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Digitalization Projects

Youtube video about digitalization project: Click here!

Characteristics

In a digitalization project there are two possible focus areas, digitalization and digital transformation.

• Digitalization - The adoption or increase in use of digital or computer technology by an organization, industry, country, etc.
• Digital transformation - DT is defined as the changes digital technologies can bring about in a company’s business model, which result in changed products or organizational structures or in the automation of processes

There are therefore two types of purposes of digitalization projects. If the project is focused on digital transformation, the purpose is to redesign the organization through the introduction of digital technologies, achieving benefits such as productivity improvements, cost reductions and innovation. These kinds of projects therefor share many characteristics with reorganization / restructuring projects. Digitalization projects are often related to a company's strategic perspective.

If the project is focused on digitalization alone, the purpose is to create value in the process by automating the process, improving the product/process or improving/simplifying communication. For the rest of this text, the focus will be on digital transformation as most digitalization projects also have effects on the business model to some degree.

All projects have a set of common characteristics that separate them from the everyday work in organizations. For a digitalization project we could expect these characteristics to have the following degree of presence in the project.

• Uncertainty is high in this type of project as many are affected by the transformation. There are also many possible solutions in digitalization projects.
• Change is a central characteristic of the project type, and this change is often the most important result (important impact).
• There are not so many limitations in this project type. There might be some time limitations and cost limitations, and limitations set by the end users/ those the project affect.
• As it often is important to involve all departments, and make the purpose and value of the digitalization clear to the entire organization, the organizational complexity is high. However, the digitalization projects are often internal and does not involve that many external parties.
• Impact on business is seen as a success criterion, and is therefore highly present in these kinds of projects.

This is a generic consideration of degree of presence in reorganization / restructuring projects, but it can be expected that individual projects will show individual differences.

Success criteria

• Create value in process
• Create positive impact on business

Success factors

• Clarity of goals
  • Make it clear to everyone in the organization what is being done, and why.
• Participative project process
  • As the digitalization impacts the business, it impacts everyone within the company. It is important that everyone is involved to succeed with the changes, so that the impact has positive effects.
• Good project manager (Knowledge and insight)
• Correct composition of project participants
• Motivated project participants
• Communication of project importance
• Involved and motivated management
• Clear project mandate

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Pitfalls

• Not considering the changes the digitalization creates in the organization, and the people it affects. This can create resistance to the change.
• Not working toward the right goal. What transformation the company wants to achieve should be clearly defined.
• Silo working (Not involving all departments). The digitalization should be understood as important by everyone. Silo work can create lack of motivation.
• Declaring success to early. Implementing the new tools does not indicate success by itself. The tools should successfully be used to create change and value to processes.
• Lack of faith in digitalization. Should be a belief that the digitalization can bring about positive change and value creation.

Read more about pitfalls in digitalization projects here!

Stakeholders

Risks

Recommendations

1. Know how digital transformation can add value to your business
2. Create a good plan to achieve your organizational goals
3. Define the expected outcome of each initiative across your organization
4. Engage executives, leadership roles, and all employees in the digital transformation
5. List out existing technologies and capabilities
6. Perform continuous evaluation and modification

Read more about recommendations for digitalization projects here!

ICT- and software projects

Characteristics

Information and communication technology (ICT) and software projects, can be seen as a subcategory of restructuring projects, were the overall goal is to achieve change in systems, processes, and peoples work methods. But, for this project type the main deliverance is more concrete than in restructuring projects. In information and communication technology (ICT) and software projects, there are two possible main deliverances;

• Procurement of IT-solutions and software project.
• Development of IT-solutions and software projects.

