At a time where economic uncertainty in Europe is at record highs, it is crucial for organisations to maximise value from their technology projects. Findings by PwC that 71% of UK CEOs believe that global economic growth will decline this year only highlights the importance of a robust strategy for measuring value.
However, it is challenging to determine the value returned as not all of these measurements are necessarily financial. Furthermore, it can be difficult to determine which KPIs will truly reflect overall success.
This explores 5 steps to measuring value in your technology projects, from getting buy-in from employees and defining success to managing risk and monitoring KPIs. By following these steps, you will be able to fully assess the impact of technology projects and make informed decisions about investment.
1. Get buy-in from employees
Research has shown that people are more likely to embrace change when they are actively involved in shaping it. Involving employees in a project creates a sense of ownership, leading to higher engagement and a greater likelihood of success.
Leaders play a crucial role in driving a high performance culture where employees feel supported. To get buy-in, leaders must actively engage with employees, communicate the goals and benefits of the project, and provide ongoing support throughout.
The Royal Bank of Scotland (RBS) improved employee engagement and achieved environmental sustainability goals by launching a reward scheme that encouraged employees to participate in energy-saving, water-saving, and paper waste reduction challenges, and rewarded them with incentives such as KeepCup reusable coffee cups and wall socket timers for standby appliances.
The program, called Jump, was run as a pilot with 1,200 employees and extended to all 60,000 RBS employees in the UK and Ireland via a smartphone app. Among pilot participants, 95% of employees said the scheme contributed to employee engagement, team building, and environmental sustainability, demonstrating the value of technology-based initiatives to improve employee engagement.
2. Define success for your organisation
It’s important to have a clear definition of success that takes into account all possible outcomes. This will help to ensure that the project is delivering the expected results and that results are aligned with the organisation’s larger goals.
Research from Harvey Nash has found that 53% of business leaders believe a lack of focus is the largest obstacle to innovation. If you do not have a clear idea of what success looks like, how will you know when you’ve achieved it?
When defining success, consider the following:
- Objectives: Identify specific, measurable, attainable, relevant, and time-bound (SMART) goals that will define success for the project.
- Stakeholder input: Consider the needs of stakeholders, including employees, customers, and partners. Their input will help ensure that success is defined in a way that is meaningful and relevant to everyone involved.
- Alignment with organisational strategy: Make sure that the definition of success is aligned with the organisation's overall strategy and objectives.
3. Manage risk
It is important to consider not only the potential benefits of your technology projects, but also the risks. You can then make more informed decisions about how to mitigate risks and maximise the chances of success.
Here are 4 steps to help manage risk when measuring technology projects:
- Document and track potential risks: This may include factors such as project scope creep, stakeholder changes, technology failures, or resource constraints.
- Assess the impact of each risk: This can be done by assigning a probability of occurrence and a severity rating for each risk.
- Develop mitigation strategies: This may include implementing a risk response plan, allocating additional resources, or adjusting project scope.
- Continuously monitor and adjust risk management strategies: It’s important to continuously monitor and adjust risk management strategies as the project progresses. This will help ensure that any new risks are quickly identified and addressed.
4. Define KPIs
Establishing KPIs before projects begin means that you can continually monitor underperforming areas and promptly address any issues. When defining KPIs for measuring value in your organisation, consider both financial and non-financial metrics as both provide valuable insights into your organisation's performance.
Value is traditionally associated with hard metrics, which are quantifiable data points. Examples of hard metrics include:
- Revenue growth
- Cost savings
- Return on investment (ROI)
- Gross margin
Soft metrics, on the other hand, are subjectively based on interactions. Examples of soft metrics include:
- Employee engagement
- Customer satisfaction
- User experience
- Brand reputation
Metrics need to be managed continuously throughout the project, the key value in metrics is not just their absolute value, but how they adjust over the duration of the project.
Measure and monitor KPIs
Goals and objectives will change as your organisation evolves and faces new challenges. Regularly monitoring and evaluating KPIs ensures that they remain relevant and are aligned with project initiatives.
Here are some steps you can follow to effectively evaluate your KPIs:
- Set a schedule for reviewing KPIs: Decide how often you want to review your KPIs and set a schedule for doing so.
- Review the data: Gather data on each KPI, including current performance and trends over time. This information should be compared to your organisation's targets and objectives to determine whether the KPIs are effectively measuring progress.
- Communicate results: Share the results of your KPI monitoring and evaluation with stakeholders, including employees, managers, and executives. This will ensure that everyone is aware of the organisation's performance and any areas that require attention.
5. Be agile
By embracing Agile principles, organisations can ensure that they are effectively measuring the value of projects, and that they are continuously driving value for their stakeholders. According to the annual state of agile report, 89% believe Agile teams have people-centric values, a clear culture, effective tools, and leadership empowerment.
Here's 5 ways that Agile helps you effectively measure the value of your technology projects:
- Continuous improvement: Agile methodologies prioritise continuous improvement, which means that you can regularly review and adjust your KPIs to ensure they remain aligned with your organisation's goals.
- Flexibility: Agile encourages flexibility, allowing organisations to adjust their plans as they go based on new information and changing circumstances. This allows organisations to respond quickly to changes in the market, customer needs, or other factors that impact the success of a project.
- Collaboration: The emphasis on close collaboration between all stakeholders encourages open communication and transparency, helping to break down silos and foster a sense of shared ownership and accountability for the success of the project.
- Iterative: Agile methodologies are based on an iterative approach, where small increments of work are delivered and evaluated regularly. This allows organisations to test and refine their approaches, prioritise the most important initiatives, and ensure that they are continuously delivering value.
- Rapid feedback: Agile places an emphasis on rapid feedback, which means you can get quick insights into the performance of your project and adjust your approach in real-time.
At Audacia, we understand the importance of delivering real business value. As a leading digital transformation and software development company, we have extensive experience in delivering large-scale, complex technology projects for industry-leading organisations.
Want to find out more ways to measure the success of your technology projects? Talk to us on 0113 543 1300 or at email@example.com.