5 + 1 Actions CEOs, CIOs, and CFOs Can Take to Increase Software Success
It is widely known that most software investments fail to deliver the expected business results and Return on Investment (ROI). For years research groups have reported the CRM projects alone have a 60 – 70% record of failing to deliver what was expected. What is staggering is that executives have accepted these dismal results for so long and not taken action to address such poor performance. Which makes me think, either they are not aware of the problem (unlikely) or they don’t know what to do to solve it (highly likely).
When I speak with executives across a variety of organizations and industries about how they approach software success, the typical answer is “training”. And yet, while this approach consistently fails to deliver, organizations keep turning to it as the go-to move, each time expecting a different result. Somewhere out there Einstein is rolling over in his grave thinking everyone is insane!
It’s time to stop the crazy-train and start looking for new approaches that will deliver results. Based on over 20 years of experience helping organizations accelerate software adoption and improve their bottom-line results from effective use technology, here are 5 +1 actions CEOs, CIOs, and CFOs can take to get more value from their software investment.
There is no way any organization can justify putting money into a software investment without having a clear, realistic plan for how they will get their value back out of it. History has shown us that just doing a little system training – at the time of go-live – will not deliver the results you want. Your organization operates in a world of perpetual change, and there are a lot of fluid factors that impact the level of adoption and business results you get from your system year over year. When you look over a 10 year period, you see that employees will join and leave your organization, there will be updates and changes to the software, your strategic priorities will change, the competitive environment will change, new government regulations impact how you operate, you might be involved in an acquisition, and so on.
The reality is that to continue to get the ROI you want from your software, you need to have dedicated, skilled resources working to manage all of this complexity, and take action to sustain effective adoption of your systems and ensure you achieve your desired business results. While you won’t know all the specifics of what will change, you can and should forecast out what skills, resources and funding you need to ensure the software delivers the results you need, over a 10 year period. You need to require these resource estimates as part of your initial business case and closely look at them as part of your funding approval decisions.
When I speak with executives about the original business case and forecasted returns they used to justify their software purchase, I always ask them what was the assumed level of user adoption. Inevitably they start to quickly look downtrodden when they realized they overlooked something very simple, yet very important in their calculations. It is almost universal that most IT business cases assume 100% user adoption, from day one, when they are calculated their expected ROI. The assumption is that once the system goes live, they will immediately start realizing all of the cost efficiencies and increased productivity from day 1. And we all know this is not the case.
When developing your business case, you should explicitly state the level of adoption that is expected in any given period, and then weight your expected benefits accordingly. For example, if you know that the system you are introducing is going to be a major change for the organization, you can discount the expected returns in the first year (or two) substantially, while people adjust to the new way of working. Continuing out into the future, you should look at the return you get based on different levels of effective user adoption. If you only get 70% effective use, does your project still make sense? What about at 50%? Or even 30%?
Are you not sure what is a realistic estimate for effective level of adoption? You can start by looking over current and historical user adoption rates and corresponding ROI of other existing applications in your organization. What level of adoption do these applications have? What percentage of the forecasted business benefits have they delivered? Once you realize how big an impact the level of adoption has on your bottom-line results, it becomes easier to justify the resources required each year to drive and sustain adoption.
Many organizations have a project sponsor that is accountable for getting the initial funding and then getting the system live. However, very rarely is the owner accountable for ensuring the system is used effectively and actually achieves the measurable business outcomes and ROI used to justify the investment. One of the simplest things is to make sure that there is always a senior executive who has a meaningful, vested interest in taking action and allocating resources to ensuring the software is used to achieve bottom-line results.
For this to be impactful, you need to make sure there are real impacts for the executive for missing, meeting, or exceeding outcome targets. This often involves some tie to compensation, promotion eligibility, etc. Oh, and if this executive leaves the organization or changes role, you need to formally assign this responsibility to their successor.
As stated above, user adoption and ensuring business goals are achieved requires a lot of work. You will need to have an internal team in place to make it happen. In fact, many organizations now setup internal Software Success Teams. (Some organizations call them User Adoption Teams, User Adoption Program Management Offices, or Adoption Center of Excellence). Regardless of the name, you need to put in place the team that will plan, accelerate, and then sustain the level of user adoption that is necessary to achieve your business goals. There is a lot of planning and preparation that needs to happen to put in place an effective adoption program, so you need to start early in your implementation efforts. In fact, we have worked with one client that brought us in to help setup their adoption program several months before they even selected their software vendor!
We work with a lot of internal technology teams, and it is very clear that most of them don’t have any experience in organizational change management or user adoption concepts and techniques. While IT staff do not need to be experts in adoption, they do need to understand the general practices and the various touchpoints and dependencies that an effective user adoption methodology has with the technology team.
Similarly, very few people on the business side understand user adoption concepts and activities. They will need to understand these as well, especially since they will need to be involved in many of the activities.
To ensure the best results, be sure that at the start of projects that all project members (including both IT and business team staff) are trained on the adoption activities that need to happen and why. You will also need to periodically refresh everyone’s understanding and remind them where they are in the process.
To maximize your results, you will want to have a Software Success Program across all of your applications. After you have experimented on building software success programs for a few of your applications, and have learned what works and what doesn’t work in your organization, then it is time to scale and mature your efforts. Eventually you want to get to the point that you have an ongoing software success program across your entire IT portfolio.
Obviously, there will be different levels of attention required for different applications, based on the size, scale, complexity, and level of investment involved. Also, you can expect that when rolling out new systems there will be changes to the level of expected adoption and value received from other existing applications that may be impacted by the new software. But having an effective program that allows you to measure and manage the costs, resources, and ultimate business value received from each application allows you to best focus your resources and achieve the best overall results.
Taking these actions will greatly increase your overall effectiveness, maximize the value you get from your IT investments, and improve your bottom line. The challenge is that this is new for many organizations and they don’t know where to start. And there are a lot of challenges along the way. You need to avoid making costly mistakes that waste time, effort and resources. Contact Tri Tuns to learn how we can help you quickly setup your Software Success Programs and accelerate your bottom-line growth!
Most software projects fail to deliver the expected business outcomes because of the approach the buyer takes to getting the system live and driving adoption. Most buyer’s organizations don’t have the expertise, tools and capacity to deliver their own success. This short video explains many of the methodological and structural problems organizations face when dealing with software.
If you are looking to help software buyer’s create their own internal software success programs, Tri Tuns can help. Contact us to find out what we can do for you.