News
 
08 May 2019
Effective management of digitalization programs: Back to the roots!

Imagine you have an important customer appointment in an unfamiliar foreign city. You travel there by car and have to be on time. You are unfamiliar with the roads, buildings and other landmarks and are relying completely on your GPS to reach your destination safely and quickly. And what does your GPS do? It only shows you the next 200 meters, combined with simple instructions like "turn left" and "turn right". No route planning, no estimated arrival time, no alternatives. Sure, you will reach your destination somehow at some point – maybe even in time. But did you have a good feeling on the way?

Maybe this little story seems surreal to you. But it is a good analogy to digitalization programs. In principle, the goals of such programs are known – even if they are blurred and vary from time to time. However, the path to these goals follows unfamiliar "agile" rules. Team members enthusiastically present incremental developments in "reviews". The impression is good, you can see an intermediate product that is already usable. But has their progress been efficient? Would there have been cheaper or faster routes? You are rarely given reliable answers to these questions. If someone from the Controlling department responsible for costs, for example, asks why that is the case, it will quickly become apparent that there is no convincing, methodical concept for managing digitalization programs.


Of course, even very large agile projects with volumes >100 million euros can be managed with scaled approaches such as Large-Scale Scrum (LeSS) or Scaled Agile Framework (SAFe). However, complex programs with both agile and classically controlled individual projects are not manageable with these approaches. There are too many differences in the objectives, approaches and procedures of the individual projects to be successfully managed with LeSS or SAFe.


In these situations, it is helpful to return to the proven core elements of successful project management.  At the end of the day, the costs, quality and time of individual projects must be managed in large digitalization programs as well. In addition, projects must be wisely selected, prioritized and - if necessary – terminated. In other words, effective portfolio management and risk management are essential. Integrating these five elements at a centralized program level provides a strong basis for effective and efficient program management.


Additionally, you have to be able to standardize the management-relevant information of all projects in the portfolio. In particular, this means being able to report on budget, deadlines and milestone achievement for agile projects. In practice, digitalization programs are measured by top management against classic standards such as milestone achievement.


Fortunately, agile project instruments offer excellent possibilities for information conversion to the "classical" context: Burndown charts, for example, hardly differ from the earned value method of project progress measurement. And product backlog estimates continuously provide updated information on the required residual budget until the end of the project.


Practical experience in large digitalization programs shows that these can be managed effectively in terms of costs, quality and time – even if both classic and agile activities can be found among the individual projects. The prerequisite is an integrated and pragmatical setup of control instruments that addresses all essential dimensions of project success and with which it is possible to make the relevant information of agile projects understandable for "classic" overall program control. Consequently, it is not a methodical "silver bullet" such as LeSS or SAFe that makes large digitalization programs manageable, but a sensibly applied canon of familiar instruments and techniques - "back to the roots" in a new environment.

 
News
 
Effective management of digitalization programs: Back to the roots!

Imagine you have an important customer appointment in an unfamiliar foreign city. You travel there by car and have to be on time. You are unfamiliar with the roads, buildings and other landmarks and are relying completely on your GPS to reach your destination safely and quickly. And what does your GPS do? It only shows you the next 200 meters, combined with simple instructions like "turn left" and "turn right". No route planning, no estimated arrival time, no alternatives. Sure, you will reach your destination somehow at some point – maybe even in time. But did you have a good feeling on the way?

Maybe this little story seems surreal to you. But it is a good analogy to digitalization programs. In principle, the goals of such programs are known – even if they are blurred and vary from time to time. However, the path to these goals follows unfamiliar "agile" rules. Team members enthusiastically present incremental developments in "reviews". The impression is good, you can see an intermediate product that is already usable. But has their progress been efficient? Would there have been cheaper or faster routes? You are rarely given reliable answers to these questions. If someone from the Controlling department responsible for costs, for example, asks why that is the case, it will quickly become apparent that there is no convincing, methodical concept for managing digitalization programs.


Of course, even very large agile projects with volumes >100 million euros can be managed with scaled approaches such as Large-Scale Scrum (LeSS) or Scaled Agile Framework (SAFe). However, complex programs with both agile and classically controlled individual projects are not manageable with these approaches. There are too many differences in the objectives, approaches and procedures of the individual projects to be successfully managed with LeSS or SAFe.


In these situations, it is helpful to return to the proven core elements of successful project management.  At the end of the day, the costs, quality and time of individual projects must be managed in large digitalization programs as well. In addition, projects must be wisely selected, prioritized and - if necessary – terminated. In other words, effective portfolio management and risk management are essential. Integrating these five elements at a centralized program level provides a strong basis for effective and efficient program management.


Additionally, you have to be able to standardize the management-relevant information of all projects in the portfolio. In particular, this means being able to report on budget, deadlines and milestone achievement for agile projects. In practice, digitalization programs are measured by top management against classic standards such as milestone achievement.


Fortunately, agile project instruments offer excellent possibilities for information conversion to the "classical" context: Burndown charts, for example, hardly differ from the earned value method of project progress measurement. And product backlog estimates continuously provide updated information on the required residual budget until the end of the project.


Practical experience in large digitalization programs shows that these can be managed effectively in terms of costs, quality and time – even if both classic and agile activities can be found among the individual projects. The prerequisite is an integrated and pragmatical setup of control instruments that addresses all essential dimensions of project success and with which it is possible to make the relevant information of agile projects understandable for "classic" overall program control. Consequently, it is not a methodical "silver bullet" such as LeSS or SAFe that makes large digitalization programs manageable, but a sensibly applied canon of familiar instruments and techniques - "back to the roots" in a new environment.