Keep your key projects off the chopping block

How to save make-or-break IT initiatives in troubled times

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"It's no longer a one-dimensional ROI evaluation," says Daughtry. "It has to hit on all the business strategies -- on revenue, margin, EBITDA [earnings before interest, tax, depreciation and amortization], customer experience."

That meant making some changes in one of Harrah's major initiatives so it would bring in more earnings sooner. The initiative, called Personalized Real-time Interactive Slot Marketing (PRISM), is designed to provide information and digital entertainment directly to customers through Harrah's 65,000 slot machines.

Harrah's is aggressively rolling out the project this year in its most profitable markets, where it is most likely to see the highest return on its investment, says Daughtry. In less profitable markets, it will wait till 2010.

Harrah's is also asking business partners to share in the risk as well as the rewards of some other long-term projects, says Daughtry. For example, a technology partner might help fund a corporate pilot project, which benefits the corporate partner and could also generate good press for the vendor.

Ciacchella cites two examples of Deloitte clients that have reorganized projects in order to accelerate business benefits. Both are large companies that are deploying ERP systems. At one company, the initial plan had been to roll out the entire ERP system first, then renegotiate contracts with suppliers. Instead, the company decided to renegotiate contracts now, even though the ERP system isn't complete.

"They won't be able to manage and monitor those contracts 100%, but at least they will get some portion of that benefit now," Ciacchella says. "And they'll probably get better deals on those contracts by negotiating them now, in a down market, versus later, when the market starts to turn around."

Another client decided that its priorities were customer retention and maintaining the revenue from those customers. So it is emphasizing the customer-facing aspects of its ERP project, such as adding capabilities to its Web portals, while deferring fancy back-office functionality such as business intelligence and financial reporting. Instead, the company set up manual, offshore systems to run the back office for a year, Ciacchella says.

Explore new methods

Sometimes the best way to save a strategic initiative is to rethink how to accomplish the project's goal. Go back to the drawing board and look at other ways to approach the problem. Technology advances so quickly that a project planned 18 months ago might now be completed more cheaply and efficiently using different means, says Vivek Kundra, chief technology officer for the District of Columbia, which as of December had a $130 million budget deficit.

Kundra, who has won several awards for his innovative use of IT, is no fan of expensive hardware and huge infrastructure investments. Instead, he favors cloud computing, consumer technologies and the collective ideas of the citizenry. Rather than spending $4 million that the district had budgeted to develop an intranet, for instance, Kundra used cloud computing, Google Apps and wikis to create a portal for only $475,000, he says.

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