How do you prove the value of IT consulting projects?

The three key attributes is people, process and technology. It has to be integrated with these attributes. Once you have that, then comes scope, deliverables, timelines, outcome, how will you measure and report etc,

Start with the end goal and work backwards. For example, lets assume your goal is to automate common customer service queries with generative AI. Figure out your north star metric for success. Then take a look at your existing process and map it out. Then understand the key people that will impact and how you need to transition / re-train them with Gen AI taking center stage. Then create a digitization project from data integration and feeding customer data to LLMs, to outputs, testing and accuracy measurement to reduce hallucinations. Figure out a roll out plan, measure, iterate and roll out to other areas / regions.

Apart from typical project management, how do you bring elements of feedbacks and voice of customer to enhance and improve. It may vary from project to project, typical product development may have scope change, how agile are you to adopt those changes

Phased deliveries that build towards an ultimate objective or result are crucial. Demonstrating early benefit realization - low hanging fruits - are a good way to build confidence and commitment to seeing large projects through to completion. Not every phase can have a positive ROI, but nor will clients spend money on larger initiatives without tangible successes.

To gauge the success of IT consulting projects, we often turn to clear metrics like gross profit revenue and customer base growth. But while these figures are important, they only tell part of the story. The true measure of a project's value often lies in the more intangible domain of customer satisfaction. By staying connected with clients and employing targeted surveys, we can tap into direct feedback. This not only highlights successes but pinpoints areas for refinement. Balancing tangible outcomes with the insights derived from client feedback ensures we capture a project's full impact, paving the way for both immediate results and future improvements.

You should not wait till the end of the project to list your accomplishments, or declare victory, rather work with your customer to provide success or accomplishments based on key milestones, engage your customers through the project life cycle to highlight your accomplishments such as cost savings, automation story, increasing productivity, delivering value to customers etc.

Requesting/requiring customer statements at the beginning of every project is an important task. Without this, one my engagements that made the client over $30 million in two months, based on a starting value of 20 million has gone largely unnoticed. Make sure you request/require a closeout or case study as part of your engagement.

Future-related valuation impacts may be particularly valuable. An increase in revenues, accelerated revenue recognition, reduced churn and other core metrics that drive valuations should not be missed. Savings are not always where they were expected at the beginning of the initiative. Look wider.

When developing, delivering and wrapping up an IT consulting gig, remember that technology expenses and benefits are not limited to the IT function. Much of the value (and cost) of IT is not actually visible to organizations. One project I delivered found that the most tangible value of the project was actually in finance. A billing system flaw was resulting in tens of millions in unpaid or disputed invoices. It had been completely missed by management that the billing system might be the flaw. Simply fixed, the returns were huge.

IT is typically a cost center so value could be proven through improvements in net profitability/ free cash flow. Another metric that would be good to gauge is improvements in employee satisfaction or retention. Smooth IT operations lead to more satisfied employees which ultimately may even potentially contribute to improvements in top line due to a more effective sales force.