| Mike Dunville* had a decision to make. As the | | | | should be no wonder then that dissatisfaction |
| new operations manager for Alpha Staffing, he | | | | with IT contractors has reached an all-time |
| wanted to make a difference at the dynamic | | | | high. A poll of 200 MIS managers conducted by |
| staffing firm. The principals of the firm had | | | | Information Week revealed that 63 percent of |
| charged him with making the day-to-day | | | | them had either eliminated or rebid an IT |
| operations run smoothly and efficiently while | | | | service contract within a year. This was |
| they concentrated on growing the business in | | | | typically due to unacceptable performance or |
| today's challenging economy.With his | | | | failure to deliver as promised.Why the low |
| background in operations and finance in the | | | | success rate of home-grown "Do-It-Yourself" |
| insurance industry, Mike had confidently and | | | | software projects?With a success rate of only |
| successfully translated some of those service | | | | roughly 40 percent, you might be tempted to |
| practices into Alpha's daily staffing and | | | | accept the premise that the very complexity |
| recruiting operations. Now it was time to | | | | of custom software would have a bearing on |
| take the next step, and modernize the | | | | the success or failure of project. To a |
| hodge-podge of computer systems that until | | | | degree, this is true, however, the three main |
| now had been reasonably adequate for their | | | | causes of software development failure, as |
| three-office operation.But where to start? He | | | | determined by industry surveys, are not |
| needed a real staffing software package. Mike | | | | related to the technology itself, but to |
| knew that the custom system his former | | | | experience, management, and politics. They |
| employer, an insurance giant, had implemented | | | | are:1. Inexperience: Technologies and |
| the year before had done wonders to improve | | | | programming methods change rapidly. This |
| efficiency and overall profitability. It had | | | | means that both business-side and/or contract |
| also taken three years to develop, and | | | | programmers and program managers are not |
| another to implement. In fact, when he had | | | | always up to speed on the latest development |
| left, they were still making "customizations" | | | | technology. What is more important, |
| -- a process he figured would go on | | | | IT-oriented program managers and programmers |
| forever.Mike didn't think that Alpha could | | | | are rarely totally familiar with the business |
| invest that kind of time or money. Could he | | | | issues to be addressed, and so may not be |
| could bring in some business software | | | | able to make the connection to the best |
| consultants and work with them to develop a | | | | technology needed to address them.Consulting |
| tailored package in a shorter period of time? | | | | companies, including the largest and most |
| Mike knew that the continued success of Alpha | | | | well-known of the accounting/IT consulting |
| Staffing, and its entrance into new markets | | | | firms, often use novice talent, fresh out of |
| and business lines would be greatly dependent | | | | school, to handle programming and management |
| on a successful staffing software system | | | | chores. This inexperience leaves clients open |
| implementation.This reinforced Mike's doubts | | | | to potentially massive cost-overruns or, |
| that one of the "off-the-shelf" staffing | | | | worse, a system that never works even after |
| software packages would fit their needs, even | | | | years of development.You probably won't hear |
| if it were quicker and easier to implement. | | | | much about these consulting firm failures |
| The more he thought about it, the more Mike | | | | though; both the firms and their clients have |
| felt that his decision on business automation | | | | a vested interest to keep such admissions of |
| would be his biggest, and if wrong, his last. | | | | failure quiet. Only when it reaches the |
| He reached for a bottle of antacid.Mike's | | | | "public scandal" or "write-off" stage does |
| business is unique, like yours. Special. | | | | such information become public knowledge.2. |
| Unlike any other competitor in the whole wide | | | | Management mis-objectives: Any firm trying to |
| world of staffing. Your business practices | | | | develop a staffing software project for |
| are equally different. As a result, your | | | | itself must first fully and clearly define |
| staffing business requires specialized | | | | the objectives for the project. Few do this |
| information technology that addresses those | | | | to the extent needed.Software development and |
| unique needs. You are convinced that with the | | | | implementation is an incredibly complex |
| right IT infrastructure -- the right staffing | | | | process, even for a moderately sized firm. |
| software -- you will be more efficient, | | | | Senior management must be involved from the |
| productive, and profitable. If you subscribe | | | | get-go. End-user considerations are paramount |
| to this common belief, you, like Mike, have | | | | if the technology is to be fully accepted. |
| three options to achieve that end:1. Develop | | | | Questions regarding business practices, |
| your own custom staffing software and | | | | methods, and future business or technology |
| technology infrastructure;2. Hire a | | | | possibilities must be answered.Critical to |
| consulting firm to develop the staffing | | | | the success of the project is both |
| software and IT for you;3. Buy from a | | | | established accountability and an |
| staffing software/IT vendor familiar with | | | | understanding that software development is |
| your industry.Of these three options, which | | | | inherently risky due to rapidly advancing |
| do you think is most likely to work the best, | | | | programming technology. It's useful to |
| cost the least, and get implemented the | | | | remember that the billions of dollars |
| fastest?If you, like the high-profile public | | | | allocated to correcting Year 2000 computer |
| staffing firms of Norrell (now Spherion) and | | | | problems were the result of management and |
| Manpower choose to develop your own software | | | | programming decisions made, in some cases, in |
| solution, you too may have a very expensive | | | | the 1960's.At a time when CEO's often focus |
| future write-off to enjoy. In fact, | | | | on the performance of the next quarter, |
| Manpower's write-off for its failed | | | | trying to plan and manage something that may |
| three-year software development effort in the | | | | take years and millions of dollars is |
