Poor business analysis The Culprit of IT project Failure

BASIS Quality Forum Presents

“Poor Business Analysis -The Culprit of IT project

Failure”Rezaul Karim Majumder

(Business Analysis Professional)

Agenda

• Introduction by M Manjur Mahmud – Convener BASIS Quality Forum• The Problem Statement • Statistics on Project success rate• Finding the reason : the Culprit • The solutions• The stakeholders role• Ecosystem of a successful Project•Q&A

Most IT Projects Deliver Little or No Business Value

• Too many failed or challenged projects.

• Significant functionality is developed but never used.

• Projects seldom deliver benefits identified in the business case.

The Problem

Project Success Rates

Source: Standish Chaos Report, 2009

Category Description Original1994

Waterfall2011

Agile2011

Successful Project

Completed on time and budget, with all features and functions as specified.

16% 14% 42%

ChallengedProject

Completed, but were over budget, late, or lacking some originally-specified features and functions.

53% 57% 49%

Project Impaired/Failed

Abandoned or cancelled at some point and thus became a total loss. 31% 29% 9%

Project Success Rates

Source: Standish Group Chaos Reports

• Solution was ultimately not used and withdrawn because of lack of user adoption• Solution did not deliver on business case• Solution did not deliver expected business benefits• Solution had poor usability, poor performance, or high error

rates requiring rework

It Gets Worse!!!

The following projects would have been considered successful if they had delivered all planned scope on-time and on budget using the CHAOS criteria, but …

Waste: 45% of Functionality is never used

Source: Standish Group Report at XP Conference 2002 by Jim Johnson

• “78% of Information Systems projects failed to realize even 50% of the originally identified benefits.” Source: Management Today

• “Only 40% of CFOs find that their IT investments are producing the returns they expected. ” Source: Gartner, How to Optimize IT Investment Decisions

• “30-40% of systems to support business change deliver no benefit whatsoever.” Source: OGC, Successful Delivery Toolkit

Where are the Benefits?

Most Projects Deliver Little or No Business Value

Poor business analysis is at the root of most project failures.o Poor requirements

o Poor communications between business and development teams.

o Business cases are mostly used to secure funding and are not used to manage project outcomes.

o Low business analysis maturity levels for most organizations

The Culprit

Top 3 Reasons for Challenged Projects

Source: Standish Chaos Report, 2011

1. Lack of User Input2. Incomplete Requirements3. Changing Requirements

All of these are symptoms ofPoor Business Analysis

The Cost of Poor Business Analysis

1. Companies with poor business analysis capability will have three times as many project failures as successes.

2. 68% of companies are more likely to have a marginal project or outright failure than a success due to the way they approach business analysis. In fact, 50% of this group’s projects were “runaways” which had any 2 of the following:

• Taking over 180% of target time to deliver.• Consuming in excess of 160% of estimated budget.• Delivering under 70% of the target required functionality.

3. Companies pay a premium of as much as 60% on time and budget when they use poor requirements practices on their projects.

4. Over 41% of the IT development budget for software, staff, and external professional services will be consumed by poor requirements at the average company using average analysts versus the optimal organization.

5. The vast majority of projects surveyed did not utilize sufficient business analysis skills to consistently bring projects in on time and budget. The level of competency required is higher than that employed within projects for 70% of the companies surveyed.

Source: Business Analysis Benchmark, IAG Consulting

The Remedy

Deserves true practice of Effective Business Analysis

12

Solution Planning•Develop business case•Define solution scope•Identify stakeholder needs•Develop requirementsSolution Delivery•Monitor project delivery•Assess and validate solution•Define transition requirements•Engage stakeholdersBenefits Realization•Measure performance based on KPIs•Assess performance•Optimize as needed

Effective Business Analysis Must Address Solution Planning, Solution Delivery and Benefits Realization

Business Analysis is Much More than Requirements

Requirements•Requirements Elicitation•Requirements Development•Requirements Management

Enterprise Analysis•Problem Analysis•Business Case

Organization and Process Change•Business Process Modeling•Business Process Improvement•Stakeholder Analysis and Communications•Organizational Readiness•Organizational Change Management

Manage Delivery of Value•Solution Assessment and Validation•Business Benefits Realization•Enterprise Portfolio Management

• Business outcome oriented• Business process improvement skills• Organizational change skills• Broad (not deep) IT technical knowledge• Customer management skills• Ability to conceptualize and think

creatively• Can articulate a vision• Interpersonal skills, ethics, and integrity• Negotiation and conflict management skills• Analytical and communication skills

Business Analyst Role: More About the Business than IT

A Balanced Scorecard View of Business Value

Financial Stakeholder

Internal Business Process Learning and Growth

Delivering a positive ROI for stakeholders by increasing revenues, decreasing costs.

