I think the hardest problem in IT leadership is balancing the many needs against the limited resources and finding the best answers and path for the enterprise through this challenge. In the IT space, there is far more to do than can really be done, yet CIOs and those in leadership positions in IT are asked to do everything with those limited resources. Masters include different business units, different geographies, legal requirements, governance requirements, business continuity requirements, etc. Finding the balance point is the central challenge of our jobs.
I think you have to do some of the following:
- Have a real business problem or opportunity that is being solved. Not a fake one or one that can’t be quantified. There is a book called How to Measure Anything that might help with this. I like the Six Sigma problem statement approach of saying we are going to improve process X by Y% by a certain date. It doesn’t work or fit for everything, but it will work for lots of things.
- Define a template to describe what is going to be done and why it needs to be done. Require every project to address a problem statement, costs, timelines, issues, data definitions, disaster recovery needs, data center requirements, what is going to be turned off/on and when, and several other factors. If you use a standard template, then all parties know the questions that need to be answered in advance and you avoid missing some important part of the decision.
- On the cost front, I like the book Payback: Reaping the Rewards of Innovation by Andrews and Sirkin and their concepts around time and costs on projects. Time to Market, Time to Scale, Costs to Scale and Annual Support Costs are the key elements.
- Work out a program review process with the senior leadership team. Perhaps a committee reviews all programs over a certain cost or all programs that meet some strategic criteria.
- The committee has to think about the whole portfolio because you can’t consider programs one at a time. Relative priorities, sequencing, dependencies, etc. need to be considered. This is hard stuff. It requires thoughtful engagement from the committee and the leadership team of the company.
This 5th step is the probably the hardest part to work out and to keep consistently of high quality over a long period of time. This is one of the key places where the CIO needs engagement with the leadership team of the company and needs to be plugged into the strategy making of the company. I’ll write more on this another time.
Also, there has to be a delegated process to review the programs below the committee approval threshold. I saw a case study years ago of a company and their ‘model’ portfolio management process. The key review point in their process was at $2.5M and everything above that price required senior level reviews in a certain committee. In fact, they had a great reveiw process and I used elements of their process to modify our own. However, it also felt that it ignored the problem of all the projects below $2.5M.