All projects have a set of common characteristics that separate them from the everyday work in organizations. Although there always be some degree of variance for projects, the degree of the following characteristics can be expected to be present for the project type:

• Uncertainty: The degree of knowledge towards the ICT-solution or software can affect the degree of uncertainty in the project, and especially the for solutions with a high degree of innovation it might be difficult to predict the possible events, factors and the development over time.
• Change: As a main outcome, change is a central characteristic of the project type, and organizational change is the result of the project if it is successful.
• Limitations: There are not so many limitations in this project type. There might be some time limitations and cost limitations, and limitations set by the end users/ those the project affect. Restrictions, limitations or guidelines connected to the project and its outcome will vary by the different projects. In general, the solutions developed or procured will have some degree of limitations, but for the project type as general, this is not recognized as a key factor.
• Organizational complexity: The degree of complexity will vary by different factors. Examples can be the project size, how many people and processes that will be affected by the change, and the degree of change in the project's outcome. Number of departments and units involved, the need for internal and external competence and resources in need to achieve the set outcome.
• Impact on business: In projects with a high degree of change as a outcome, the impact on the business is usually high. The amount of criticality of the project will also affect this factor. The degree of impact the change will have on the business or strategy will usually also affect the access to and priority off resources during the project.

Success criteria

• Positive change in the wanted systems, processes, and/or peoples work methods.
• End users satisfied.
• Management satisfied.

Success factors

• Clarity of the expectations of the different stakeholders affected by the change, especially the end-user of the solution
• Involving project process
• Good project manager (Knowledge and insight)
• Correct mix of project participants
• Motivated participants
• Participative project process
• Correct composition of project participants
• Motivated project participants
• Early involvement of end-users
• Flexibility in the project plan

Pitfalls

• Misunderstand the scope of the project and the expectations of the main goal.
• Not having freequent small deliveries, instead of trying to handle everything at once.
• Resistance for change due to lack of involvement and communication of the scope and need for change.

Stakeholders

• End user/ those affected by the change
• Management
• Project praticipants
• Project manager

Risks

• The main challenge is to develop a full understanding of the stakeholder’s expectations, and make sure the outcome of the project meets those expectations- communication and early involvement.
• Resistance to change- Change management should be in focus, this too create acceptance through communication and involvement
• Not considering the changes the digitalization creates in the organization, and the people it affects. This can create resistance to the change.
• Silo working (Not involving all departments). The digitalization should be understood as important by everyone. Silo work can create lack of motivation.
• Declaring success to early. Implementing the new tools does not indicate success by itself. The tools should successfully be used to create change and value to processes.
• Lack of faith in digitalization. Should be a belief that the digitalization can bring about positive change and value creation.

Project organization

In project structures, both flexibility and resource control can be advantageous, however, the transfer of knowledgeand competence can occur, elements that are important for successful process optimization and work tasks. In functional structures, decisions may take a longer time and delays can therefore occur. In addition, silo thinking may occur, in the overall understanding of the project's importance to the business, or how the end users can be affected by the project result. Critical elements for this project type.

For ICT and software projects, therefore, a project organization with matrix structure is recommended, ie a combination of the other two structures. The reason is the desire for efficient utilization of resources, exchange of experience and interdisciplinarity. In this way, the involvement of stakeholders of the project and the final product can be achieved, especially important in order to gain a good understanding of the processes and or tasks to be improved. A problem with this type of organization, on the other hand, is that conflicts between prioritizing other tasks and the project, and that a larger workload than normal can occur.

A matrix structure can occur in a weak, strong and balanced degree. Where the weak is aimed at functional structure, and the strong against project structure. Since focus on the end users is central, a weak matrix structure should be avoided. To prevent the disadvantages of a project structure, a balanced matrix structure may be preferable.

Recommendations

• Understand the wanted outcome
• Early communication, focus and involment of stakeholders (especially the end-users) to make sure the project covers the end-users needs and is directed to the wanted change
• Resistance to change
• Change resistance is a important factor when dealing with this project type, and a focus on change management is a key factor for success. This can be done by making sure that the need for.
• Lack of motivation
• Involvement of stakeholders and deliverance.
• Lack of competence
• Make sure that the project team have the needed competence, that the expertise in need is involved. It is also important to make sure that the end-user and management have the needed competence to use the solutions.
• The new product/system affects other parts of the business in unwanted way
• Need to check all interdependencies in the organization/business to make sure that you don’t get unexpected effects of the digitalization.
• New ICT- and software does not work with existing infrastructure
• Testing of the solutions before implementation, and use expertise in procurement decisions to avoid solutions that can't be used.

