How to Fix IT Planningpost by Chris Curran on December 17, 2009
In response to the last post on the sad state of IT planning, one commenter noted:
This planning is deeply flawed, even if you “fix” it as described. An effective organization is not a collection of competing interests, and IT is not a resource to be divvied up. Where is the organization’s overall strategy and goals in this scenario? How will organization-wide improvement occur when projects are isolated into departmental silos?
These are all good questions and I think hint at the underlying frustrations that business and IT leaders have in connecting and balancing short-term and longer term organizational investments within and across business units. In fact, my friend and progressive IT thinker Chris Potts said “that’s why there shouldn’t be an IT budget at all.”
Most large organizations got large through organic and/or M&A based growth, driven by entrepreneurial leaders who, by definition, have competing priorities. Very few companies I have worked with in 20+ years of consulting have struck a successful balance between enterprise level and business unit investment priorities, IT included. That is NOT to say that they are not successful companies, but that the individual business needs have driven the majority of investments, with ERP and BI investments as a few exceptions.
Eliminate Wasted Effort, Then Improve The Process
As the commenter pointed out, reducing the waste in IT planning doesn’t “fix” it, but it does begin to free up management time that can be better spent leading the work and building a better planning process that aligns and balanced business priorities. So, I look at improvements in 2 steps, reducing the waste and improving the process by driving it from and aligning it to the business.
The design of a better IT planning process is not a one-approach-fits-all proposition. Many factors are in play that will impact the approach and maybe more importantly, the interplay of the enterprise planning with the individual business unit and functional planning. Like it or not, all organizations do not drive operational planning and investments top-down into each unit.
I work with two different insurance companies of similar sizes ($10B+) and complexity. However, each has a significantly different model for setting strategy and prioritizing IT investments.
|Attribute||Firm 1||Firm 2|
|IT Organization Style||
Strong central CIO with direct reports who serve individual business units and functions
Central CIO with direct reports with dual reporting to LOB heads
|IT Budget Responsibility||
LOB Heads for Applications and CIO for Infrastructure and Enterprise Systems
|IT Planning Approach||
CIO-driven multi-year and annual planning
CIO-driven multi-year planning, LOB driven annual planning with CIO consolidation
Regardless of the organization style and culture, it is possible to vastly improve IT planning by driving it from the business. Many organizations I have worked with like the terminology “business capability” as the lynch pin to link a high level set of objectives to a more granular set of things a business needs to be able to do. I describe more about business capabilities in the post A CIO Can’t Do More With Less.
Maybe we will someday be in a place where there are no IT plans or IT budgets. But, in the meantime, we need to pay close attention to the time we waste trying to figure out what the business wants and instead, become part of the business planning process. Maybe IT’s engineering roots can help the business become more rigorous and repeatable in planning and together, create a better approach to multi-year and annual planning.