The NHS’s implementation of Clinical Commissioning Groups in April this year is designed to streamline healthcare commissioning by placing clinicians at the heart of the commissioning process. The intent is to harness their knowledge of treatment pathways and drive down patient costs by realising improved levels of efficiency. Annual savings of £5 billion or more are needed – the so-called ‘Nicholson Challenge’ – so the project to introduce CCGs is seen as one way to combat rising patient demand when budgets are being allocated on a ‘flat cash’ basis.

The obvious saving of course, is to cut staffing levels, since pay accounts for almost 70 per cent of NHS trusts’ costs. However, given the findings of the Cavendish, Francis and Keogh reports, a much better approach would be to deploy staffing costs more effectively. One way to do this is to highlight those areas where there is duplication, irrelevancy or inefficiency at primary and secondary care level, and by optimising the flow of patients between them.

Although the benefits of working together are recognised, the restructuring has also led to inefficiency as healthcare professionals are not necessarily always experienced in management and forecasting. The ‘buy, build or share model’ available to them is complex, and they have no end-to-end view of the necessary relevant data to inform their decisions.

By reviewing data for individual incidents it is possible to provide separate costs for those incidents, however, a wider view of all the factors contributing to the costs is required in order to identify specific processes that need addressing. At a macro level, it is relatively simple to identify cost drivers – the difficulty lies in breaking them down to a level that allows organisations to understand them in order to implement change.

Handovers between services are particularly vital to understand, for example, a patient arrives at a primary care facility; a clinician examines them and, if required, sends them to a secondary care facility where they are re-examined and provided specific treatment if needed. The patient is then discharged, but if they have to make a repeat visit, the whole process may be replicated – with all the associated costs. Looking at this scenario the patient in question should be treated differently applying a different cost approach.

Lessons can be learnt from logistics and manufacturing supply-chains, where there is a need to assess the cost to produce, aligned wastage, the cost to expedite and the desire to achieve a just-in-time delivery. Much of this thinking could be transferred to the health sector, with pathways seen as an integrated process and individual patient data used to make more informed management decisions.

This requires a cultural shift as today, many trusts consider data collection a burden imposed on them by external parties, and therefore use data to tick boxes, to meet the imposed metrics rather than improve services. Yet information on the costs of treating individual patients can provide a more in-depth appreciation of what it costs to provide care and aid the decision-making process.

Adopting a more joined-up approach to healthcare data across organisations will provide greater insight to clinicians, resulting in an improvement in care quality, and optimising capacity. Although there is no common model for making patient pathways more efficient, ensuring that healthcare professionals have the necessary data to assess efficiency would certainly be a good start. Equipped with a more joined-up view of data, NHS organisations will be able to cast off the mistakes of the past decade, and target areas where real value can be added.

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LOC Consulting’s Peter Osborne argues that a tactical approach to a recovery is critical as it maintains momentum while avoiding unbundling and potentially killing the project being recovered.

Project failures, delays and delivery of the wrong outcomes continue to hit the headlines on a regular basis. In addition to the considerable waste of time and money, the long-term impact of a failing project puts an organisation’s brand, reputation and even its future viability at risk.

The reasons for failure are manifold but typically amount to early warning signs being missed or not acted upon, or corrective actions failing to properly understand the root causes that put a project at risk. What’s more, corrective actions can exacerbate problems because they incur extra cost, time and risk at precisely the point it can be least afforded. An ongoing alignment of the outcomes to the business-case is fundamental.

Performing a review (or ‘project healthcheck’) in a structured manner and taking the right corrective actions at the right time can help ensure all the elements of a project are kept on track. Yet in the same way that most people only go to the doctor when they feel ill, the majority of organisations only perform a review if they believe that something is fundamentally wrong.

Ultimately, stakeholders are spurred into action when it becomes clear a project is out of control, with key dates agreed in the delivery schedule being missed on a regular basis and costs starting to spiral. But the tendency for stakeholders to halt a failing project mid-flow for review and restructure or to take drastic corrective-actions is exactly the wrong approach. All momentum and focus is lost because stakeholders find there’s been little progress and the delivery team quickly become disillusioned.

Once a team becomes de-motivated, it is very hard to win that back. This is why it is critical to ensure a failing project is not unbundled to the extent that it fails catastrophically. While it might seem counter intuitive, it is often possible to retain certain problem areas not seen as recovery-priorities and address them at a later stage, which means that short-term objectives are achieved, project momentum is sustained and successful outcomes are delivered long term.

