The Shift Toward Dynamic Investment: IT Action Steps, Part 2

Why an ‘anytime, anywhere’ funding approach makes sense

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IT has already moved toward becoming an agile enterprise, shifting away from waterfall-based development efforts. Failing fast and tackling small projects have become familiar ideas in development, says Jason Byrd, Managing Director, Technology business management at KPMG. “The IT organization has really ‘gotten religion’ lately about moving to an agile enterprise,” he says.

But traditional IT finance funding processes, with their long lead times and multitude of requirements, will not be able to keep pace with agile development and rising customer demands for speed and flexibility. As detailed in Part 1 of this two-part blog series, dynamic investment is a new, necessary funding model for the future of IT:  Similar to working with a venture capital (VC) firm, it enables investing almost anytime and anywhere — based on value, releasing minimally viable products, and gauging customer response, while easily changing or moving in a different direction when needed.

“At KPMG, we have relationships with the finance community and know how they work, but we also know how the world is changing,” he explains. “We want to solve for that and bridge those gaps as IT organizations transform.”

 Funding technology through an annual budget cycle no longer makes sense. “Now, you have to build things fast and beat your competitors to the market,” says Rob Breakiron, technology advisor at KPMG. “While the traditional funding constraints placed on the technology delivery organization gave executives some control over technology sprawl, it also hedged away many of the possible market-shifting winning ideas.

Dynamic Investment Get-Started Action Steps

Instead of seeing technology spending as a project, companies should view it as an investment in strategic value. These are four essential action steps to get started:

  1. Start small. “We're not saying just flip and the board and completely start over,” says Breakiron. “The hardest shift in mindset is cultural, not technical.” Shift away from project-based budgeting toward lean product funding, starting with one or two value streams and fund small to see how your business reacts to it. “Take your lessons learned and expand over time as you build trust.”
  2. Be prepared to fail fast. Traditionally, different IT projects were approved at the top, and with more success, more trust was built with the business. “Now, we're seeing that's too cumbersome,” says Byrd. “We need to flip it where the idea shouldn't be about success or failure, but to identify failure early.  If you’re not failing, you’re not innovating.”
  3. Think like a venture capitalist. “You’re going to have to think like Mark Cuban now, like a venture capitalist would,” says Breakiron. That means continually evaluating bold new ideas that challenge the status quo, while being ready and willing to invest in ideas that make financial sense, even if they’re not in the capital plan.
  4. Provide transparency. To place the right dynamic investment bets, IT needs to effectively discuss the benefits of an investment and shape the technology portfolio accordingly. That means linking technology to business objectives and making those linkages transparent -- inside and outside of the IT organization. “You need to track your projects well with better data and understand where your money is going,” says Byrd.

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