Strategic vs. nonstrategic tech projects
There are strategic projects and then there are nonstrategic projects. What’s the difference?
Strategic projects contribute — often in direct and measurable ways — to organizational strategy. That is, they deliver new levels or new kinds of customer value, which in turn generates business outcomes in terms of revenues, profits, etc. So they’re key to an organization’s ability to grow and prosper. Nonstrategic projects, on the other hand, typically address local or tactical issues. They may be needed, even urgently needed.
The danger is this: We may think that any tech project (especially if it goes under a “hot” category) is a great thing to do. We may happily invest in nonstrategic projects not realizing the difference and not prioritizing. And we have traditional success factors (bug-free, on time, within budget) to boost such happiness.
Let’s assume we know the difference, we’ve prioritized, and we want strategic projects. We could still end up launching nonstrategic projects. To avoid that, here are three warning signs we must address.
Sign 1: The driving strategy is not aligned with organizational strategy
Here’s an increasingly common scenario: Somebody tries to come up with a tech or “digital” strategy. Sounds good; sounds like somebody is trying to put it all together on behalf of the organization. But the question is this: Is their strategy aligned with organizational strategic agenda?
Perhaps a worse scenario is the fact that departments are launching their own tech projects. One department is launching a CRM application, another department is trying to push product recommendations to the customer’s mobile device, and yet another is working on a collaboration tool. Each is unaware of, or pays little attention to, the need for integration. So the organization will soon have poorly integrated business processes and therefore offer poor customer experience.
In both scenarios, the consequence is this: little or no contribution to organization’s strategic agenda.
Sign 2: It’s an independent technology project
Often, it’s not just technology, but a combination of technology and business change that collectively makes a strategic contribution. It’s the coming together of certain business elements (processes, technology, etc) in a certain way. On the other hand, what we see more often is organizations executing independent technology projects. For example, they may be planning to “automate” a business process when the organizational agenda requires re-imagining that process.
Sign 3: No access to a method for strategy translation
Selecting a tech project has been a decision-making task. Organizations select a project for a variety of reasons: perceived problems, competition-envy, pursuit of hot tech, or availability of budget. Regardless of the reason, the decision to invest in a project is not made via a rigorous method driven by current organizational strategic agenda. This “wildcatting” approach to selection is like drilling for oil speculatively in an area not already known to have oil.
Well, that was about not using a strategy-driven method for discovery. But strategy translation goes beyond discovery and includes design. So, we need access to a strategy-driven discovery-and-design method. Starting a project without access to a strategy translation method is a sign that the project eventually will be nonstrategic.
Tech projects can make a strategic contribution. And tech projects can be expensive and time-consuming. For these reasons, it’s important to know the difference between strategic and nonstrategic projects, prioritize what kind of project we want to execute, and ensure we have access to a method that can help translate strategy into architecture.