Re-baselining for change

The primary driver for a project recovery is when the benefits that are going to accrue from a delivery no longer align to those agreed in the original business case. This scenario can arise from any number of factors, such as failing to generate the anticipated financial or operational improvements, failing to deliver with a specific organisational structure, changes to the organisational priorities, structure or failing to deliver within the budget or timelines agreed.

Yet the oft-quoted Gartner and Standish Group statistic that between 60-80 per cent of IT-led programmes continue to fail is slightly misleading. Although it’s true that a large number do fail catastrophically, many others labelled as such actually still deliver a range of potentially positive outcomes – from a sub-set of the original benefits, to benefits not defined in the original business case. Here, it is change that presents the greatest challenge to whether a project is deemed as a success or a failure.

Given that all organisations experience change at some point during the course of a project, it is very rare that the outcomes delivered will ever match exactly those specified and agreed at the outset. Change comes about either as a result of macro factors such as a material change in the business or market in which an organisation operates, or micro factors within the organisation itself. The latter could be a change in stakeholder or sponsorship, or an organisational restructuring due to merger & acquisition or share issue for example. Regardless of origin, the potential impact of change must be factored in and the business case relevant.

Recovery is therefore about restructuring a project to deliver the benefits that the organisation originally may have wanted. It  means drawing a line in the sand and being specific on what the objectives are, whether or not these can be delivered with the resources already in place, or re-stating the benefits so that when it is delivered, expectations are met. Effectively, this entails re-baselining the project, whereby all key participants agree on a revised description of the objectives and performance requirements, aligned benefits and commit to execute it accordingly.

Striking a balance

One of the first actions of a recovery is to implement a scope-freeze, assess the top-down prioritised list of deliverables, obtain consensus on which of these are the most critical and agree the high-level delivery schedule. In parallel, it is vital to define the critical resources needed to achieve the revised delivery-schedule and ensure these resources are retained. Using this approach, ‘scope creep’ is eliminated and project teams are able to focus on fixing critical issues first and delivering key components on time. Not only does this result in immediate improvements (i.e. quick-wins), it also builds stakeholder confidence in the project team and ensures that momentum is maintained.

Re-baselining for recovery is also important in respect of budget allocation. Because an organisation will have already invested time and money in the project prior to embarking on a recovery, it must decide whether it wants to spend more in order to achieve a specific set of outcomes, or forego certain ‘nice-to-have’ elements so that it can hit a necessary go-live date. Effectively, you are optimising across the time, cost and functionality components.

When time is of the essence, foregoing the ‘nice-to-haves’ is the most effective route to achieving a turnaround. Alternatively, if a specific set of outcomes is non-negotiable, stakeholders must be willing to accept that there will be an additional cost associated with the recovery, while all project members should be aware of what the true cost of the delivery is.

Honest communication and active engagement with stakeholders and the project team is therefore fundamental to striking the right balance between time, cost and expected business benefits while moving towards a successful recovery. Likewise, if a new team is brought in as part of the restructuring, good internal communication is vital to ensure buy-in from existing members. The best approach is to call people together and tell them what you are doing and provide them with the means to raise concerns.

Stepping boldly from recovery to delivery

If a seamless transition to recovery is to be achieved, it is important to quickly remove ‘non-believers’. Experience shows that there’s little to be gained in wasting valuable time trying to convince people who are determined to remain unconvinced. Indeed, it is possible to identify these people quite quickly when performing a project healthcheck (review) and then act ruthlessly. But the main thing is to take bold decisions, which is possible if sponsors and stakeholders have bought fully into the recovery and the revised expectations.

The number of people that are removed under the initial phase of a recovery will vary but the critical factor is to maintain stability while acting swiftly and decisively. As such, only those causing the most pain should be removed immediately. Here, people management comes to the fore, as in most cases, project members will have the right skill sets but not necessarily the right mindset or team ethic for a recovery.

If approached in an open and honest way, then amicable outcomes can be achieved for all parties during the restructuring of a project. Naturally, this process is challenging, but any initial doubts will soon be dispelled as a project team’s motivation always goes up when the right people have been removed. Again, this falls under the re-baselining of the project, together with the planning, redefining the deliverables, setting the roadmap and restating the business benefits.

Continuity and delivery culture

A final consideration is the priority of a recovery against the wider strategic priorities of the organisation, as this dictates how easy or difficult it will be to obtain specialist resources who may be assigned to other ongoing projects. A similar consideration applies with regards to how the sponsor of the recovery is perceived within the organisation. Both of these factors dictate the dependencies of a recovery from the outset and must be known in order to be able to plan for the best outcome for the least cost and a seamless transition from recovery to delivery.

