• Technology
  • CFO Magazine

Monumental Challenge

Deploying new tech systems can be wrenching, but smarter project management will help you leave the past behind.

It’s often said that information technology is a field that lives and (too often) dies by the project. Even when a project isn’t dying, it may be weak, sickly, or on life support. Large IT initiatives are difficult to manage and can prove disappointing, if not disastrous. Some progress has been made in recent years as project management has become a bona fide corporate discipline, but the latest statistics on success rates still leave plenty of room for improvement. (The Standish Group says that more than half of all IT projects still run late, exceed budget, or fail to deliver promised benefits.)

Nearly all projects fall into three phases: preproject work to justify the initial need (read: business case), postproject measurement of the project’s overall effectiveness (read: ROI), and, in between, the most difficult phase of all: implementation (read: headaches).

During implementation, the best-laid plans often go awry, as changing needs, scope creep, untold delays, and an inevitable dose of Murphy’s Law conspire to derail the effort at every turn. Yet companies do succeed in bootstrapping themselves into the future, leaving behind outmoded systems and ways of doing business. By following some best practices, project management can become more predictable and less painful, and perhaps even culminate in an outright celebration.

Such was the case for the finance department at Louisville-based Brown-Forman Corp., the $2.7 billion purveyor of Jack Daniels whisky, Finlandia vodka, and other spirits and wines. The company was burdened by a “Neanderthal” cash-management system that required treasury staff to re-key bank information for the company’s numerous subsidiaries into spreadsheets for daily cash positions, and to post accounts-receivable receipts from paper bank statements, among other manually intensive practices. “We had what was essentially a spreadsheet-era treasury system,” says executive vice president and CFO Phoebe A. Wood.

“It’s not that the old system was broken, or that we were losing cash, not paying vendors, or not effectively concentrating cash and putting it to work and paying down our debt,” notes Wood. “All of that happened. It’s just that the processes were very inefficient and labor-intensive, leaving our cash analysts little time to do actual analysis. This severely limited our ability to manage our cash globally. We had cash dispersed to our subsidiaries sitting in various countries and bank accounts that was neither efficiently deployed nor controlled.”

Improving that, Wood says, became a priority — and a major challenge. After executing a comprehensive feasibility study defining the project’s scope and objectives, project managers got the green light to draft a project blueprint. That document encompassed the budget, task list, milestones, and associated change-management issues expected to crop up. The company designated a project leader (assistant treasurer Roger Shannon), created multiple working groups charged with exercising specific types of leadership, partnered with IT and the system’s ultimate users, and established measurable ROI goals.

Who Does What?

All of those steps have been codified in an IT-governance framework that the company has developed over the past four years. Several “process councils” identify process improvements that can be achieved via IT projects, then present them to a steering committee. Projects are prioritized and assessed as to the resources required, then turned over to other teams for actual implementation.

Discuss

Your email address will not be published. Required fields are marked *