This may be a bit controversial, but I am often surprised how often in supply chain-related technology projects the end objective – the improvement in operating results – seems to get lost in the urgency of the project itself.

As an industry, I actually think we are in fact making significant progress in this regard.  As we noted in our review of the 2005 CSCMP conference supply chain leaders are increasingly characterized by an almost relentless focus on metrics. There’s also no question that the ability of our information systems to deliver actual performance data has increased dramatically over the past few years as well, and that has made it a lot easier to compare what we achieved to what we expected.

Still, I have had many personal experiences and continue to hear anecdotes that lead me to believe that many companies and individual projects fall victim to losing sight of real objectives, and that this is perhaps the most significant reason many supply chain technology projects are not viewed as successes after the fact.

Here’s what can happen: the project is of course cost justified, perhaps in significant detail, laying out ablueprint for what results the project is expected to return. There can be several players involved in this effort (project champions, consultants, vendors, financial types), and part of the problem can start here, as some gamesmanship is often involved.  This involves either manipulating the numbers up until they meet the ROI hurdles, or manipulating them down to set a lower target of achievement.

That aside, the real problems usually start after the project has been approved. Often, the implementation teams from the company, its vendor(s), and even the consultants come in, and the focus changes immediately and deeply from achieving the results to meeting the schedule and budget set for the project.

Now “on-time and on-budget” is certainly important. Schedule is often related to key operation needs (e.g., implementation complete before peak season), and an elongated schedule generally means higher costs. Higher costs of course can damage the ROI, and require an embarrassing trip to the CFO’s office to ask for more money. Let’s agree on-time and on-budget is good.

I have also found, however, that as with many things, the “urgency” of on-time and on-budget tends to drive out the “importance” of achieving the expected operating results targeted to begin with. I’ll say even more boldly that in too many cases the original cost justification is put on the shelf, and not really used as the roadmap for what’s supposed to come out on the other end.

It’s also hard to see how project teams focused highly on schedule and budget can be expected to deliver actual operating results. There is something missing in the hand-off from the leaders on all sides (company, vendor, etc.) to the project leaders in terms of result expectations and true definition of success. This is especially true at the vendor level – the implementation teams are often oblivious to the actual operating goals in terms of inventory reduction, reduced distribution and transportation costs, etc.

I have often times over the years asked project team members on all sides what the specific goals and metrics of the project are. More often than not, I simply get the time and budget; when I ask for more specifics about the operation goals, the answer is “I don’t know” or “I don’t remember.” It’s not a difficult observation to suggest if the teams don’t know where they are headed, the chances of them actually getting there are slim.

There are certainly exceptions, and as note above I think this situation is improving in many companies. As just one example, I know as Hershey rolled out its new large-scale distribution centers, logistics management and finance subsequently looked in detail a year after each individual project to see whether ROI objectives were met.

I still believe in far too many cases the focus on results gets lost in the urgency of completing the project, with all the inevitable challenges just getting the project complete entails. We need people focused on schedule and budget – maybe even more focus applied there in many cases. But someone at the top of the project chain needs to be driven primarily by the operating results the project should achieve – because in the end that’s really what matters.

Let us know your thoughts at the Feedback button below.