Satisfying the needs of internal and external stakeholders.

Improving performance by reducing cycle time, eliminating waste, avoiding defects, increasing efficiency, and spending less time on non-value added activities.

Helping users adopt the solution resulting in increased skills, high employee satisfaction, and bringing innovation to new and existing products.

7 Business Analysis Techniques To Deliver More Value

• The ultimate success of a project involves much more than successfully delivering the solution on time, on budget, and with all planned scope.

• The main criteria for success is whether the business benefits as proposed during the initial business case were achieved.

Change Project Success Focus to Delivering Value

Why is a Business Case Needed?

• A well-defined business case is an essential first step for delivering more value to the business.

• The successful business case allows the decision maker to confidently choose a course of action. In the end, it answers the question: “Should we undertake this initiative?”

• The Business Case should not be used just for funding. It should be updated and used in the benefits realization management process.

Requirements: Three Perspectives

• Business Perspective – What business needs must be satisfied, and what metrics identify that the project is successful?

• Customer/User Perspective – What problems needs to be solved how will users interact with the solution?

• Technical Perspective – What technology changes are required to ensure that the project’s objectives will be accomplished?

Not adequately addressing all three of these perspectives will result in a suboptimal solution.

5 Types of Requirements

Business Requirements

Stakeholder Requirements

Transition Requirements

Solution RequirementsNonfunctionalFunctional

• According to IIBA’s BABOK, there are five types of requirements.

• The vast majority of requirements management tool only addresses solution requirements.

• Business stakeholder and transition requirements cannot be not ignored to achieve maximum value.

• If your current requirements tool does not support all 5 types of requirements, find a different tool!

Good Requirements are Needed to Achieve Value

Requirement Type Goal

Business Requirements Maximize business value

Stakeholder Requirements

Achieve user adoption and minimize post-implementation productivity drop

Solution Requirements Shorten delivery cycle and eliminate waste through less rework and prioritization

Transition Requirements Minimize post-implementation productivity drop

The Case for Good RequirementsQuality and Cost Savings

As much as a 200:1 cost savingsresults from finding errors in therequirements stage versus findingerrors in the maintenance stage ofthe software lifecycle.

56% of all bugs can be traced toerrors made during therequirements stage

How can better Collaboration betweenthe Solution Team and Stakeholders Help?

• Lack of user input is the #1 cause of project failures.

• Joint ownership of requirements results in lower costs and higher quality solutions.

• Organization change goes more smoothly when users and other stakeholders are involved through the entire lifecycle.

• Effective business analysis is the key for better collaboration between stakeholders and developers.

Who owns Primary Responsibility for Requirements

Budget% of

Target

Time% of Target

Functionality% of Target

Stakeholder Time% of Target

IT 162.9 172 91.4 172.9

Business 196.5 245.3 110.1 201.3

Jointly Owned 143.4 159.3 103.7 163.4Source IAG Business Analysis Benchmark, 2008

Joint Responsibility for RequirementsMakes a Big Difference

• Learn background and purpose of project

• Document and express needs

• Document business rules

• Gather relevant background materials

• Review and validate requirements

• Participate in requirement prioritization

• Review design documents

• Participate in software and prototype demonstrations

• Participate in retrospectives and capturing lessons learned

• Provide additional information for unclear requirements

• Build test scenarios and test cases for user acceptance testing

• Perform user acceptance tests

• Approve changes to requirement specifications

• Define transition requirements

• Help prepare the organization for change

Engage your Stakeholders!!!

What is Solution Scope?

Project Scope Solution Scope

Project Scope includes the work needed to create a product or deliver a service or result. Project Scope defines the work required to create and deploy the product. The project scope statement is prepared by the project manager.

The Solution Scope describes the characteristics, features, or functions of the product or service to be built. Solution scope is all about the solution to be implemented: how will it look, how will it function, and other characteristics, etc. A business analyst prepares the product or solution scope.

Why is Solution Scope important?

• Solution scope consists of high-level Features of the proposed solution.

• Features should be prioritized based on business value.

• Features are used to capture stakeholder needs and organize requirements.

• Using features significantly reduces solution scope creep.

