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The human factor
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High Performance Management: Using people to realize the benefits of technology
Benefits Realization Tools
While benefits realization focuses on an integrated set of activities, it also entails a number of
tools that can be used to effectively perform the tasks:
- Business Case and Metrics
Traditional financial and cost-benefit analysis is a useful tool for outlining and
documenting the high-level benefits to be achieved by the proposed technology. In
addition, it is useful to also examine industry benchmarks to gain a more accurate
understanding of the potential benefits of technologies. Consulting and benchmarking
firms are often invaluable sources of data regarding the impact of information technology
on actual performance and metrics.
- OCM Tools
In order to measure a utility’s cultural gaps, it is helpful to conduct an Organizational
Culture Inventory (OCI), which measures the current and ideal culture in 12 different
areas. This tool helps identify the biggest gaps to enable these areas to be address as part
of the IT project. If the large gaps continue after go-live, there will be significant
end-user resistance to the associated changes.
- Process Modeling Tools
There are a number of approaches that can be used to model and document processes, but
the most effective approach used by our clientele has been to use a best-of-breed model
as a starting point and then tailor it to fit the utility’s unique operating conditions. This
approach is more accelerated and time- and cost-effective than undergoing complete
business process reengineering from scratch.
- Skills Gap Matrices
As part of the job and organizational design activities, it is helpful to develop a matrix
that identifies the required skill set for each major job type as a result of the new
technologies and processes. This matrix can then be used to compare required skills to
actual skills, which can then act as a catalyst for developing training requirements. It is
important to capture both technical skills as well as business process skills in these
matrices. It is also important to evaluate every major job area that will be impacted by the
upcoming changes.
- Process and Organizational Change Implementation Plans
While organizational design and process models are nice to conceptualize and document
at a high level, it must not end there. It is equally, if not more, important to identify the
changes that are necessary to arrive at the “to be” process and organizational states and to
develop corresponding change implementation plans to make the changes actually
happen. For example, how will we change the role of field crews to ensure they use the
new technologies? Will we need to work with HR and/or labor unions to implement the
job changes? How will we roll out new rewards and measurements aligned with the project? These are the types of questions that need to be answered and addressed with
specific timelines and ownership for each task.
- Benefits Realization Scorecards
Once projected organizational and individual target performance metrics have been
identified, it is useful to develop scorecards to track actual benefits performance after go-live.
These scorecards serve as an effective communication vehicle to disseminate
performance results throughout the utility.
The Value of Benefits Realization
Why should a utility implement this type of benefits realization approach? This paper identified
some of the challenges organizations are facing in terms of measuring benefits, which is one
primary reason for including this type of approach as part of a project plan. However, there are
several other reasons that justify the need for these activities:
- Reduced Project Risk
Benefits realization focuses on ensuring that the full benefits of technologies are
achieved, which reduces the risk of the project failing. In addition, preimplementation
activities all focus on establishing the foundation for realizing benefits by addressing
process and organizational change management issues that would otherwise undermine a
project’s success. In short, the approach is focused on achieving quantifiable business
value.
- Close Alignment Between Business and Technical Activities
This approach ensures that processes, jobs, metrics, and organizational structures are
designed to support the technical aspects of the project, and vice versa. More often than
not, business and technical activities are done in isolation of one another and are
significantly misaligned. Even among business activities, such as organizational change
management and process modeling, there is often a disconnect when in fact they should
be very closely aligned. The most successful projects have a core group of individuals
that perform all of the benefits realization activities discussed above with involvement
from other subject matter experts as needed.
- Proactively Identifies and Addresses Obstacles to Realizing Benefits
Since this approach focuses on measuring actual results and addressing benefit gaps, it
inherently ensures that potential obstacles are identified and addressed early in the
postimplementation project lifecycle.
- Provides More Thorough Understanding of “Lessons Learned”
Since a benefits realization approach measures results, identifies benefits gaps, and
implements corrective action to address the gaps, it serves as a wealth of knowledge for
future IT projects in terms of what the project struggled with, what went well, and what
can be improved in the future.
- Better Justification for Future IT Project Approvals
With the actual benefits measurement that occurs as part of this approach, it is far more
reasonable to gain funding for future projects when IT managers can point to previous
successes in terms of actual financial results. CFOs and other financial managers who are
likely to approve such projects are much more likely to give the green light to other
projects when one can point to exact costs and benefits of previous projects. This
knowledge and apparent financial discipline also conveys a great deal of invaluable
credibility to key decisionmakers.
Clearly, there are a number of ways that an effective benefits realization approach can create
value for IT managers and utilities in general.
Conclusion
Given the above discussion of current IT challenges, it is clear that there is a need to ensure that
a utility realizes the potential benefits of technology. Unfortunately, investing millions of dollars
in new information technology without a compelling justification and validation of this
justification is not acceptable in today’s increasingly competitive utility environment. By
understanding and integrating a comprehensive benefits realization approach into IT
implementations, utility managers will ensure that their projects are rolled out successfully and
that the projects translate to wise investment decisions for the utility.
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