Certainly, continuity and a delivery culture are essential. There will always be elements of a project that need to be removed, but to do so immediately risks unbundling the project to the extent that it is killed. Removing problem areas in a tactical way allows ‘fixing on the fly’, which is where the true value-add to a recovery comes into play and why recovery has become a combination of science and art.

The science is in the methodology and includes the process of reviewing the delivery and restructuring the governance, the leadership and the team. The art is in being able to identify which parts of the constituent elements of a project to keep, what not to keep and what to take out and when.

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Peter Osborne, managing director at LOC Consulting examines the early warning signs a health check can reveal and how organisations should respond to the identified issues to achieve a successful outcome.

Performing a review or ‘health check’ of a project on a regular basis is a relatively simple and inexpensive exercise when compared to the multi-million pounds that are at stake. A health check provides stakeholders; sponsors; those tasked with managing the delivery; and impacted employees with peace of mind that the business benefits will be realised within the given time and resource constraints. Yet in the same way that most people only go to the doctor when they feel ill, the majority of organisations only perform a health check if they believe that something is fundamentally wrong.

Even if the warning signs are visible, there is a tendency to carry on with a project in the belief that issues can be resolved by doubling efforts or by throwing more resources at them. However, unless corrective actions that target the fundamental aspects of a delivery are implemented early, in most cases, outcomes will not be realised or a catastrophic failure will occur. Fear of failure is often an overriding issue, coupled with the reticence of involved staff to flag problems when it reflects badly on themselves or their colleagues. “It is hard to change your eating habits when you only have, in your mind, a few pounds to lose!”

Such political motivations mean that many staff put a positive spin on negative situations, while delivery teams focused on the programme outcomes can miss mitigating factors such as organisational change or external market developments. A project is all but doomed if it does not have the full backing and commitment of a viable sponsor and key stakeholders. There are countless examples of where the means outweighed the needs – the plight of one major mobile phone manufacturer in particular is testament to what can happen if a market takes a major leap forward but product development cycles follow their original course regardless.

Sponsorship and business logic

Projects can fail in any number of ways – not just in terms of being unable to deliver on what was originally configured once the investment has been made (i.e. a catastrophic failure), but in terms of failing to achieve continually throughout the project lifecycle. A Dynamic Markets survey of 800 IT managers reported by CIO.com revealed that 62 per cent of IT projects fail to meet their schedules, with 49 per cent suffering budget overruns, 47 per cent having higher-than-expected maintenance costs and 41 per cent failing to deliver the expected business value and ROI. This wouldn’t be so bad, CIO.com notes, if it weren’t for the fact that the numbers haven’t appreciably improved over the past decade. In some cases, they’ve gotten worse.

Statistics from industry analysts Gartner and The Standish Group support these findings, with anywhere between 60-80 per cent of IT-led projects continuing to fail. According to The Standish Group, 2009 marked a low point in particular, with just 32 per cent of all projects succeeding. Meanwhile, 44 per cent were ‘challenged’ in terms of being late, over budget and/or with less than the required features and functions; and 24 per cent ‘failed’ in terms of being cancelled prior to completion, or delivered and never used.

There are two major factors that influence the outcome of a project. Firstly, it is essential to have the right sponsorship. Whether conceived to improve business processes, reduce enterprise costs or manage enterprise change initiatives, projects can be initiated by any function within an organisation but without electing the right sponsor, the initiative is doomed. For example, if a new financial system is to be implemented but the CFO is not the primary sponsor or part of the programme board, the chances are that it will fail irrespective of whether or not the system is delivered successfully. For success the CFO must be part of the solution that impacts his finance team.

Secondly, it is just as important to ensure that a project is grounded in business logic. All too often, organisations are unrealistic in their expectations, with the belief that technology provides a ‘reach all cure’. Yet there are many other factors at play – such as organisation, management, process, people and environment. A major UK business embarked on a £50-million project to implement a new CRM platform to help combat falling sales, only to find that the real reason was the inability of its sales people to actually sell!  Technology is an enabler not a cure for organisational, process or management incompetence.

Health check fundamentals

A project health check examines a wide range of aspects. This includes objectives, scope, approach, plans and management, as well as quality of resource, programme governance and sponsor/stakeholder commitment. Essentially, it enables programme leaders to identify what is working well and why, what is not working well and why and the actions necessary to resolve issues. Ultimately, there are an infinite number of aspects but there are five primary fundamentals core to an effective assessment – leadership, clarity of approach, effective governance, delivery approach and smart processes. The exact nature of a project health check will depend on the type of project being undertaken, the industry or sector the organisation operates in and at what stage of the project it is conducted.

