IT Project failure is estimated to directly and indirectly cost the Australian economy over $120 Billion per year (8.9% of GDP) according to Michael Krigsman, CEO of consulting and research firm Asuret. (Reference article)
Given that SME’s contribute a third of Australia’s GDP and most business projects are IT enabled, we can confidently say SME Business Project failure costs Australia over $40 Billion per year or an average of $33,000 for each of the $1.2 million Australian SME’s.
This is a huge unnecessary waste which can be largely avoided through understanding why SME Business Projects fail.
My top 10 reasons for SME Business Project Failure:
Project not considered a project and therefore not managed as such (no project manager)
Too many projects “on the go” at once (diluted resources, no prioritization, confused staff)
Business owner failure to effectively sponsor/lead/initiate the project (Development and approval of a business case)
Inadequate resources (time and money) assigned to the project (often the limiting factor is the business owner’s time to provide input and make decisions)
No-one held accountable for delivering the desired project outcomes/benefits
Vendor manages the project and therefore priority is project completion to specification rather than business benefit delivery
No pre-agreed definition of project success (unclear and changing scope)
Misaligned quality expectations (vendor and client have different ideas of when near enough is good enough)
Lack of internal staff involvement, education, training and expertise (Putting a learner driver behind the wheel of a Formula 1 race car is always going to be a very expensive mistake, yet SMEs make similar mistakes every day when investing in sophisticated business systems such as ERP)
Failure to keep all stakeholders engaged, aligned and informed (business owners, advisers, staff, customers, suppliers, vendors)
I have developed a guide for initiating and managing SME Business Projects that you can download here. The critical document is the Project Brief Agreement a template for which can be downloaded here. These were the handouts at the Toowoomba Chamber of Commerce Professional development seminar I delivered on 30th January 2013.
Finally, ERP (Enterprise Resource Planning) Projects are one of the most challenging business projects SME’s are likely to undertake. To learn about how we assist with ERP Project Management click here.
These are my top 10 key marketing concepts which business owners must know if they wish to build a successful business.
Marketing is not just “promotional & advertising activities”. Marketing encompasses ALL the activities of the business needed to effectively & profitably satisfy the needs & wants of their target customers.
Marketing consists of four elements often referred to as the 4 P’s (Product/Service, Price, Promotion, Place/Distribution)
For a particular product or service to sell well, all four elements must come together to form a “Marketing Mix” to provide an attractive, credible and ‘believable’ offer in the eyes of the customers who are being targeted. If even one element of the “Marketing Mix” appears ‘out of sync’ with one or more of the other elements then the potential customer becomes ‘uncomfortable’ and consequently he or she will be unlikely to buy.
Strategic decisions are different from tactical decisions. The difference is that strategic decisions are important, will have long term effects on the business, will likely have ramifications across the whole of the business and are difficult to reverse. Tactical decisions are less important, have short term effects, may be restricted to specific parts of the business and can be relatively easily reversed.
As a business owner, you need to know when you are making a strategic marketing decision so you can give it the due attention and consideration it warrants.
Your marketing strategy describes the ways in which you will gain a meaningful, sustained advantage over your competitors in the eyes of your target customers
Having a marketing strategy is important because it allows all your strategic decisions to be aligned towards achieving an overall purpose rather than potentially being in conflict with each other.
A Marketing Strategy Statement is a succinct way of describing your business model and the marketing strategies that will support it. Essential parts of such a statement include:
Your marketing strategy is only as good as the information on which it is based. Internal & external analyses must precede the development of your marketing strategy.
If your marketing strategy is flawed then no amount of effort, investment or advertising is going to give you a successful business. Make sure your horse has the potential to be a winner before you back it with your life savings.
A 51 year old highly motivated female claimant is suffering from a degenerative physical condition in her hands such that she is unable to return to work in her specialised medical field. The claimant owns a successful, referral-based practice and has been off work for 10 months. Prior to the condition worsening, the claimant worked full time in the business, along with another part time specialist and a number of support staff. The business has continued to trade in her absence, however at almost zero profit. Due to the specialised nature of the work and a limited number of new graduates going into this field each year, the likelihood of employing further staff to fill her current role within the business is slim. The claimant receives a benefit of $7,440 per month to age 65.
The insurer advises that the claimant:
• Has recently, and reluctantly, come to accept that she will be unable to return to clinical work.
• Is considering selling her practice. She has listed it for sale but has had no significant enquiries. It is a very limited market and likely to take time to sell.
• Is contemplating a new business idea in a related but more heavily administrative field.
• Has several ideas/potential opportunities for future employment but her new business idea is the favoured option.
"This has been the worst year of my life so far. I am so thankful to have someone objective to discuss my situation with"
Claimant - Medical Specialist
Our engagement is to:
• Explore the claimant's new business idea further.
• Identify any barriers to business start up.
• Identify any risks to business start up.
We focus the claimant's attention to the following key areas:
• The options available to her with her current business - and the importance of thoroughly considering the benefits and the risks of each option.
• Ensuring her own best interests are served in deciding on a course of action for her existing business.
• Articulating her personal and professional goals and vision.
• The fit of future career and existing business options to these goals and vision.
• The importance of seeking enjoyable, fulfilling work.
• Prioritising decisions based on urgency and importance.
• A clear and focussed plan of action for the existing business will ensure more robust decision-making on future career/employment prospects
• Reflection on obstacles and set backs overcome in the past year.
The Insurer is in an improved position to move this case forward:
• Information demonstrating the claimant is not committed to the new business idea has come to light, which is contrary to the insurer's understanding on referral to BBO.
• The insurer now has a better understanding of employment/career and existing business options available to the claimant.
• Detailed information regarding the claimant's career and lifestyle goals is available.
• An understanding of the immediacy for the claimant to make an informed decision on the existing business (and the implications if this does not occur) has been determined.
• Improved understanding of the competing demands on the claimant's psyche, and the pressure this is placing on her mental well being.
• The insurer's relationship with the claimant will benefit for having provided an objective and professional outlet for exploration and discussion of options.
This position was achieved in one single session. Given this is a high benefit claimant very motivated and committed to regaining financial independence, it is expected the information now available to the insurer, coupled with the change in perspective achieved with the claimant will provide significant impetus for progression of this case.