Why Performance Management Projects Fail.....

After 20 years of enterprise software and well over a decade of witnessing budgeting, planning, consolidations and other performance management implementations, there is a single common thread I almost always see in failed projects.

Many people will say bad requirements, over aggressive scheduling, or a litany of other reasons that do contribute to failure – but are really just symptoms of the real problem; which is no one started out to build a new budgeting, planning or consolidation system.

No one wakes up in the morning and goes; “Gee, we need a new budgeting system”. What generally happens is that at a weekly/monthly/quarterly executive meeting (or worse board meeting) the CEO picks up the fancy fat binder – which we will generically refer to as the “briefing book”-- and sends it flying across the room.  As the other execs at the table suddenly occupy themselves with their shoelaces, the CEO starts saying things like; “I can’t run the business with this – it’s out of date, wrong, and shows me nothing about the future.”  Actually there are other adjectives in there, but this is close enough for polite company.

And yes, I have personally witnessed this. A number of times.

What happens next is the CFO invariably steps in and says; “We’ll fix it” -- which begins a process of some seriously smart MBA types sitting with the CEO/COO/CFO/XOOs to design a new book. Along the way they discover things like; “We don’t have this data…we will need to look at new BI/Planning/Consolidations solutions.

So the smart MBAs set up to meet with the appropriate team members – typically either in the VP of FP&A or the Controllers’ office. And this is where it begins to go horribly, horribly wrong – because none of these people witnessed the flying binder bit.

Instead these people view the “New” system not as an expression of the senior executive requirements – but as automation and increased capability over the existing system – and start adding requirements to serve their normal cadre of business users.   Worse, even if the team has the executive requirements on the list, they are the first to get cut because they are much harder (haven’t been done before) than the ones that they already know and just need to recreate.

Roll the calendar forward 9 -12 months and the team is getting ready to roll out the new system. Unfortunately it’s a multi-million dollar recreation of the existing system – and has few, if any, of the components needed to drive the “new” briefing book. Of course the CFO looks at this and goes “What is this….I gave you $XX millions, where is what I asked for?”

And it doesn’t get better from there….

So, the obvious question is how do you avoid this scenario?

The answer is simple; make everyone understand that this is a flying briefing book project, not a budgeting/planning/reporting system. And what is the best way to do that? Equally simple – you already have a powerful artifact that shows what not to do; the original briefing book. Keep it close, show it around, and constantly compare it to what is being done – if they bear any resemblance to each other take a time out, and get back on track.