Software Reduces Risk of Running Over Budget

CFOs say they want to deploy new leading edge technology, but cite budget constraints as a barrier to obtaining their most desired technology. That's one of the findings from Armanino's 2012 CFO Benchmark Study.

The backstory to the "budget barrier" finding is that big IT projects have a reputation for running over budget, and frankly, national statistics have supported that perception among decision makers. But there is also mounting pressure on CFOs to upgrade systems in order to remain competitive. The good news is that there are proven methods and a new generation of software applications that best-in-class CFOs are leveraging to reduce the risk of IT implementation and which keep projects on time and on budget.

For instance, John Brooks, a consultant at Armanino helps clients implement an effective new business discovery product called QlikView. He points out that QlikView customers have a 44-percent rate of full deployment within one month of their purchase decision and that 77-percent of customers implement within three months of purchase.

"Products like QlikView are changing perceptions among financial decision-makers who want to deploy leading edge technology, but who may have been concerned about the risks of deployment," Brooks says.

As for the methods, Armanino’s Consulting Partner Chris Moore says "there are a number of steps CFOs can take to drive IT and technology initiatives to successful conclusions." He offers these suggestions:

Make sure your initiative is a high priority - Many companies say they want to implement new technology, but then fail to make the commitments that ensure success. You need to secure full buy-in from senior management and a commitment from the management team to share in the risks and rewards of the implementation.

Scope the project accurately - Budget for adequate project and change management as well as training of end users. The risk of cost overruns rises in proportion to the level of complexity in activities such as data conversion and system-to-system integration so keep your solution as simple as possible. Resistance to change, coupled with the difficulty of gauging the labor and specialization necessary to avoid complex modifications require a well-scoped project and process discipline.

Select a product that meets your requirements - Requirements vary by industry, business processes, markets served and application footprints. Careful analysis of these requirements sets you up to select the right product and match it to your desired software. Review system capabilities and functionality thoroughly and get everyone involved to get employee understanding and buy-in. 

Select a viable vendor - One that has great products, but that will also be around for the long haul. Many innovative vendors lack clear strategic direction and/or scale to provide adequate support. Perform due diligence by reviewing vendors' funding sources, available resource skillsets, business plans, financials and growth and be sure to check market opinion about vendors you are considering..

Assign the best people in your organization to own the project - Be sure and assign your best and brightest to these initiatives. Backstop their daily work with other employees or outsourced vendors to ensure they have enough time to concentrate on smooth implementation.

Lead by example - Lead the project yourself and be accountable. Every major IT initiative should be sponsored by the CFO or CIO. Your commitment to lead and accept a project will inspire your team and others to support you. Hold frequent team meetings to measure progress against your critical path.

Moore adds that managers should align rewards with clearly defined project success factors and adds this tip: "Break projects down into reasonable, short-term milestones or phases that allow quick wins that build momentum and morale," he says.

July 01, 2012