When Eric Slavinsky became CIO of both Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) Company, he inherited an IT organization that often worked independently from other areas of the business. Slavinsky saw that changing the company’s governance structure would help bring IT together with the rest of the business.
“Previously, IT would fund infrastructure, security and support, and the lines of business would fund major application projects,” says Slavinsky, now CIO of LG&E and KU, as well as PPL Corp., the utilities’ parent company. “We didn’t have one comprehensive approach to IT investments, so we had a lot of unplanned projects.” Without a consolidated plan, IT’s resources and time were strained.
Slavinsky knew that PPL needed one budget for IT, not two, so he started with the executive committee. The concept was simple, but the change was not.”I encouraged them to see that we needed a single technology plan, a single technology group, and a single technology budget,” he says. “When people give up budget dollars, they feel like they’re giving up some power. I needed to show our business leaders they were not the only ones giving up their budget. I was too.”
Once Slavinsky gained executive support to consolidate budgets, he and his team developed the Technology Portfolio Management Committee (TPMC), a group of directors from across the company who meet monthly to prioritize technology investments. When business cases warrant additional funds, the TPMC appeals to the Resource Allocation Committee, made up of the company’s vice presidents and officers.
Governance growing pains
In establishing the TPMC, Slavinsky thought he may face some resistance and maybe even concern that IT was gaining control of business budgets. “By transferring their budgets, business leaders thought their projects wouldn’t be prioritized,” Slavinsky says. To offset that concern, he made sure the TPMC was well populated with business leaders, and he purposely left the process that the TPMC would follow undefined. “We decided to make the TPMC business-heavy and the process ambiguous, so the group could better collaborate. We wanted to be clear that we were developing the new process together.”
Within a few months, the TPMC had come up with a three-level investment priority process, and Slavinsky saw the relationship between IT and its business partners begin to strengthen. “When people presented their cases, they fielded more questions from their business partners than from IT,” he says. “For the first time, people started thinking about projects that were best for the company as a whole, not necessarily for their own area.”
TPMC members began to accept that the capital investment their business areas originally gave to the centralized IT budget would not necessarily go toward projects solely for their groups. It all depended on how the TPMC prioritized the investment. With the improved collective company mindset, members on the team focused on which projects would best impact the company.
The new governance structure instills confidence in employees and executives that the company is working on the right technology projects and, most importantly, has influenced the business community to be more knowledgeable about the true costs of IT.
Slavinsky says he learned three important lessons from the experience.
3 tips to help merge tech budgets for the business and IT
1. Be the first to let go
“At first, I was worried the TPMC might not support new servers, switches and networks,” says Slavinsky. “But through the prioritization process, everyone learned how important the infrastructure is.”
2. Involve fellow executives
When Slavinsky first joined the company, he immediately began establishing relationships with his peers. Those relationships, along with his team’s delivering projects on time and on budget, eased the company’s move toward a consolidated governance. Based on those relationships, IT started to win some projects that the business would have normally managed. “Over time, our executives agreed that if we consolidated budgets, we would do a better job with planning and delivery.”
3. Rely on your team
Once his leadership team established the TPMC, Slavinsky stepped away and now relies on the group — both in IT and in the business — to run effectively. “Today, I don’t attend the meetings, but I do review the meeting minutes,” he says. “If the TPMC can’t resolve an issue, they will escalate it to me and other executives, but I can’t remember the last time that happened.”
Regardless of industry, IT no longer simply enables technology strategy, it informs or even defines it. That means the IT budget is not IT’s alone, nor does it belong to line of business leaders. The IT budget is the company’s budget, and it is the job of the CIO to find structures that turn this concept into a reality.
About Eric Slavinsky
Eric Slavinsky joined LG&E and KU as CIO in October 2010 and then assumed the CIO role for PPL Corp., in July 2014. Previously, Slavinsky was the vice president of IT for Comcast Cable. He is a board member for both PPL Solutions and The Kentucky Center. Slavinsky received a Bachelor of Business Administration (BBA) from Cleary University in Ann Arbor, Mich.
Martha Heller is CEO of Heller Search Associates, an IT executive recruiting firm specializing in CIO, CTO, CISO and senior technology roles in all industries. She is the author The CIO Paradox: Battling the Contradictions of IT Leadership and Be the Business: CIOs in the New Era of IT. To join the IT career conversation, subscribe to The Heller Report.