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Driving Pervasive Computing in the Fear Economy

Published
  • November 20 2003, 1:00am EST

The largesse and irrational exuberance of the old "new economy" has now been replaced by the furtive glances, dark shadows and indecision of the "fear economy." War, terrorism, financial scandals and economic recession have had profound effects across the nation and within corporate America. Information technology has been particular hard hit as the fear economy’s impact has slowed IT spending across the board and ground to a halt much of the innovation that was occurring within corporate America only a few years ago. Within IT, pervasive computing and other emerging technologies have been particularly devastated as innovation and long-term technology investments are being labelled as unproven and too risky to undertake.

The risks associated within innovation in corporate IT have not changed over the past few years; it is corporate IT’s capacity for risk that has been altered significantly. As potential projects come before the planning and budget decisions-makers, they are no longer judged based on the company’s need for speed or its desire not to be left behind in the Internet age, but by the project’s projected ROI and quantifiable hard dollar return. Projects that promise only vague objectives of "improved decision making" or "increased productivity" are not even making it past the first cut.

Emerging technology initiatives can be successfully driven in this fear economy. Project sponsors need to justify these projects based on their potential for economic return and their ability to manage the risk associated with undertaking them. In order to drive these projects forward, companies are demanding less hype and more quantifiable analysis. In the long run, this return to basics for decision making in IT spending may ultimately be viewed as one of the positives that may come out of this fear economy.

If you trying to garner support and approval for an emerging technology initiative in today’s economic climate, here are some steps that you can take to solidify your position:

  1. Replace Thinly Veneered Objectives with Deeply Grained Hardwood (Dollar) Objectives – Too often business objectives are thin veneers lacking any substance or structure. Have your business sponsor not your IS project manager create these objectives. The IS project manager can facilitate, but it is the business side that knows the project’s objectives the best. As the project manager, you may have to facilitate turning general statements provided by the business side into measurable objectives, but you should not create them.
  2. Support the Corporate Strategy – If your company has adopted a performance management methodology, such as the balanced scorecard, your project needs to be justified within that methodology’s context. If your company focuses solely on financial measurements using activity-based costing, EVA or any other pure financial methodology then make sure that your project’s justification follows this methodology and demonstrates the hard dollar benefits sufficiently enough to stand on its own.
  3. Create ROI What-If Calculator – All projects have a ROI that needs to be projected. The difficulty has always been to design an accurate method for projecting ROI. One effective way is to create a what-if spreadsheet that highlights the potential benefits and lets the project sponsor and other key business-side personnel fill in the blanks. For example, if you were considering a wireless CRM solution, you could construct a spreadsheet that prompted key users to provide input on items such as percent increase in sales, customer retention or number of appointments per day. These percentages could then be linked into your company’s existing methodology, showing the hard dollar return right there on the spreadsheet as the users enter these values. Having more than one person perform this analysis provides a good mechanism for surveying the user base as well educating them on the potential benefits of the initiative.
  4. Manage Risk – Fear and uncertainty drive down an organization’s willingness to assume risk. Most project management methodologies include the development of a risk management plan. Many projects have a binder on a shelf with one in it, but few projects ever attempt to execute their risk management plan. Risk management can be a powerful ally on a project. The development of a comprehensive risk management plan can aid in the identification and management of risks from the beginning. The proper execution of this plan can ensure that these risks and new ones as they appear are appropriately managed throughout the project’s life cycle.
  5. Share the Risk – In this economic climate, vendors are working much harder for every single sale they make. Many vendors will be willing to pony up resources to ensure the success of your project. This ranges from in-house proof of concepts to actual risk sharing during an implementation. If your vendor is promising you a significant return on investment, don’t be afraid to ask him or her to put their money where their mouth is. This is doubly true in the emerging technology arena where every single sale counts. Your company’s name, reputation and the potential for referrals and press releases can be significant motivators for a vendor looking to make a sale of a new product.
  6. Evangelize – Emerging technology projects often involve significant change, and too often change of any type is met with resistance. One of the ways to begin to overcome this natural resistance to change is to relentlessly communicate and evangelize your position. This continual communication starts as the project charter and budget request are still being formulated and continues well after deployment. The evangelization takes on many forms: water cooler discussions, informal/ad hoc demos, scheduled presentations and Q&A sessions, e-mails, etc. The key here is relentless and continuous communication.
  7. Turn Proofs of Concept into Focus Groups – Many proofs of concept efforts overly focus on the technical implementation aspects of a given solution. While it is important to work out the technical issues, proof of concept and prototype efforts need to be used to test the feasibility of achieving your business objectives. Emerging technologies are often associated with a significant amount of behavior and/or process change. It is at least as critical to understand how your users will adapt to these technologies as to know what technical hurdles you need to overcome.
  8. Encourage and Assume Personal Responsibility – In many large enterprises, employees within IT that are responsible for managing large sums of the corporation’s capital have been held to a lesser standard when compared with other areas within the business in that they assume very little personal risk and are likewise offered lesser rewards. A million dollar IT project that is significantly over budget or fails to meet its objectives will generate far fewer ramifications than a million dollar marketing campaign, sales initiative or product rollout that falters. The key concern with this is not that IT is "getting away" with something, but rather the culture this creates. Historically, it has been far too easy to "blame Microsoft" or any other third party and try to subsequently rectify the initiative’s deficiencies in a future release with additional capital investments. In this economy, the project sponsor and the IT project manager should both be asked to share in the risks and the potential rewards of an initiative. They both need to believe in the project’s merits, be willing to stand by its objectives and commit to its success.

  9. Don’t Be Afraid to Stop – Every emerging technology project should have built within it a series of checkpoints that require a go/no go decision to be made. Due to the nature of these projects and their inherent levels of risk, not all of these projects should make it to completion. It is much better to stop a project after expending one-third of the budget than taking a to-be failure all the way to completion.

With the economy seemingly on the upswing, the days of the fear economy may be numbered. However, its impact will likely retain a hold on IT for sometime in the future. Following these back-to-the-basics approaches for improving the rigor in project justifications and project management may be one of the lasting positive benefits that come out of the fear economy.

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