Reorganization/Restructuring Projects

Characteristics

Reorganization / restructuring projects are projects that introduce new work processes, reorganizes the organization, training for use of new system, or shutdown of existing systems or processes.

Reorganization / restructuring projects are soft projects. According to the framework for analysis presented in the resaarch paper "Hard and soft projects: a framework for analysis" (2004), developed by Crawford & Pollack, softness and hardness of projects can be assessed in seven dimensions as shown by the figure below.

Important characteristics in Reorganization / restructuring projects are that the projects don't have physical deliverables, but abstract. The projects also introduce change into the organization.

All projects have a set of common characteristics that separate them from the everyday work in organizations. For a reorganization / restructuring project we could expect these characteristics to have the following degree of presence in the project.

• Uncertainty is high in this type of project due to goals being ambiguously defined, and many possible solutions existing.
• Change is a central characteristic of the project type, and organizational change is the result of the project if it is successful.
• There are not so many limitations in this project type. There might be some time limitations and cost limitations, and limitations set by the end users/ those the project affect.
• The organizational complexity.
• As change is central in the project, you would expect an impact on the business. In some projects this impact will be mostly internal, changing the way the organization works. This does not necessarily affect what the business delivers. In other projects it restructures the business to the degree, where it changes what they deliver.

This is a generic consideration of degree of presence in reorganization / restructuring projects, but it can be expected that individual projects will show individual differences.

Success criteria

• Create positive change in organization
• End users satisfied
• Satisfied Management

Success factors

• Clarity of goals
• Participative project process
• Good project manager (Knowledge and insight)
• Correct composition of project participants
• Motivated project participants
• Change management. Click here for video!

Pitfalls

• Forgetting the people who are affected by the change.
• Not managing expectations. There should be clarity in expected results and benefits.
• Not focusing on making people want to change, but on making the change happen.
• Losing focus on day to day business and customers during the change.
• Relying too much on the management to push the change.

Stakeholders

Risks

New Product Development Projects

New product development projects introduce new products to the marketplace. It typically involves all stages from idea, concept, research, prototyping, developing, testing, launch and market and sale. New products can be:

• Products that a business has not sold before or are familiar with but has been brought to the market by others.
• Products created by innovation and brought to the market for the first time. These products can be completely original products, or they can be products that has been modified and improved.

Characteristics

Success criteria

• Profit
• Increased market share and competition

Success factors

Robert G. Cooper has done several studies about new product development. From these studies it has been found that there are significant differences between the products that achieve success and those that do not succeed in the market. Cooper summarizes his finding to succeed in product development in 10 key points (ranked in order of priority):

1. A superior differentiated product that adds value to the customer.
2. A well-defined product before the development phase.
3. A product that reflects customers demand.
4. Clear and sharp product definition early in the project.
5. Resources for and a well-planned market launch.
6. Incorporate stop/run decision points as part of the product development process.
7. Organize the product development around a cross-functional team.
8. Base the project development on the company’s competence and resources.
9. The world product – a global orientation in product development.
10. Support from top management - follows up the process

Pitfalls

The main challenges in product development projects is to create compliance between product complexity and degree of innovation, with good routines for scope control, follow-ups, procurement of skilled technical resources and close and good follow-up of top management.

According to the book “Winning at new products” by Robert G. Cooper, there are three main reason for failure:

• Poor or lack of market research
  - Which leads to lack of understanding consumers demand and market situation.
• Technical problems
  - Related to design and production. This is often due to problems in the early stages of the product development process.
• Bad timing
  - The reason is often technical problems, poor planning and lack of control. Missing the “window of opportunity” (the time which is the most beneficial to launch the product) often leads to failure.

Stakeholders

• Consumer
• Project team
• Product manager
• Top management

Risks

Risk:
- Lack of interest for product / Change of demand, need and expectation of customers.
- New competitors and products in the target market.
- Lack of financial and human resources.

