Driving Enterprise IT Project Success through Independent Program Assurance

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1 Driving Enterprise IT Project Success through Independent Program Assurance

2 Our knowledge is only useful when we apply it, our commitment is only visible when we act on it. Jenny Greyling, Learning & Development Leader, Ernst & Young Africa

3 Driving Enterprise IT Project Success through Independent Program Assurance Information Technology (IT) is an essential aspect of virtually all organizations today, managing the transactions, information and knowledge required to initiate and sustain a business. As an integral part of the business, it is crucial that the Board understands the strategic importance of IT and assumes responsibility for it by asking the difficult questions regarding all IT projects the enterprise endeavors to undertake. Since IT projects tend to be infrastructure-based they are capital intensive and are generally longterm projects whose benefits are only seen months, or even years, down the line. Unless these projects are managed carefully and the Board keeps an eye on them throughout the implementation process they run the risk of going wrong. These could include over-expenditure on the project, overrunning of deadlines and even failure to deliver on the promised features. A recent survey indicates that genuine project success is rarer than enterprises might think, with just 37% of organizational IT projects being successfully completed in A larger portion some 42% - were classified as being challenged, while more than one project out of five (21%) ultimately failed. Moreover, projects that overran on cost generally overshot their budget by almost half (46%). In other words, a R1 million IT project would require and extra R to successfully implement. Worse still were the deadlines which were missed - on average projects overran by 71%, meaning that a year-long project would take almost twice as long to complete. Finally, when the program features were considered, most projects only delivered approximately 74% of the features that were initially promised. If the average enterprise project costs nearly 50% more than budgeted, takes nearly twice as long to complete and only delivers three-quarters of the promised benefits, clearly the Board needs to be asking its CIO some tough questions. The critical message is: the Board s approach to IT projects needs to change dramatically. Effectively, the success of a project is built on a triangle of cost, time and quality which all have a direct impact on each other. For example, should the time aspect need to be squeezed in order for a project to be completed quickly this will have a direct impact on the project s cost. Should a company try to squeeze the cost aspect this will have a direct impact on the quality. Therefore it becomes crucial for corporate Boards to strike the right balance and make the right decisions about a project at the right point. This means looking beyond the initial business case and considering a number of other issues including benefits management, quality and risk management and change management. In other words, it calls for independent program assurance.

4 We are more than a business, we are a driving force for change - for our people, our clients and our communities. Val Davies, Chief Operating Officer, Ernst & Young Africa

5 In this regard, it is of critical importance to have the right partner working with you to consider these diverse aspects of a project. Having a specialist consultant to assist with the management of key challenges that impact large IT projects can be of enormous benefit to an organization. A specialist of this nature enables the enterprise to push the boundaries while still minimizing the risk. The advent of King III has brought about a change in organizational thinking: more and more boards are taking a greater interest in the details of large IT projects. It should be remembered that the Board does not comprise of IT specialists and bringing in an expert consultant to focus on the delivery triangle is a strategic success factor. The skills a consultant brings to the organization should result in a reduction in the delivery time and/ or the cost of the project, and/or an increase in the number of delivered features. The benefit of any of these aspects on their own is in itself reason enough to justify bringing an IT consultant on board. It is clear that partnering with the right organisation can only benefit the enterprise, but it remains crucial to partner with an organisation that fully understands both the requirements and the process involved in Independent Program Assurance. Ernst & Young has many years of experience in IT Program Assurance and is thus ideally positioned to assist organizations in overcoming the many implementation challenges faced by large IT projects.

6 The rationale for ongoing, independent program assurance Effective independent program assurance needs to encompass program and project management; quality and risk management; benefits management; and even change management. The challenges in each of these areas that effective program assurance can help overcome include: Program and Project Management: Work streams not aptly planned, integrated and monitored Long delays in and failure to agree on scope and requirements Insufficient authority applied where decisions are required Teams lacking capability or capacity to deliver requirements Quality and Risk Management: Needs and expectations not understood or managed Risks not adequately identified or actively managed Benefits Management: Benefits not focussed on and/or measured Change Management: Project objectives and organizational priorities which are not aligned People s transition needs not adequately planned for Inadequate stakeholder identification and buy-in

7 Marius van den Berg Director Africa Advisory Banking Sector Leader +27 (0) It is only through listening to our clients and responding to their unique needs that we are able to provide superior client satisfaction.

8 Ernst & Young Assurance Tax Transactions Advisory About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit EYGM Limited. All Rights Reserved. ED 0114 EYG no. AU1652 This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. Studio ref Artwork by Moloi.