Today IT is focused on building transformational business models and using data to operate businesses at the speed of competition.
Information technology (IT) has changed significantly over the last five years. Instead of being focused on creating business productivity and improving back-office business processes, today IT is focused on building transformational business models and using data to operate businesses at the speed of competition. So just how do IT organizations prioritize competing corporate change initiatives? This matters to IT organizations, the businesses they support and the ecosystem of vendors that surround IT organizations.
The Corporate Agendas That Most Influence IT Priorities
Three themes clearly matter to chief information officers (CIOs) these days: 1) driving business growth, 2) improving customer experience and 3) eliminating complexity for employees and customers.
Former Michigan State University CIO Joanna Young says, CIOs should “focus on whatever best supports sustainable growth. Employee experience and customer experience are getting more attention. This includes a bigger slice of investment pie because leaders realize they support business growth.”
Mevotech CIO Martin Davis likewise suggests the CIO investment list should include, “business growth, efficiency, revenue generation and customer and employee experience.”
University of Michigan CIO Carrie Shumaker says investment should be made to “work on back-office processes needed to improve efficiency in order to reinvest in customer experience.”
This is what Stephanie Woerner of MIT-CISR calls industrialized. If organizations are in silos and spaghetti, this is a great step forward.
Arts and Wellness CIO Paige Francis shows that she is all in on this. “Organizations need to eliminate complexity and paperwork via technology. COVID-19 made everyone realize Band-Aids do not fix bullet holes.”
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How to Go About the Prioritization Process
CIOs have a number of answers to this question. The answer should be a combination of business value generated ROI and strategic impact to rank the projects.
For the American Association for the Advancement of Science CIO Jay Brodsky, everything distills down to one thing: alignment with strategic goals. While this remains important, ROI, business model and revenue generation require less precision than historical business productivity improvement projects.
Carrie Shumaker suggests, “Start with the strategic plan and associated goals. Anything to directly support those items goes first. In real life, investments are proposed and prioritized iteratively by IT leadership and business leaders.” In this process, CIOs should work with business leaders to ensure prioritization is a part of ongoing governance.
New Zealand CIO Anthony McMahon says, “Most of the companies I have worked for focus on strategic impact in the medium term. This is usually after we have modeled out and shown that 99% of the time ROI will follow a J curve.”
Former CIO Isaac Sacolick argues “[For] an agile PMO. This should have non-binding voting by stakeholders, product management owning the final decisions, veto escalations from architects, security and other experts.”
For this process to work, CIOs should listen, document, share, listen again, update and share the resulting priorities. Will Weider, CIO at PeaceHealth, argues for: “1. Creating business-led prioritization councils for each business unit; 2) establishing a maximum number of simultaneous projects (project lanes) for each council; and 3) creating and continually updating roadmaps within each council, filling the lanes with current and future projects.”
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Prototyping Before Making Substantial Investment?
Prototyping has been a best practice in startups for years. I have used them to validate new ideas and conceptual products. CIOs have seen the importance of this approach as well.
Brodsky says, “Prototyping is such a great way to elicit feedback. Sometimes, our stakeholders cannot quite describe what they want, but if you put an example in front of them, the conversations become much easier.”
I remember several years ago talking to an enterprise architect at one of Canada’s largest banks. They told me about a business intelligence project where they used waterfall project management. The customer told the project manager what they wanted. But after the project was nearly complete, six-to-nine months later, the customer told them that what had been built was not what they wanted. They had to start the project over again.
This is the problem DevOps and Agile aim to fix. Sacolick says “POCs, prototyping and pilots should be ingrained in an agile experimental culture and not just for substantial investments. People saying, I know exactly what and how to implement was wrong. Historically, this was professed by too many arrogant waterfallers.”
Davis agrees and says, “prototyping is a better way to define what and how you are going to move forward. The bottom line today is you need clarity on the investment, purchase costs and implementation costs.”
To increase the probability of success with experiments, CIOs should seek agreement and funding with business leaders. This helps CIOs make sure there is potential business ROI for the time and effort of prototyping. This ensures buy-in earlier in the process. Where a product is being procured, an appropriately defined prototyping effort can be defined.
Young says the power of doing this is “It can confirm functionality, get early feedback, create excitement, and even firm up sponsorship and alignment. As well, it can help with managing investment costs and time-to-market. Prototyping is short money for good value.”
Francis adds, “I feel building from a greenfield, we get to be highly iterative and intentional in design for all services and solutions. It is both wonderful and challenging.”
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Prioritizing Transformational Investments
Geoffrey Moore has suggested that organizations can put through only one transformation change at a time. So how do organizations prioritize what makes it and ensure it gets proper nurturing and attention?
Shumaker says, “a cross-functional team from IT and business should write up a proposal including options, costs and a recommendation. This should be reviewed and approved by the senior leadership team of the organization.”
McMahon goes a step further when he says, “Stakeholders should be involved that represent all areas of the business impacted by the change. Especially when there is sequencing to consider.”
This matters because transformation changes people’s lives. Several years ago, a CIO told me about a major transformation change. He said that everyone agreed with its importance but at the end of the day it would change someone’s life.
Davis says for big changes it should be “up to and including the CEO as appropriate. If it is that big then the leadership team needs to be fully behind it from the start.
Young believes that smart IT organizations, “array and prioritize the options, internal stakeholders and subject matter experts who can help with the sizing, benefits, pros/cons of various investments.” However, she said, “watch out for internal bias. External expertise and/or recently hired leaders and experts can provide a lot of value to ensure options are responsive to market, feasible, sized correctly, and so on.”
Assembling the Team
How should CIOs assemble the team to evaluate investment priorities? Young says they should start by “engaging the broader team once there are enough items to discuss constructively and critically. With this, they should time-box the evaluate priorities iterations though! Time-to-decision is important.”
Davis added, “This should be treated as a continuous process with the CEO, CFO and CIO, reviewing the portfolio of projects on a monthly basis and revising the roadmap based upon the latest requests. The portfolio of investments needs to be consistent, but open to change as business changes, having the key members of the leadership team on board to evaluate is critical.”
The team prioritized change should be outside IT. Shumaker says, “It cannot be IT led. At the minimum there needs to be a business co-sponsor who has an equal stake, and the CIO should not just drag them into this. While this seems obvious, I have made this mistake before.”
Francis concluded, “the process should be carefully and inclusively done.”
Parting Word on Ranking Priorities
Todays’ digital world requires more than involved stakeholders. Engaged partners power today’s digitally driven IT organizations. This includes the prioritization of investment for business impact.
Additionally, digitally driven IT organizations make use of prototyping and agile concepts to reduce the odds of failure. This means effective IT organizations are tied at the hip to their business counterparts.