Digital transformations can fail due to various reasons. Identifying the failure points and the specific mistakes made by project managers can help us understand the key factors behind these failures.
Project managers play a crucial role in determining the success or failure of a transformation project. Regrettably, many project managers prove to be highly ineffective, excelling in certain areas but faltering in essential aspects that can make or break the project's outcome. The problem lies in the lack of proper training for project managers, leaving them unaware of their mistakes.
Today, we will discuss the top 10 common challenges that project managers often grapple with, leading to significant struggles and, in many instances, outright project failures. Identifying these pitfalls can help shed light on the reasons behind unsuccessful transformations. Therefore, let's delve into these 10 critical aspects in the following discussion.
One of the most common pitfalls faced by project managers in IT-related projects, whether it's a digital transformation, ERP project, or any other initiative, is an excessive focus on technology. Often, project managers become overly engrossed and fixated on the technological aspects, leading them to overlook other critical nuances essential for project success.
These other crucial factors include organizational change management, business process improvement, data migration, the integration of different technologies within the overall architecture, and achieving internal alignment. Despite not directly involving the software or technology itself, these aspects significantly impact the project's outcomes.
As a guiding principle, project managers should be cautious if they find themselves spending more than 70 or 80 percent of their time addressing or firefighting technology-related issues. Such a situation increases the risk of failure due to an imbalanced focus on technology, while neglecting the necessary attention to the business-related aspects. Striking the right balance and prioritizing business considerations can substantially contribute to project success.
Another common issue observed with project managers in transformations is their confusion or interchange of project management with program management. It is crucial to distinguish between these two roles. Project management typically revolves around specific work streams within an overall program. However, it is essential to consider the transformation as a whole program, consisting of multiple work streams that require attention.
Certainly, there is a technical work stream that project managers often prioritize, as mentioned in the previous point. Nevertheless, it is equally vital to have other work streams related to organizational change, organizational design, process improvement, data migration, and other critical components that significantly influence the success or failure of the project.
To ensure effective planning and resource allocation, project managers must not perceive their role as merely managing a project. Instead, they should view it as overseeing an overall program with several interconnected work streams that demand careful management. This comprehensive approach will contribute to a more successful transformation endeavor.
The third common pitfall is not being involved enough in the business operations. While I mentioned earlier the risk of being excessively focused on technology, it is essential to redirect some of that time and shift the focus towards understanding your business and its future direction.
This may not necessarily require you to be an expert in all aspects of the business, but rather, you should collaborate with those who do understand it. Partnering with individuals knowledgeable about the business domain will help you grasp the key issues and business drivers. As a result, you can serve as a conduit or translator, effectively conveying the business needs to the technology work stream.
To become a proficient project manager, it is crucial to get hands-on, roll up your sleeves, and genuinely comprehend the business operations as an integral part of your role. Understanding the business landscape and its requirements will significantly enhance your effectiveness as a project manager.
I have mentioned change management multiple times in this video, and a lack of focus on it is one of the most common failure points observed among project managers. Part of the reason for this lies in the nature of project management itself. It is a fairly scientific and tangible role, known for its predictability and hands-on approach. Consequently, most of the training emphasizes aspects such as Gantt charts, tasks, and resource allocations.
On the other hand, organizational change management is less scientific and more of an art. It involves subjectivity and requires understanding the nuances of the specific organization and its culture. Successfully navigating these nuances becomes crucial for effective change management.
As a project manager, it is vital to broaden your perspective beyond technology and operational aspects. Dive into the organization itself and recognize the significance of organizational change management. Ensure that your team includes individuals who can delve into the organization's intricacies and help define strategies to navigate the inevitable challenges that most projects face. Understanding and addressing these organizational challenges will greatly contribute to project success.
Another common challenge is inaccurate scoping, which involves not having a clear understanding of what it will take to successfully complete the project. This issue arises when there is a lack of realism in various aspects, including the time frame, the project plan, the resource schedule, and the budget.
Organizations often encounter difficulties when they start projects with unrealistic expectations. They may base their plans and budgets on proposals from software vendors that do not consider the full scope of the project, especially aspects that go beyond what a software vendor typically handles. These non-technical work streams can significantly impact the project's overall time frame, budget, and resource plan.
When defining the scope, it is essential to consider not only the technology but also other critical areas of the business. Evaluating the assumptions made by the vendor regarding their role in the project is equally vital. Ensure that these assumptions align with your expectations and cover all the necessary aspects of the project comprehensively. Moreover, they should also align with your organization's strategic direction, goals, and objectives.
