Cultural Change: the X Factor in Technology Implementations

By Tom McFarlane, Founder and Chairman        

The COTS Revolution

Within the last decade, technologists in the U.S. Federal Government fully embraced the promise of commercial off-the-shelf (COTS) and enterprise resource planning (ERP) software. This represented a profound shift. All the computing firepower and high-performance data- processing capabilities enjoyed by corporations were now going to be at the fingertips of agency heads, departmental managers and other workers across the Federal Government. Data was going to be integrated, processes streamlined and standardized, operations made more efficient overnight.

Okay, that’s an exaggeration of the potential of enterprise software, or any technology. But it was a very appealing alternative to the outdated, stovepipe government systems still in place ten years ago. It’s no wonder why government technologists moved forward with implementation so quickly.

In their haste to start producing benefits, those executives and managers charged with leading implementations rushed into development and testing the moment they had approval. In many cases, they failed to engage fully with functional business owners of processes, which were to be heavily impacted by the new systems. In this sense, they made the common mistake of thinking their projects, some of which had multi-year timelines, were all about the technology.

The Challenge of DIMHRS

The Defense Integrated Military Human Resource System (DIMHRS) is a classic example of putting technology before process and organizational factors. Launched in 2003, the DIMHRS project was a huge implementation of packaged software from PeopleSoft and was going to standardize personnel management and payment systems across all branches of the armed forces – Army, Navy, Air Force and Marines. The Department of Defense (DOD) bought one license from PeopleSoft, with the goal of replacing 90 different legacy systems. Projected savings were huge. And they needed to be, given the initial budget of $281 million.

There’s no doubt that standardized systems are a good thing. But the benefits (and especially the projected cost savings) blinded DOD leaders to the fact that each Service had unique needs. The defensiveness and ownership battles started the moment the HR leaders in each branch understood that processes they had used for years – and in some cases had been working hard to transform – were moving to a one-size-fits-all, software- driven approach.

The resistance that followed is the primary reason, in my view, that the original implementation date slipped from 2007 to 2009 and then to an unknown future date. Today, DIMHRS appears to be in permanent limbo. The Army has completed a limited implementation, and renamed its program. Some predict the other branches will cancel their rollouts. Needless to say, original ROI models and benefit projections have not been met.

Leadership & Execution

So what should the DOD leaders and project team have done differently? First and foremost, they should have moved beyond the memo. That’s how this enormous change was communicated across the ranks of the armed forces. Even allowing for the prevalence of mandates and top-down orders in military culture, this project needed to be “sold” by leaders through clear communication and sponsorship. Each Service needed to understand the rationale for change, the practical impacts, the benefits and the risks. Candor in sharing information and the opportunity for two-way discussion is the best way to answer change skeptics — and for DIMHRS, there were many skeptics.

Instead, the project was driven by the DOD’s CIO and, to some extent, by the technology chiefs in the branches. They focused on the technology without understanding the functional impacts, while senior decision-makers promoted the cost savings. It’s possible that many of the decision makers who agreed to the large-scale changes associated with DIMHRS had little or no hands-on experience with the individual functions that would feel the most impact. Thus, it was easy for them to dismiss or underestimate the need for unique, Service-specific processes.

Effective leadership of change means stakeholder groups speak the same language. The key themes of “why, what, how, when and who” all need to be echoed with end- users, too. Last, but not least, training must be accounted for in project plans. It cannot be an afterthought, as it so often is when project teams are focused on their long implementation to-do lists.

The Power of PMOs

In retrospect, it’s clear that DIMHRS needed a much stronger program management office. With a stronger PMO, the DOD would have had a mechanism for capturing stakeholder input at the outset, translating different perspectives and conducting an objective assessment of the probability of success prior to the original decision. Such assessments can help avoid expensive, frustrating ordeals, like that faced by DIMHRS. Indeed, effective communications before, during and after critical decision points is the hallmark of strong decision support structures.

Once projects are launched, PMOs should focus on keeping everyone informed as to ongoing progress and emerging risks. Further, high-performance PMOs help keep leaders engaged and ensure that critical – but often overlooked – workstreams (like training) receive the attention they need. The larger the program, the greater the need for effective PMOs, whose job it must be to break down huge projects into manageable steps and tasks. More importantly, they can keep all stakeholders focused on the big-picture goals and priorities of the project, and drive implementation in a way consistent with that vision. That’s how PMOs execute in strategically aligned fashion.

Bottom Line: Getting to Success

I don’t mean to say that government implementations are destined to failure. There have been some very successful projects, such as the Defense Logistics Agency’s Business Systems Modernization initiative. But our experience tells us that the full potential of technology investments cannot be realized – by the Federal Government or anyone – unless several critical dimensions are addressed, the most important (and most frequently overlooked) being organizational factors, thorough gathering of business requirements and communication.