Since we're nearing the end of the 2010 planning cycle, it's as good a time as any to review how we plan projects and whether our processes are as effective as they could be. IT planning never truly ends and tends to eat up more time than we think. As a result, CIOs and their teams have an opportunity to lead the charge to get leaner in planning.
IT planning for most companies originates with several IT leaders (with titles like business consultants and portfolio managers) eliciting business requirements for the year, part of a "bottom-up" process. But a CIO needs the ability and the platform within his or her company to say: Here are the 10 projects on our multi-year roadmap and these will guide the majority of our investments, thus greatly streamlining the process.
Diamond's Digital IQ research, in which we surveyed 451 senior business and IT executives of large companies, found that firms spend roughly 240 man weeks per year on planning and budgeting—almost five man years! Think about what could be accomplished with 80% of that time back in the hands of your senior-most leaders. Roughly 25% of this effort is geared toward collecting the project ideas, another 25% toward preparing business cases, and only about 15% on linking the initiatives to the strategic roadmap. Our study also found that the presence of a multi-year strategic roadmap is a strong indicator of company performance, but that only 37% claim to have a clear roadmap. So, to get leaner in planning a company needs to get a clear roadmap and spend more time aligning to it and less time on (tactical) data collection.
It's clear that we're making progress in bridging gaps between business and IT, but to maintain momentum through 2010 and beyond, CIOs will be tasked with sustaining technology's transformational forces. But in order to get better at delivering projects, we need to first get better at planning them. Following are four linked themes that should contribute to a company's effective IT planning process.
Moving Toward Leaner Planning
One of Diamond's financial services clients spends more than half its annual planning at the edges of the organization. In other words, the IT leaders responsible for each of the lines of business work with their teams to collect a list of all of the projects to consider for the coming year. The individual lists are then rolled into a master list and the result is a set of investments 300% to 500% larger than the expected IT investment dollars available. The remaining half of the planning time involves trimming down the list into something closer to the numbers provided by the CFO's team.
What's missing is a linkage from the strategic roadmap to the annual plan. A CIO needs to make sure that all IT investments can be tracked back to one or more specific business objectives and more detailed capabilities.
High-level business objectives should be driven into their corresponding business capabilities, and this requires not only an initial exercise but also a systematic approach to keep it current. At Diamond, we recommend enterprise architecture as the function to own the business objective to business capability mapping as well as the subsequent links to the underlying systems and infrastructure. Consider Wal-Mart. The company relentlessly focuses on the customer, which translates into an objective to always have product on-hand. But this objective doesn't stand alone. Rather, it is supported by several business capabilities that are, in turn, enabled by information technology.
Similarly, a Diamond healthcare client produces a great report that tracks IT's delivery of the business capabilities month-to-month and quarter-to-quarter. It uses business language and terms defined by the business, and it represents a simple and direct way to show what IT is working on and that it directly contributes to moving the business toward its goals. This report has a side benefit of always keeping the elements of the strategic roadmap in front of the business and IT leaders.
An iterative planning approach will provide better visibility into delivery objectives. Likewise, progressive, balanced planning provides better visibility into the organization's investment, return, and strategic direction. How much more effective could your organization be if it spent more time working the plan and far less time planning the work?
Chris Curran is Diamond Management & Technology Consultants' Chief Technology Officer and managing partner of the firm's technology practice. He writes the CIO Dashboard blog at www.ciodashboard.com, and can be reached at Chris.Curran@diamondconsultants.com or @cbcurran on Twitter.