To avoid common failures, project managers must establish an accurate scope and refine their scoping process thoroughly. Doing so will help in tightening up the project plan and increase the chances of successful project execution.
Similar to an inaccurate scope, an unrealistic budget is another failure point for many project managers. Often, they rely solely on the proposal provided by their software vendor, accepting it at face value and setting a firm budget without considering additional non-vendor-related costs typical of transformations.
To address this issue, project managers should account for non-technical work streams, such as change management, process improvement, data migration, and the integration of third-party systems. These elements can significantly impact the overall implementation cost and should be factored into the budget.
Additionally, considering internal resources is crucial. As the project leverages these resources, it's essential to plan for backfilling their roles to ensure that day-to-day operations continue smoothly.
One effective way to mitigate the risk of an inaccurate budget is to include a contingency plan. Predicting the future with 100% accuracy is challenging for most of us, so having a contingency of at least 15 percent can account for unforeseen circumstances and unexpected surprises that may arise during the project.
By taking these steps, project managers can improve the accuracy of their budgets and reduce the chances of facing budget-related issues during the project's execution.
Another failure point for project managers is a failure to allocate proper resources to the project. It is essential to strike a balance between art and science in this aspect. While a plan may look good on paper, it may not be feasible or realistic for the organization, considering various internal initiatives, priorities, and resource constraints.
It is crucial to validate the assumptions made regarding resource allocation and ensure a realistic plan is in place. If the allocated resources fall short of what is needed to successfully complete the project, project managers should escalate the issue to the executive steering committee for further consideration and possibly seek additional resources.
Regardless, project managers must have a clear and realistic view of the actual resource requirements. This understanding should align with the realities of the organization's day-to-day operations to avoid potential resource shortages or inefficiencies during project execution. By carefully managing and aligning resources, project managers can enhance the project's chances of success.
One significant issue, which I consider among the most crucial out of the ten, is the focus of project managers on merely checking boxes rather than ensuring quality. This distinction lies in the difference between merely stating that a task has been completed or not, and thoroughly assessing if it has been done correctly and up to the required standards.
Project managers often face a challenge in balancing the scientific aspects of project management, which involves completing tasks, with the art of project management. The art of project management requires critical evaluation of deliverables, such as blueprint documents, design documents, requirements documents, test plans, and test scripts. It is essential to scrutinize these outputs to determine not only if they have been done but also if they have been executed effectively and in alignment with the organization's goals and objectives.
Project managers should lead their teams to look at deliverables with a discerning eye, ensuring that the quality is not compromised. By understanding this subtle yet significant difference between merely checking boxes and assessing the quality of deliverables, project managers can ensure the success and efficacy of the project throughout its implementation.
Failing to identify and mitigate risks is another common challenge that project managers face. This is often because project managers may not have enough experience with these types of transformations to anticipate potential risks until they escalate and become evident issues.
Furthermore, those who view project management separately from program management tend to focus primarily on the risks associated with technology, overlooking the operational and organizational risks that may arise after the project's go-live phase. Identifying and addressing these risks demand a combination of both art and science, along with considerable experience in the field.
To effectively manage risks, project managers should establish a quality assurance framework and a risk mitigation framework. Applying their experience and expertise, they can then identify potential risks and take necessary steps to mitigate them. This proactive approach to risk management is critical for the success of any transformation project.
Finally, the tenth common challenge that project managers often struggle with is their failure to recognize the importance of addressing internal alignment and the inherent messiness associated with it. Achieving internal alignment can be a complex and messy process, as most organizations face misalignment to some degree. Although many project managers may try to power through and push ahead despite this misalignment, they will encounter significant headwinds if the issue is not addressed properly.
Addressing internal alignment is crucial for project success. It involves ensuring that the project team is aligned and working together cohesively. When misalignments arise, project managers must actively work towards bringing everyone together to reach a consensus on the path forward. If achieving alignment becomes challenging, project managers should escalate the issue to the executive steering committee or executive sponsor to make necessary decisions.
Clear and decisive business decisions are inevitable in any digital transformation project. Ensuring internal alignment and addressing any messiness related to it are essential to navigate these decisions effectively and make progress on the project.
If you are an aspiring or established project manager, I hope this has provided you with some valuable points to consider. Recognizing and being aware of these failure points can help you avoid them in your future transformations.
I would enjoy brainstorming ideas with you if you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, so please feel free to contact me at email@example.com. I am happy to be a sounding board as you continue your digital transformation journey.