• Using features is highly-beneficial for both Agile and Waterfall development, as well as implementation of Commercial Packages.

• Managing Features = Managing Business Value

Carefully defined solution scope is key to prevent scope creep, deliver value, and

serve as a basis for gathering user needs and developing requirement specifications.

Two Types of Value for the User

Value is helping the user get a job done faster, more conveniently, and less expensively than before.

Pain Relievers Gain Creators

Identify and Understand Your Users

• Identify all your various types of users

• Prepare a persona for each user type

• The personas should contain:

Responsibilities

Systems and Services Used

Profile

Expectations

• Review the persona with real users to ensure that it adequately represents their view.

• The business problem was poorly defined giving rise to a flawed business case.

• The business case was poorly developed and established an incorrect or unrealistic expectation.

• Requirements for the solution were inaccurate, incomplete, or were poorly defined.

• Delivery of the solution was poorly executed. • The technical solution was fundamentally flawed. • The delivered solution was not effectively adopted by the

business. • The business changed significantly between inception and

project completion.

What are the Key Reasons Expected Business Benefits are not Achieved?

Value Index

Business Benefits Received-----------------------------------

Solution Cost

• Benefits realization starts with defining a realistic business case.• Benefits do not just happen. • Benefits realization has its own lifecycle.• Benefits rarely happen according to plan.• Benefits realization is a continuous process of envisioning

results, implementing, checking intermediate results, and dynamically adjusting the path leading from investments to business results. • Benefits realization is a process that can and must be

managed, just like any other business process.

Benefits Realization Management

Benefits Realization Management

1. Validate and Re-Validate the Business Case

2. Create Benefit Realization Accountability

3. Create a Benefit Realization Management Plan

4. Measure and Evaluate Benefits Realization at Key Points

5. Identify Problems and Document Solutions

6. Continually Optimize Processes, Organization, and Technology to Achieve Benefits

7. Create a Benefits Dashboard

Benefits Realization Management

• Done for every project

• Never

• Occasionally for high profile projects

Poll

To what extent does your organization perform benefits realization management ?

Portfolio Management is a corporate, strategic level process for coordinating successful delivery across an organization's entire set of programs and projects.•To obtain the highest return from your available resources given an acceptable level of risk.•To ensure balance – in terms of investment types and organizational strategies.•To ensure funding allocations reflect business priorities.•To reallocate funds when performance deteriorates and/or priorities change.•To manage dependencies, constraints and minimize double counting of benefits.•To manage Portfolio-level risk and uncertainty.•To provide transparent reporting on performance from strategic intent to benefits realization.

Portfolio Management

Portfolio Management is More Than Just Projects

ProjectPortfolio

Strategy

PPM

IT ServicePortfolio

Technology

ITSM

ProcessPortfolio

Process

BPM

StakeholderPortfolio

People

Org. Change

• Project Portfolio Management (PPM) is often not understood or embraced and is often managed quite haphazardly.

• PPM is often has different tools and processes and organizations to manage projects, processes, applications, and IT services.

• Enterprise portfolio management involves addressing strategy, people, process, and technology.

Value Are the benefits worth the effort and risk?

Alignment Do the projects contribute to the strategic goals of the company?

Innovation Are we willing to invest something new and will we gain a competitive advantage?

Fit Do we have the resources and skills to complete the project?

Portfolio ManagementManaging for Value

Optimize•Re-Scope•Re-Classify•Re-Assign (resources)•Re-Design (merge)•Remove (cancel)•Reschedule

Evaluate•Value•Alignment•Fit•Innovation

Monitor•KPIs•Solution Delivery•Benefits Realization•Stakeholder Satisfaction

Business Value Lifecycle

Portfolio Management Project Delivery Benefits Realization“Doing the Right Projects” “Doing Projects Right” “Harvesting the Benefits”

• Solution Scoping• Business Case• Prioritization• Approval• Closing projects

that are no longer important

• Requirements• Design• Build• Test• Deploy

• Measure• Evaluate• Optimize

Business Analysis

Project ManagementPortfolio Governance

Enterprise Portfolio Management

The Culprit is traced by the TeamSo resist it for Project Success

Next Generation Business Analysis:IIBA’s Business Analysis Framework

Version 3 is coming

There are big changes coming in the role of business analysis. The focus will be much more on understanding stakeholders and their needs, analyzing change, and delivering value.

Understanding how to use these components and the relationships between them results in understanding your stakeholders, what they value, and how to better deliver that value.

Q & A