The questions asked and the actions required also change as the delivery progresses. At the design phase for example, there is plenty of scope to adjust a configuration without  materially impacting on the outcome but, once a build or delivery has commenced, alterations become increasingly prescriptive until a ‘point of no return’ is reached. Similarly, the further along the delivery lifecycle, the more pressing it becomes that the resources deployed are relevant for the specific phase and are effectively swapped in and out as necessary. Individuals involved with design are very often different to those who develop and those that build, and without ongoing organisational change these individuals can quickly become a hindrance when operating outside of their area of expertise. Whilst it is hard to put a rigorous measure on this, as a guideline, at least 60 per cent of the resource should be able to perform the roles as configured within the original role descriptions.

If members of the delivery team are unable to clearly articulate their contribution to the project success or are unsure of their role, this is a sure sign that things are wrong. It is also important to ensure that lines of reporting are simple, logical and clearly defined and that the organisational structure is kept succinct. Reporting is fundamental to maintaining a credible and rigorous business case over the course of a delivery and it is crucial that all those involved be able to demonstrate what the genuine status, assumptions, dependencies, risks and issues are at any given point. An active communications programme must be run in parallel to disseminate this information throughout the organisation. Inaccurate reporting and ‘positive spin’ encourages the wrong behaviours and inspires a false sense of security that can change the entire nature of a project.  Regular project updates are a good sign of a well-functioning project.

You can lead a horse to water

Breaking down programme success into a small number of fundamentals is helpful in finding ways of assessing hugely complex programmes of IT and business change. But these fundamentals interact very strongly and are mutually dependent not exclusive. Clarity of purpose and effective governance for example, play a vital role in ensuring a good fit with business context; having smart process is much easier in a good delivery culture. The latter hinges on bringing in key individuals for key roles and is achieved both through effective leadership and by active demonstration – i.e. the project manager is first into the office and the last to complain. It’s also achieved by a focus on quality. If team members see the project manager is targeting the things they view as being important, then it is possible to drive everyone towards a delivery outcome.

At a strategic level, the board must engage closely with programme content. Action-orientated boards will move on the intelligence they receive and ensure a programme is successful, whereas information-orientated boards report to stakeholders on progress but tend to take a back seat in terms of delivery. Performing a health check provides a set of viable recommendations, but if sponsors and stakeholders fail to implement them, then the exercise becomes almost futile. As the saying goes, you can lead a horse to water but …..

Finally, the approach to adopt is one of practicality – i.e. determining what is sufficient to make a project successful. Here, the Pareto Principle applies, because an organisation will typically be resource, time or financially constrained. The results of a health check can be summarised into several themes gravitating around the five fundamentals of project delivery and prioritised according to those that will deliver the greatest impact. At the same time, bringing in a third-party who is independent of the organisation and stakeholders to perform the health check provides a perspective free from the internal constraints discussed.

Performing health checks in an independent and structured manner – e.g. at the end of the design phase and during the build and implementation phases – and taking the right actions at the right time can be an incredibly cost-effective means of ensuring a successful outcome when compared with the cost of a system and the potential price of failure.

Box-out: Health check fundamentals

Ultimately, there are five fundamentals that dictate whether or not a successful outcome will be achieved. These are:

• Leadership – successful programmes require key individuals with the right skills, behaviours and attitudes in critical decision-making roles. Programme director and programme manager are the obvious ones, but leadership is required at all levels, from business sponsors and stakeholders, to those within the programme teams and within suppliers.
• Clarity of purpose – encompasses the vision, the imperative and how to get there. Failing to re-assess these items regularly, agree actions and communicate revisions effectively can result in major gaps opening up.
• Effective governance – in most large organisations the programme board is the key element and should be set up to ensure that all stakeholders have the right level of membership to be credible and authoritative.
• Delivery culture – concerns how people feel, behave and are motivated, with clarity of accountability and a readiness to accept being key to establishing an honest appraisal of real status and issues, and an ability to resolve problems that actually affect outcomes.
• Smart processes that fit with business context – all programmes need clearly defined ways of planning, monitoring and decision-making with the appropriate control, direction and use of resources. These processes need to add value and support rather than constrain the delivery culture, but must be configured to fit within the business they serve and communicated effectively throughout the organisation.

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