The C-Suite doesn’t need the details of every project in your Digital Transformation, but there is certain information that they absolutely must track to achieve full transparency.
Program vs Project
We previously explained how digital transformation impacts the entire company and, therefore, requires an enterprise strategy that balances culture and technology. When you build your digital transformation strategy, you’ll define strategic objectives and measurable goals. These are meaningful to the C-Suite and Board but are generally too esoteric for the staff.
The best practice is to work with staff representatives across the company to translate those objectives and goals into action plans. The term “action plan” is synonymous with “initiative” or “project”. For now, we’ll simply refer to projects.
We can communicate projects across the company so employees will understand what they are – much better than digesting strategic objectives.
A “program” is a collection of related projects. Your entire digital transformation may be a program or, depending on the size and complexity, you may have multiple programs under the digital transformation umbrella.
Each project will have a project manager. At a minimum, the project manager is tracking the half dozen or so critical deliverables that tell you if the project is on time, within scope, and on budget. For example, you may have a critical milestone for gathering business requirements, one for designing the solution, one for building the solution, one for testing, and one for rolling it out to the customers or business. These types of milestones apply to process changes, software development, product development, and probably any other type of project.
Some projects will have very detailed work breakdown structures with hundreds or thousands of tasks. These may be crucial for managing a project team, but the C-Suite should not be concerned with that level of detail.
We said a program is a collection of related projects. The program manager needs to understand the links between those projects and the domino effect if one project encounters challenges.
We often create a program plan that simply consists of the critical milestones for each project within the program. It also includes the links, or dependencies, between projects. For example, a delay in a milestone in one project may cause us to look at other projects that are dependent on the first. Maybe the next project can’t start yet. Maybe we’re in the middle of another project that’s dependent on a deliverable from the first. Visibility into the inter-project dependencies gives us the necessary information to shift resources, adjust schedules, and understand any budget impact.
The Iron Triangle
There are only three things we can control in a project. They are time, scope, and budget. If we miss any one of those, the entire project may fail, or quality will be materially diminished. Time, scope, and budget are often referred to as the iron triangle because they are connected, and you can’t alter one without affecting the other two.
The C-Suite needs complete transparency into the iron triangle for your digital transformation program(s).
Project managers may track minute details and program managers will track a collection of related projects and their inter-project dependencies. These players tend to be the first to identify risks to projects and programs.
If individual tasks encounter challenges, they may or may not affect the time, scope, or budget for the entire project or program. It’s the responsibility of the project manager to identify these risks and present mitigation options to the executive sponsor.
If any task or collection of tasks is at risk, and it affects the time, scope, or budget of the overall project or program, then escalation to the C-Suite is critical. They may then approve a new timeline, a reduction or change in the scope of the project, or a budget exception. They also must understand the implications to the overall objectives and goals of the digital transformation strategy.
Reporting to the C-Suite
We should always document the business case for a digital transformation or any other major initiative. The C-Suite needs to see the cost/benefit analysis with specific line items describing cost savings and revenue gains, including who on the executive team owns each.
The program manager(s) must understand how their collection of projects contributes to those financial benefits. Any time a risk is escalated to the C-Suite, along with the recommended time, scope, or budget adjustments, the program manager must also present the impact to those financial benefits. Armed with that information, the C-Suite can understand the full business impact.
So here are some recommendations for the C-Suite regarding digital transformation projects and programs.
- Ensure that business benefits are clearly documented at program initiation, along with the executive that owns each benefit. Track progress toward these goals at least monthly. Early in the program may be too soon to predict but, as it progresses, the teams will understand whether they’ll achieve the goals. And here’s a helpful hint. Encourage the sponsor(s) and program manager(s) to validate requirements and design against the desired goals and question the teams regularly to keep them focused on the bigger goals rather than just individual tasks.
- Have your program manager(s) maintain a simple Gantt chart of critical milestones for the overall digital transformation and review that monthly. The chart may just be colored bars next to milestone names in a spreadsheet or slide. Color those bars green, yellow, or red, representing, respectively, that the milestone is on track, that there is potential risk with time to mitigate it, or that we missed the timeline, scope, or budget and must reset the remainder of the plan.
- Track actual spending vs budget. If you track internal resources, your program manager(s) or executive sponsor(s) will have the required salary information. You’ll probably also have outside consultants or vendors. Track the expenses weekly, or at least monthly. If expenses are running low, there’s a good chance that the project is falling behind. Use this as a check and balance against the Gantt chart. If expenses are tracking high, and the project is on time, be prepared to approve budget exceptions down the road.
- The executive sponsor(s) or program manager(s) should present a list of issues every week (or at least monthly), along with steps being taken to mitigate them. This dialogue ensures that the C-Suite is fully aware of risks and encourages the sponsors and program managers to be transparent.
- Celebrate wins. As major milestones are achieved, recognize the teams and congratulate them. A simple email or walking into a team meeting does wonders for morale.
If you’re part of the C-Suite or the Board, these five recommendations give you the transparency you need to understand how your investment is being managed.
Conclusion
I’ve worked for Global 500 companies as well as smaller organizations. And I have friends and colleagues that also have big company experience. We often lament about how project/program status reports get scrubbed as they go up the chain of command. The program manager reports a risk. A director softens the language. A VP has it changed again. And so it goes. By time the report reaches the C-Suite, everything looks great.
And then the delays, scope reductions, and budget exceptions sneak in as if nobody saw them coming.
Transparency is essential. Without it, the C-Suite loses control and misses the opportunity to make informed decisions about current and future operations and strategies.
You can spend as little as 30 minutes a month to stay informed about your digital transformation. And your engagement will keep the sponsor(s) and program manager(s) on their toes. It will also demonstrate to the project teams that executive leadership is serious about, and supportive of, the digital transformation efforts.
I was interviewed a few years ago by Gartner analysts from around the world. They were asking why the majority of digital transformations fail and what can be done about it. As I provided my advice, one analyst asked what’s different about digital transformation versus any other major change initiative. I replied that if you stumble on an ERP implementation or a CRM deployment, it may cost you some time and maybe millions of dollars. But if your digital transformation fails, it may cost you your entire business. I watched as the mosaic of heads on the Zoom screen simultaneously sprung back. There was a brief silence. And then the remainder of the interview took on a very serious and urgent tone.
Remember, you’re embarking on a digital transformation to create a differentiated customer experience. You’re seeking a sustainable competitive advantage. Your competition is probably doing, or seeking to do, something similar. And there may be some kids in their parents’ basement preparing to disrupt you. The stakes are high. Seek the right guidance and stay involved through the recommendations I provided here.
What’s Next
In the coming weeks we will cover the following, critical aspects of digital transformation:
- Resource Planning and Performance Objectives
- Executive Sponsorship Role and Accountability
- Measurement
- Change Management
- Scope Management
- Marketing and PR
- Staff Challenges and Surprises
- The New World After Digital Transformation
If you’re embarking on a digital transformation, planning to do so, or just don’t want to wait 12 weeks for all of these articles, just email Emily at Emily@WolffStrategy.com and she’ll be happy to schedule a call with me to discuss any or all of these topics.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management and Digital Transformation. Larry has served as CEO, COO, CIO, CTO, chief digital officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
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