sea bass when the requirement was sharks with laser beams?  What would  you do?  
  • Do you hold people accountable for hitting User Adoption goals, or are you OK with sea bass?

Related Resources

OBSERVATION

CONSIDER THIS

1. Determine the right staff members become UA team members.  Not always should the same people from the implementation team be a part of the UA team.  That is because implementation team members are typically project managers and technical experts, where as long-term user adoption requires a team made up of system end-users and support staff. 
2. Create solutions that will promote user adoption throughout the life of the IT system.  One such example is creating data quality protocols with methods for monitoring and evaluating the accuracy of data input by end-users.
3. Develop a schedule for enacting each UA phase that minimizes disruption of pre-existing responsibilities for UA team members.  Team members will undoubtedly have pre-existing workloads; therefore it is crucial to set a UA schedule that does not jeopardize any other responsibilities.

THINGS TO THINK ABOUT

RELATED RESOURCES

• Check out MyUserAdoptionPlan.com - an all-in-one User Adoption Portal
• Take the Tri Tuns User Adoption Challenge - a free online assessment tool
• Read: “Does Your User Adoption Methodology Remove Barriers To Adoption?”
• Read: “Design the right metrics to improve user adoption”