Disappointments in Strategic Planning

Different research initiative point to a variety of causes for strategic planning failures or disappointments . Survey results suggest

- Numerous executive teams spend less than an hour per month discussing about strategy
- Hardly any employees are aware of their company's or firm's strategy
- Most organizations don't align compensation to strategies
- Very few organizations have effective strategic execution methods

DISAPPOINTMENTS EVEN IN WELL MANAGE BUSINESSES

While you look meticulously at the top long-term performing companies in any industry, you find outstanding strategic management system, ability to develop strategies and implement them. However, the disappointment level with strategic planning processes irrespective of the company, is high. Eric D.

Beinhocker & Sarah Kaplan report in McKinsey Quarterly:

Senior executives generally agree that crafting strategy is one of the most important parts of their job. As a result, most companies invest significant time and effort in a formal, annual strategic-planning process that typically culminates in a series of business unit and corporate strategy reviews with the CEO and the top management team. Yet the extraordinary reality is that few executives think this time-consuming process pays off, and many CEOs complain that their strategic-planning process yields few new ideas and is often fraught with politics.

Why the mismatch between effort and result? Some claim that the annual strategy review frequently amounts to little more than a stage on which business unit leaders present warmed-over updates of last year's presentations, take few risks in broaching new ideas, and strive above all to avoid embarrassment... One executive told us. "There is a lot of dancing, waving of feathers, and beating of drums. No one is exactly sure why we do it, but there is an almost mystical hope that something good will come out of it.

SIMILARITIES BETWEEN STRATEGIC PLANNING AND SOFTWARE DEVELOPMENT

There are significant similarities between software development and strategic planning. Possibilities for breakthrough improvements in both worlds are tremendous. Both require a vision of the future, however, the specifics of how to exactly achieve the vision are usually unclear. Both processes require enormous amount of time in planning, explaining and achieving buy-in.

COMPUTER SOFTWARE DEVELOPMENT FAILURES

The failure percentages of software projects are very high. The Standish group reported that :

- 9% of projects end up on-time and on-budget
- 52.7% of projects will amount to 189% of their original estimates
- 30% of computer software projects are so badly carried out that they are canceled prior to completion

According to Info-Tech Research Group, only 11% of business organizations consider technology a "strategic weapon".

According to National Institute of Standards and Technology, software defects cost nearly $60 billion annually; 80% of development costs involve identifying and fixing defect.

Projects completed by the largest American companies have only approximately 42% of the originally planned features and functions.

WHY SOFTWARE DEVELOPMENT PROJECTS FAIL?

The reasons that IT projects struggle according tO study results reported by Standish group include :

- Lack of User Inputs
- Incomplete Requirements & Specifications
- Changing Requirements & Specifications
- Lack of Managerial Support

BEST PRACTICES SOFTWARE DEVELOPMENT

IBM reports that the best practice in software development is:

It is crucial to decide on the appropriate development life cycle process for the project at hand because all other activities are derived from the process. For most modern software development projects, some kind of spiral-based methodology is used over a waterfall process...

Agile development comprises the different spiral-based development techniques. According to various surveys over the last 9 years, Agile has led to higher software efficiency enhancements, cost cuts , and reduced development time frames. Moreover, the claimed adoption rate of agile development is great. The question nowadays isn't do agile methods work, but rather what are the agile best practices and how do we apply them effectively ?

WHAT IS AGILE?

IBM describes agile development as :

- a collaborative, incremental, and iterative approach to software development that can generate high quality software in a cost effective and timely manner. Unlike traditional software development, agile development emphasizes flexibility, continuous testing and integration, and rapid delivery of functionality .

AGILE PRACTICES INCLUDE:

- Simplicity
- Constant co-operation between business people and developers
- Customer collaboration over contract negotiation
- Recognize that you have a broad range of stakeholders
- Turn stakeholders into developers
- Adopt stakeholder terminology
- Individuals and interactions over processes and tools
- Working software over comprehensive..