It would appear that half of all large IT projects massively blow their budgets. According to a study of more than 5,400 UK and US IT projects, carried out by McKinsey and the University of Oxford, the average budget overrun is 45%, with the total overspend coming in at an eye-watering $66 billion. That’s more than the GDP of Luxembourg.
Whilst the largest organisations might buckle under the strain, many others struggle to survive this level of failure. The research found that nearly 1 in 6 IT projects go so badly wrong that they threaten the existence of the company.
Could current HR strategy be part of the problem? Atmosphere have been looking into 5 ways your current HR strategy may unwittingly be allowing technology projects to fail.
Apart from the top strata of management, Human Resources are the only part of the organisation with a transversal perspective on its management and culture. HR is therefore in an optimum position to fully understand the multiple challenges associated with digital transformation.
Why is it, then, that HR are so often left out of the process… until it’s too late?
IS&T is, by the nature of its expertise, focused on implementation of processes and systems. It is geared around the delivery of “stuff”. Yet today, with the increasing consumerisation of B2B technology, successful deployment must be geared around adoption and integration. There are critical `people’ implications. And people generally resist change unless they can see a good reason for it.
The biggest consequential hitches and struggles with digital transformation occur when HR strategy is put in place only once decisions have already been made. Within any organisation, the HR department should be a mutually supportive pre-implementation partner. If you are in HR, this is your area of expertise. You can define requirements, appoint change agents to monitor the “people pulse”, sustain the transformation team through the user-acceptance phase, mitigate the risks and champion the business value of the changes being implemented. Your HR strategy can communicate the benefits that “stuff” will bring.
Technology will rarely (if ever) slot effortlessly into an organisation’s prevailing culture and competencies. There will be frustrations associated with fitting habitual working practices around `the new system’, worries about the level of compromise needed in order to reap its benefits. At worst, there will be such downright opposition that it will never be used.
Technology does not lead, it serves. Suppliers will always sell the feature-richness of their technological tools – the bells and whistles, if you like. It is up to the buyer to assess the value proposition of those bells and whistles. To be fair, suppliers are transparent about what tools can do. The value, however, is derived from what they will do once integrated with the existing attitudes and business capabilities. Will the advantages ultimately overcome the opposition to change? Will it deliver the tangible benefits that have been promised to its users? This is impossible to answer without a capable assessment of the culture and capabilities of the business – the bigger picture - and HR should already be all across this.
Many companies have failed to see that bigger picture clearly enough. For example, a US bank wanted to create a central data warehouse to overcome inconsistencies between three separate data systems. Unfortunately, the team focused purely on developing IT-architectural “perfection” for the data warehouse rather than the desired outcome - fixing the data inconsistencies. Irrelevant data from other systems was unnecessarily included. This created huge amounts of complexity and as a result, the budget ballooned and countless milestones were never reached. After spending almost $10 million, the bank abandoned the project. This example is all too familiar.
HR is in a unique position. It can marry the technical requirements with the overall project goal, mobilise business-to-technology teams that evaluate employees’ desire and need for change, and take steps to gear up the skills and behaviours that support technology adoption. A successful HR strategy will maintain focus on overarching business needs, develop a robust communications plan and ensure stakeholder buy-in along the entire project timeline.
As highlighted by the headline from the World Economic Forum in Davos, the “Fourth Industrial Revolution”, technology has radically changed our lives and our experiences at work. It enables and, indeed, requires new ways of working. This in turn leads to the next major HR strategy objective – a fundamental redesign of how people do their jobs, how they engage, communicate and collaborate with both colleagues and customers.
Hard skills may attract the most attention, but it is soft skills that enable the behavioural change that is so vital for a successful digital and technical transformation. Onboarding, coaching, listening, open discussion outside hierarchical constraints – these soft skills are, of course, comfortably familiar territory for Human Resources. However, they need to be adopted by the wider organisation and require championing, training and reinforcement.
New practices such as distributed or remote working, video and conference communication, shared document solutions, more transparent reporting and processes - all carry enormous risk without the supporting behavioural change. Hacks are always the result of behaviour and not technology, so soft skills championing is no longer a `nice to have’. It is a crucial part of any HR strategy.
In too many organisations, there is a yawning gap around digital transformation that is begging to be filled. The “geeks” are busy delivering the technology, the operational managers are delivering to task. Who, therefore, fills the gap? Who manages the radical cultural shift that is required for the transformation to be successful?
With the emphasis firmly on the H, it has to be HR. Any HR strategy that aims to make technology deployment a success must take account of the major impact on the humans who use it. Getting it adopted and delivering positive company-wide outcomes requires the kind of profound cultural change that only HR can deliver.
Human Resources professionals instinctively understand that when employees feel that their individual needs are being considered, they are more receptive to change. They will know which new behaviours to reward and which to discourage, the change agents to appoint and where to place them. Once the HR strategy is in line with the organisation’s desired future, it is in the best position to get it there. To paraphrase Bill Clinton’s campaign manager James Carville, `It’s the people, stupid.’
Contrary to popular belief, `digital’ is not bits and bytes. And it’s not particularly new. In fact, the characteristics of digital are something our village community-based ancestors would instantly recognise.
Digital is about creating positive relationships and making human connections. It’s about positive employee experiences and value exchange – although by exploiting technology we can do this at a scale that our ancestors would consider science fiction.
These are very human things to pursue. So why isn’t Human Resources at the very heart of your transformation process? Atmosphere can help formulate an HR strategy that ensures technology deployment ties in with your organisation’s vision, with human engagement - on time and within budget. Ask us how we can bring value to your digital transformation.