| late 1990's was pegged at $57 Million.The | | | | difficult at best. Even with long-range |
| right answer to this perplexing question is | | | | planning and management, mis-steps are fairly |
| to buy from a staffing software vendor who is | | | | typical. And it takes unusually strong and |
| intimately familiar with the | | | | pragmatic business leadership to admit that |
| industry.Surprised? After all, you're | | | | they've taken the wrong development road and |
| special, unique, different, right? Well, not | | | | make any needed course changes.3. CYA CIO's: |
| exactly. Yes, it is very true that you and | | | | The CEO who does not want to get involved in |
| your competitors differ in a number of | | | | software or IT projects is often tempted to |
| important areas, such as management styles | | | | place all of his eggs in the basket of a |
| and objectives. However, you and all of your | | | | trusted CIO or similar IT manager. Doing so |
| competitors also share a wealth of common | | | | may set the firm up for a humpty-dumpty |
| traits, such as tracking employees and | | | | fall.Years ago, the MIS department was often |
| candidates, performing the business | | | | referred to as the "glass house", where |
| transactions of orders and assignments, | | | | massive mainframes resided, presided over a |
| making payroll, and billing customers.These | | | | technical priesthood whose mystic |
| shared business issues are at the core of | | | | incantations were the interface between the |
| your staffing and recruiting business, and it | | | | "big iron" and the information needed to run |
| is these issues that a staffing software | | | | the business. Today, business-savvy CIO's and |
| vendor familiar with your industry is best | | | | networked computer systems are the |
| qualified to address. After all, such a | | | | rule.However, the firm's CIO and the MIS |
| vendor has researched the issues to develop | | | | department may still have a vested interest |
| the necessary technology. These | | | | in the technology and methodology with which |
| industry-specific software vendors can often | | | | they are already familiar. They may want to |
| implement a solution that can handle 80 | | | | protect their turf at all costs. As a result, |
| percent to 90 percent or more of your | | | | their tendency is to do things "the way we've |
| business operational needs. (It should be | | | | always done them", only bigger and more |
| noted however, that vendor solutions may vary | | | | expensively.At the other extreme are |
| greatly in quality, efficiency, and | | | | sometimes visionary CIO's who see a new IT |
| cost-effectiveness, depending on their | | | | project as an opportunity to bring in the |
| expertise and previous success in the | | | | latest and greatest technology, without fully |
| marketplace).But let's say that the "90 | | | | understanding it or its applicability to the |
| percent solution" that an industry-familiar | | | | business. Here, they may apply an attitude |
| vendor has to offer just isn't enough for | | | | that if the business sotware is "not invented |
| you. You want it all. Or you want some | | | | here", it won't work right.Either way, the |
| features or functions that the vendors don't | | | | firm loses, (although the CIO and MIS |
| have.Your options then are to either do the | | | | department staff may gain some new |
| job yourself or hiring the project out to | | | | programming skills they can use on their next |
| outside consultants. Both are similar in that | | | | job).Can you ensure the success of any |
| you, the client, assume the overall project | | | | "Do-It-Yourself" home-grown software |
| management risks, and, in the case of doing | | | | project?With so many variables -- technology, |
| the job yourself, the programming chores for | | | | management, business practices, internal |
| your unique staffing software. If you decide | | | | politics, competitive issues, and more, it is |
| to take either of these routes, do so with | | | | virtually impossible to predict the success |
| extreme care -- as industry surveys indicate | | | | of any custom software development project. |
| that there is nearly a 60 percent probability | | | | At best, you've only got a 40 percent chance |
| of its failure.According to one survey of | | | | of success. You can, however, improve your |
| thousands of software projects, conducted by | | | | chances somewhat by following a few simple |
| the Standish Group of Hanover, Massachusetts, | | | | guidelines:1. Establish goals. The most |
| four of 10 software projects failed outright. | | | | important thing is to define, exactly, what |
| To make matters worse, an additional 33 | | | | you want to accomplish. What is your firm's |
| percent of software projects were completed | | | | business plan? How does IT relate and |
| late, went over budget or were completed with | | | | contribute to it? What should its objectives |
| fewer features and functions than originally | | | | be? Be realistic in setting the goals, then |
| specified. Can your staffing business afford | | | | document them. Get buy-in on these goals from |
| to make that kind of risky investment?In an | | | | senior management all the way to end-user.2. |
| even more unexpected finding, the study also | | | | Establish budget and time specifications. No |
| revealed that the use of IT consulting houses | | | | matter how you cut it, software development |
| -- even highly respected companies such as | | | | is all about time and money. Working from |
| Andersen Consulting (now Accenture) and | | | | your goals, consider the cost to develop the |
| Lockheed Martin -- increased the risk of a | | | | software, AND those areas where budget and |
| project's failure. This is astonishing | | | | time requirements can increase exponentially. |
| because such consulting firms have staked | | | | This includes testing, documentation, |
| their reputations on and are hired for their | | | | implementation, and end user training. And |
| claimed expertise at developing or | | | | don't forget ongoing support, development, |
| implementing enterprise software from such | | | | and "bug" fixing.3. Establish project |
| giants as SAP and PeopleSoft.But the reason | | | | milestones. Hand-in-hand with establishing |
| for their poor results is not so surprising | | | | your budget and time-frame -- determine what |
| -- as it pointed to business practices that | | | | goals you have to achieve in the development |
| leave a lot to be desired, frequently at the | | | | process to complete the project on-time and |
| considerable expense of their clients.It | | | | on-budget. |