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Managing Megaprojects
The Quarterly: With such large-scale technology deployments, what have you learned about managing megaprojects?
David Fisher: Many of the things that would portend a successful ERP implementation of small to medium size would portend success for the large programs at the DoD. We've looked at the top reasons ERP implementations fail. Many failures come down to governance, change management, requirements management, customization, the skill sets of the people involved, and testing. Those concepts are immutable, regardless of size and scale. Our challenge with these immense projects is that implementation takes such a long time, spanning several generations of IT development. That can be problematic and leave an opportunity for endless analysis and debate.
It's also important to clarify what we're trying to optimize, since one person's definition of the enterprise may be different from another's. From my perspective, the enterprise is the Department of Defense. But if I go to the army or navy, they might define the enterprise differently; if they're trying to optimize the army or navy as opposed to the DoD, we end up with different solutions.
Let me give you one example of how the BTA's involvement helped the army reexamine the scope of some of its systems to good effect. The army had three big ERP systems-one that handled finance and two for logistics (a more tactical system for the front end and a more wholesale system for the back end). All three systems were operating fairly independently. Our observation was that, although these independent systems may be optimizing the parts, they were suboptimizing the whole in terms of business processes, management, and the utilization of technology.
Through some pretty heavy engagements-some well received, others not-we were able to demonstrate that there was a better way to use technology to reduce risks the army would face in the way the systems communicated, reconciled data, and otherwise performed together. We recommended that the army connect the three systems more closely because, for example, each of the logistics transactions was eventually going to be a financial transaction.
If you look at things that way from the beginning, it fosters an environment where you look at the business from end to end. The army has now adopted some of those concepts and has a cross-domain governance model. So we got the conversation going and it's had this positive impact. We weren't empowered to do any of that by our authority. We were passionate about it, and we were able to convince the army to let us in on the dialogue and help them come to decisions that represented a change for the better.
The Quarterly: Any other big lessons to pass along?
David Fisher: Question every assumption. We often assume that we have to do something in a certain way because it's the policy or the way we've done it before. Question that assumption, and if it doesn't make sense, find out who owns the policy or who owns the way it was done before. Even laws change. Sometimes the answer is no, and that's it. But if you have a case that helps everyone to agree that the old way doesn't make sense and that there's a better way, a transformational way, of doing things, question the old way.
About the Authors
James Kaplan is a principal in McKinsey's New York office, and Kreg Nichols is an associate principal in the Atlanta office.
This article was originally published in The McKinsey Quarterly. Copyright (c) 2008 McKinsey & Company. All rights reserved. Reprinted by permission.
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