Ask any business client of IT in larger organizations: “How would you rate your IT department?” and you will likely be met with a variety of criticisms such as:
- They can’t deliver anything to us anymore.
- I can’t get anything done.
- Getting information is difficult.
- The Help Desk is useless.
- Timelines are always slipping.
- Resources are never available to work on my projects.
- I used to be able to get things done, but now there is so much bureaucracy behind project approval that I don’t even try.
While these are probably valid situational criticisms, the true story is likely less bleak. The past few years have seen a shift in large and mid-size organizations as it relates to the accessibility of IT staff and programmers. Some of this is due to increased risk mitigation and government regulation (i.e., Sarbanes-Oxley) and some of it is due to the closer alignment of IT resources to corporate strategy. Regardless, IT resources are no longer available to the business users in an ad-hoc fashion and they cannot make changes as readily as they may have been able to in the past. In addition, direct communication between the business and programming staff is often being cutoff by liaison organizations whose function is to mitigate risk and effectively and efficiently plan IT spend.
So what does this mean to the traditional business user? Likely, it means that there is a lack of visibility to what their organization’s IT department is actually working on and delivering. It is not as if there are 100’s of people in an Enterprise’s IT department who are off on some techno-geek scavenger hunt, playing network Doom, or otherwise wasting millions of dollars a year. It is that these resources are working on projects that have true meaning to the organization as a whole rather than making incremental adjustments to a report here or some screen change there. Likely, these resources have better line of sight between their projects and the organizations strategy than they have ever had before, are working on projects that reach customers or suppliers on a broader basis, or are helping set the organization up for future success.
The business and IT are likely communicating and planning these efforts using some sort of portfolio planning process; whether that’s system driven or a series of spreadsheets and PowerPoint presentations. These efforts often look at 1-3-5 year cycles and plan strategic IT investment accordingly. They look at the resources each project takes, assign them, and get to work. Sometimes, these projects are multi-year initiatives and sometimes they are quick hit three or six month projects. Regardless, EVP’s and SVP’s are in-tune to what’s going on, what they should expect to deliver, and have a short-list of 20 or 40 projects that they are monitoring.
However, there is another list. A list of improvements that VP’s, Directors, and Managers need completed. This list is smaller projects which may be efforts similar to:
- A new report that shows me customer shipments in different ways
- A new feed between transactional systems and the data warehouse that ensures that our financial reports are in synch regardless of the source from which they are pulled
- A new screen that presents information differently and avoids the need to run 3 reports, download to Excel or Access, and manipulate to get information in the desired format
- A new way to present pick lists that sends warehouse workers through the facility in more efficient ways
- Etc….
These projects come about because they are true efficiency improvements and they are likely tied to an objective that has been set by someone in the mid- to upper-management of the organization which is tied to that person’s bonus. The Manager may have committed to their Director that they will cut headcount in their department by 10% this year, or that growth in warehouse throughput can be achieved without additional headcount, or that integrity of financial transactions can be ensured through additional automation. With the integration of systems into processes in today’s environment, very rarely can objectives like this be met without some sort of system change or enhancement. Yet, because the planning efforts at the Executive level are the priority, get the resources, the capital dollars, and the project management; the other efforts simply get added to the list, never get resources (or constantly get their resources pulled to work on other efforts), and keep getting ignored.
So what’s the solution? There is no easy solution to this effort, but I believe that organizations need to continue productivity improvements to existing systems while larger, strategic efforts are underway. The only way to ensure that this occurs is to dedicate budget and staff to these efforts during the annual Business/IT planning process. Using some historical measures (which may be available from the organization’s PPM tool or process), figure out how much spend has traditionally been allocated to the “productivity” side of the portfolio, carve that out, and set it loose. Assign resources to the efforts, setup a prioritization process directly been the business and IT managers, and evaluate it on a quarterly basis. A sample process for these enhancements may look something like this:
- It is determined that 15% of annual IT spend is on incremental enhancements to existing systems or smaller projects
- That 15% is analyzed by functional area/system. Resources should be assigned, dedicated, and named at this point (e.g., 75% of Fred Smith’s available hours will be dedicated to the Corporate Finance organization)
- The Business manager and IT manager should pre-meet to review prioritization procedures (e.g., customer request are highest, operational efficiency is second, information security is third, system issues should go to the help desk, etc…)
- Bi-weekly meetings should occur to review the status of the enhancements in process, the next ones due-up, and any new requests that have come in since the last meeting. An important point to consider is the no-going-back position of these enhancements. For example, in a process like this that I worked with, we stated that once a task entered the development phase, it could not be stopped.
- Spend-to-date should be analyzed quarterly to ensure that the resource assignment are appropriate and these should be adjusted as necessary, in either direction.
The financial treatment of this spend is something that does introduce complexity. Depending on the percentage allocated, organizations may decide that treating this as an expense is appropriate as it allows work to continue without the potential barrier that the capital appropriation process may introduce. However, larger spend may be something that organizations want to capitalize as budget pressures around keeping expenses in line are likely present. If so, it may be appropriate to consider quarterly capital approvals in line with the spend allocated in the budgeting process.
If this process is implemented with the appropriate amount of rigor, it can and should improve the internal customer satisfaction with the IT department. It will allow Managers and Directors to achieve their objectives while still giving the organization the attention it needs on the strategic initiatives that are underway thereby increasing stakeholder value for the organization.