Measure:
- Keep track on market situation and consumer demand through the whole project process.
- Thorough project planning to avoid going over budget.

Project organization

The project organisation consists of top management, project manager and project team:

• Top management supports the project with resources and keeps track on the development.
• The project manager has the overall responsibility for the project and ensures that the project is on progress, are within scope, plan and process and takes actions if there are deviations.
• The project team does the planning, analysis and develops the product.

Recommendations

Robert G. Cooper found through his studies thirteen key activities:

1. Initial engagement

• Invest in the project (human and financial resources).

• Initial market research; a quick and effective examination of market potential, needs and competitive situation.

• Early technical research that addresses questions such as whether the product can be developed, how, opportunities for mass production and distribution. Investigation is often conducted as a discussion within the company.

• A thorough market analysis that addresses the user's wants and needs, concept studies, positioning opportunities and the competitive situation. Often goes as interviews and surveys with future customer groups.

• The decision to enter a full development program. May include a financial analysis, risk assessments and a qualitative business assessment.

• The actual development of the physical product.

• Testing the product internally under controlled forms.

• Testing the product in collaboration with customers. Customers can try to use the product in their daily lives for a period.

• The product can be offered in a test market. Try to sell the product to a limited number of customers or in a limited geographical area.

• A test production to see that the production equipment works properly.

• Here, the decision is made on final commercialization of the product. A final analysis before starting the sale.

• Start-up of full-scale production

• Full market launch. Implementation of the marketing plan.

Construction Projects

Youtube video about construction project: Click here!

Characteristics

Constructions projects can be associated with building, demolition etc. Important characteristics in building projects are that the projects are affected by changing project specific environment and -limitations, and therefore has a high demand for/ is highly dependent of good project management and planning. The product of a building project is usually tangible and measurable by physical means.

• Uncertainty is medium high in this type of project due to a high amount of unknown information/details/values in the early stages. However, the uncertainty is excepted to decrease throughout the project life cycle.
• Change are in most cases, not a focus area in building project. The building is usually not affecting e.g. how people live.
• Building project can at some degree be limited by project specific context, such as parallel building project at site, cost and time limitations.
• Building projects are often associated with a high amount of involved contractors, parallel activities etc.
• There is in most cases a lot of money at stake in constructions projects. The outcome of the project can therefore be critical for involved organizations.

This is a generic consideration of degree of presence in building projects, it can be expected that individual projects will show individual differences.  

Success criteria

Success criteria for building project is project specific. Some generic examples are:

• Profit
Finished within a time limit
• Certified BEAM excellence
• TRI < 1 (HSE indicator)

Success factors

Literature present important contributing factors to be considered in the work of an achieving project success in a construction project:

• Early stage planning,
• project manager authority,
• choice of procurement strategy,
• choice of contractor,
• choice of project manager,
• and type of contract,
• information flow,
• clarity of requirements.

Pitfalls

• Ambiguous requirements
• Reacting Poorly to Community Concerns
• Going Over Budget
• The Unreliable Worker
• Scheduling Snafus- Schedules not lined up
• The “What Did We Just Hit?” Moment
• Permitting Hurdles

More suggested pitfalls and proposed solutions can be seen here!

Stakeholders

Risks

Research Projects And Studies

Characteristics

• The main delivery is usually a report.
• The report can provide as a basis for a decision on the possible options for continuation of a project or provide as a basis for control.

Success criteria

• Finances for implementation

Success factors

• Structured and systematic risk management process
• Ability to problem solve
• Flexibility
• Expertise
• Good information flow

Pitfalls

• High degree of uncertainty about the outcome – the project can be easily influenced by human factors
• Lack of expertise
• Underestimating of risk factors
• Insufficient description of scope of work
• Lack of involvement from top management
• Assumptions
• Power struggle
• Conflict between line and project

Stakeholders

• Project owner
• Top management
• Project manager

Risks

• The project is not finished due to deadline
• The results of the project are not used
• Different opinion on content

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