With the government continuing to search for new, more efficient methods of working, its transformation programmes are often highly ambitious and reliant on both working online and implementing new technology. However, in 2008 The McKinsey Quarterly found that about 70 per cent of these transformation projects fail in private industry. Consequently, it’s vital that risk managers in both the public and private sector offer the right advice to senior leaders on the risks involved.
Vision meets strategy
As part of its role in scrutinising government spending, the National Audit Office (NAO) has recently issued a guidance paper for audit committees on the key questions to ask to ensure the success of major transformation projects.
For a transformation programme to succeed, the board needs to have a clear vision for what it wants to achieve. The NAO recommends key questions for risk managers to ask about whether the board is clear on the underlying objectives of the programme and whether they have been examined thoroughly to exclude any unnecessary, weakly-related goals. It also suggests considering: Have the problem and proposed solution both been properly analysed? What exactly will be different in the end and how will the organisation recognise the change? Is the technology involved properly understood and is the timetable realistic?
Once the vision is clear, it should be translated into a coherent programme of work through the transformation strategy. The NAO suggests that risk managers assess whether the strategy identifies all the elements of the affected service, whether it is consistent with wider organisational requirements and whether there are clear milestones and a framework for changes within the programme. It also advises analysing the funding to check whether it’s dependent on realising early benefits and savings and what might happen if they don’t appear.
Naturally, these programmes represent a significant drain on the time and attention of senior leadership, which further sharpens the need for strong leadership and governance to support decision-making. The NAO invites risk managers to consider what the competing priorities might be and whether there is likely to be any churn that could disrupt leadership of the programme. The report suggests ensuring that governance structures are clear and simple and that technical decisions are based on business objectives rather than on the technology itself.
As a transformation programme changes over time, it becomes ever more important to ensure the right progress is being made. Risk managers should monitor whether the programme is uncovering a large number of unresolved issues or if it’s becoming more difficult to track progress, suggests the report. Is success limited to the easiest tasks with more difficult elements being deferred or dropped? Are decisions being made early or are they being led by funding or under-delivery issues? Are issues being explained away without clear evidence?
Here, performance management is crucial – which in turn relies on clear and robust performance data. Proposed questions for risk managers include whether performance is well defined or whether there are symptoms of an inadequate approach being adopted. Has management information been delayed or deprioritised? Do managers rely on live performance data? Is there a shortage of staff or over-reliance on contractors? Is management of sufficient quality and do they properly understand the input of external experts?
Management must eventually make the transition to business as usual, ensuring that the relevant departments have plans to realise the benefits of the programme. As they often depend on the adoption of new processes and systems by staff and external users, it’s important to evaluate whether there has been enough communication and training, as well as sufficient capacity in transition. Risk managers should also gauge whether the maturity of the service is properly understood and whether any requirements for future skills and capacity have been properly tested.
Finding the benefits
A key test of the benefits of a transformation programme is whether they have been achieved by genuine improvement as a result of the programme or through other means, such as passing costs on to users or other services. For risk managers, the NAO says this means asking how the new processes compare with original expectations, whether there’s a clear benefits realisation plan and whether it’s possible to measure those benefits.
With technology often playing a central role in transformation programmes, another test is whether it has resulted in marginal improvements or a more fundamental change in processes and ways of working. An obvious benchmark is whether the service is ready to be used and tested publicly, but the NAO also recommends checking whether the new solutions integrate with legacy systems and whether sufficient prominence has been given to quality and timeliness of data.
This is especially important because data plays a central role in determining what is possible when it comes to reshaping services and ways of working. The NAO tells risk managers to be clear as to whether the programme has set out the role of data in transformation, whether there is a data strategy with clear responsibilities and whether improving data leads to benefits independently of transformation. Only then can transformation programmes be truly judged on their genuine merits.