Do your technology implementations generate payback?
The answer to the headline — probably not.
The intent of most retail technology implementations is to either increase sales or reduce costs — a financial payback or ROI. Yet, according to the latest Chaos Report from The Standish Group, only 42% of agile projects are considered successful, with 50% considered challenged and 8% a failure. Other project methodologies do not fare as well as agile. Where are you and your technology implementations?
Retail projects are often initiated by executive mandate and Bob Phibbs, the Retail Doctor, points out they “lose communication at every level, often to the degree that the implementers are carrying out a directive without understanding the intent.” This occurs when projects drive the technology success and hope for a payback. However, as we all know, hope is not a strategy. The good news? There is a framework for driving financial success: ROI-Based Implementations.
Benefits tracking and “low-hanging fruit”
Large projects are sold to the executives or the board on aggregate financial payback, and that is typically where the financial focus stops. However, payback comes from discrete benefits and behavior change within the project.
For instance, a new omni-store system will recommend products, cross store/distribution inventory visibility, online buy/in-store return, etc. Each of these functions has a payback that can be identified by the changes that result and knowing what the changes look like when delivered. Ranking each benefit with highest dollar benefit to lowest should guide your focus — highest payback first. The implementation team is tasked with seeing the changes delivered to the store.
The path to acceptance
Acceptance, receiving something willingly, by the user is necessary for success. Many people embrace new technology. But many resist the change that comes with new technology. To gain acceptance, implement the project first with people who like new tech — innovators and early adopters.
Innovators typically do not get upset when a system does not work as planned. They like to be a part of shaking the bugs out. Early adopters enjoy demonstrating the business benefits of new technology. Both gain prestige by being involved early in the process and “advertising” success within their network.
On the other hand, retailers often implement first in locations that are convenient to the development team. Often this approach includes people adverse to new technology and they will “advertise” their dislike of technology to their network. So, start implementations with the folks who will serve the project.
Meticulous plans and ‘muddlin’-through’
New implementations that require behavior or thought change are rarely a success right out of the box. Iterations of the implementation to understand and repair the weaknesses are necessary. Rewrite instructions and training as needed, then implement in another store. Rinse and repeat. Yep, that’s “muddlin’-through,” and it works.
Another key is to make ROI success more important than “date certain” implementations. The irony is ROI-Based Implementations are usually faster than “date certain” implementations.
Phased audience-level training
The “why” of the implementation is critical to successful training. Knowing why gives the trainee a basis to accept the additional effort he/she will go through. The “why” needs to be expressed in a way that any trainee will understand. Explaining “this change will help us understand our customer better” is good. Explaining “the change will improve analytics by…” is not. Experienced people should guide the implementation and not allow users to “self-direct.”
How many new features can people learn and use after a single training? The reality is three. Yet we often ask associates to learn a dozen or more in one sitting. Train a little and then come back and train a little more. To see if the training is successful, ask the trainee to explain: “why and how” the implementation is important. Do not ask: “Do you understand?” They always say: “yes.” If the trainee cannot explain “why and how,” rework the training. Less is more when it comes to behavior change that drives ROI.
A learning organization takes the time to document the lessons of each piece of work and collect them in an accessible way. An office of project management collects lessons from previous implementations and applies them to future implementations. This way the knowledge can be available to others going through the same process. Give those who do future implementations the benefit of organizational learning.
Bill Doran is a partner in Newport LLC.