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). Here are often-skipped, specific actions that CEOs, CIOs, and CFOs can take to get more value from their software investment.
A long history of software failure
For years research groups have reported the CRM projects alone to have a 60 – 70% record of failing to deliver expected business outcomes. What is staggering is that executives have accepted these dismal results for so long and not taken action to address such poor performance.
Why this long history of failure? Either executives are not aware of the problem (unlikely), or they don’t know what to do to solve it (highly likely).
The problem is the approach
When I speak with leaders across a variety of organizations and industries about how they approach software success, the typical answer is “training.”
While relying on training consistently fails to deliver success, 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.
Over a career spanning more than twenty years focused on helping organizations improve user adoption and getting more value from their IT systems, I have learned many tactics that make a massive impact on success.
You need to plan how you will achieve long-term software success
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. It is time for something new.
A world of perpetual change
Your organization operates in a world of continuous change, with lots of fluid factors that impact the level of adoption and business results you get from your system year over year.
What changes can you expect over the next 10+ years?
- Employees will join and leave your organization
- Updates and changes to the software
- Strategic priorities will change,
- The competitive environment will change
- New government regulations impact how you operate
- You might be involved in an acquisition or merger
- And many more
All of this constant change has a direct impact on the user adoption and value you get from your software. Merely relying on a little training, delivered at the point of go-live, is never going to give you the long-term software success you seek.
To get the ROI you want from your software, you need to have dedicated, skilled resources working to manage all of this complexity. You need to take action to sustain the 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 ten years. You need to require these resource estimates as part of your initial business case and carefully look at them as part of your funding approval decisions.
When I speak to executives about the original business case and forecasted returns they used to justify their software purchase, I always ask them what the assumed level of user adoption was. Inevitably they start to quickly look downtrodden when they realized they overlooked something straightforward, yet very important in their calculations. It is almost universal that most IT business cases assume 100% user adoption, from day one when they calculate the 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.
Use weighted user adoption to adjust your business case / ROI forecasts.
When developing your business case, you should explicitly state the level of adoption you expect for each year over the next 10+ years. How will drops in the rate of effective adoption reduce the benefits you realize each year?
Use this information to adjust the forecasted ROI from your system.
For example, if you know that the system you are introducing is going to be a significant change for the organization, you can discount the expected returns in the first year (or two) substantially. People need extra time to adjust to substantial changes in how they perform their daily job. During this initial adjustment period, adoption is typically low, and productivity usually dips.
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 50%effective user adoption?
- Does the project still make sense at 30% user adoption?
Let history be your teacher
Are you not sure what is a realistic estimate for a sufficient 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?
Justify your adoption resource needs
Once you realize how significant an impact on 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 achieves the measurable business outcomes and ROI used to justify the investment.
Assign a senior executive to be accountable for long-term adoption and success
One simple, high-impact tactic to deliver software success is to ensure a senior executive has an explicit, significant, vested interest in taking action and allocating resources to ensure the software is used to achieve bottom-line results.
You need to make sure there are real impacts for the executive for missing, meeting, or exceeding outcome targets.
To achieve meaningful results, you often need to tie compensation, promotion eligibility, etc., to the executive’s performance plan.
Oh, and if this executive leaves the organization or changes role, you need to assign this responsibility to their successor formally.
You need an ongoing user adoption and success team
Driving long-term user adoption and ensuring that business goals are achieved requires tremendous work and effort.
You need an internal team in place to make it happen.
Many organizations now setup internal Software Success Teams. (Some organizations call them User Adoption Teams, User Adoption Program Management Office (UAPMO), or Adoption Center of Excellence). Regardless of the name, you need a team that will plan, accelerate, and then sustains the level of user adoption that is necessary to achieve your business goals. This team needs to maintain effective user adoption, year over year, over the life of the system. This is no easy task!
Start managing software success long before the software is live!
There is a lot of planning and preparation that needs to happen to put in place an effective user adoption and success program. You need to:
- Define what constitutes success in both the short and long-term
- Build the success team and operating processes
- Analyze the organizational barriers and drives of success
- You need to begin preparing your organization to navigate change before the software goes live
- You need to accelerate software adoption and get employees to embrace new ways of working at the time of go-live
- You need to sustain full, effective user adoption over the long-term
All of this work takes time and skilled resources. The size and complexity of your software project will directly impact the amount of work required to drive success. The more complex and disruptive the software, the more time and resources that are needed to help you manage success.
We worked with one client that brought us in to help set up their adoption program several months before they even selected their software vendor!
New skills and approaches required
We work with a lot of internal technology teams, and 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 a valid user adoption methodology has with the technology team.
Similarly, very few people on the business side understand user adoption concepts and activities. Staff on the business side need to understand these concepts since they will need to be involved in many of the actions required to deliver success.
Train IT and business staff on user adoption practices
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. Ensuring both IT and business staff share a common understanding of user adoption activities enables them to collaborate during the development and rollout process effectively.
You will also need to periodically refresh everyone’s understanding and remind them where they are in the process.
User adoption portfolio approach
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.
There will be different levels of attention required for various applications. These will vary based on:
- The size
- Level of investment. A
When rolling out new systems, there will be changes to the level of usage and value received from other existing applications.
- New systems may divert attention from the use of current systems.
- Functionality deployed in the new system may replace functionality in existing systems, thus lowering the use and value received from the existing systems.
Having a software success portfolio approach enables you to measure, monitor, and manage the costs, resources, and ultimate business value received from each application. You can now focus your resources and achieve the best overall results.
Taking these actions will significantly 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 many challenges along the way.
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 success. This free eCourse explains many of the methodological and structural problems organizations face when dealing with software.
If you are looking to help software buyers create their own internal software success programs, Tri Tuns can help. Contact us to find out what we can do for you.