A closer look at strategy and planning for your organization.
Economic Lenses: Decrease Spend, Increase Value
It is often believed that more time spent planning means less time spent reacting and “putting out fires” – however – this assumes that you are planning for the right things. In this theme we will elaborate on developing effective two way communication, managing priorities, continuous improvement, and optimization to enable more effective planning between business and IT.
Pretend you are buying a car. You really want it to have silver paint, and you want a metallic effect. The dealer says: “No problem, I’ll give you a call when it’s ready.” A week later when you call to find out where your car is you realize that your special order means that it will take 6 – 8 weeks for delivery, whereas without the metallic paint, you could have driven your car off the lot. The problem is you didn’t understand how long it was going to take, if you did, you would have decided it wasn’t worth the wait, you need a car now.
This was the analogy given to us as an example of the misalignment between business and IT – often, even though both sides have come to the table, the communication is not effective and so the outcomes are often frustrating for both sides. The analogy broken down even further, highlights the key missteps by both parties in this communication:
- The order was placed without any discussion or explanation by the buyer as to “why” they wanted metallic. It wasn’t made clear to the dealer that it was a preference, not a critical requirement.
- The dealer did not communicate the “how” or “what” that needed to be done to fulfill the order. It wasn’t made clear to the buyer that it was going to take longer, the dealer just said “no problem” in an attempt to be accommodating.
Does this sound familiar to anything that has happened before in your organization?
When we started our panel interviews we only provided conversation starters about the different lenses around the “Economics of IT” – how do you spend less, recognize more value, avoid costs or increase revenue? In almost every interview the importance of business strategy and planning came up time and time again as the best overall approach to decreasing spend and increasing the value the business can derive from IT initiatives. As we explored the topic, we ended up having the same conversation multiple times:
Q: When it comes to technology and IT priorities how do our customers know they are planning for the right things?
A: Alignment of IT priorities to business strategies.
Q: How do they ensure business / IT alignment?
A: On-going, effective, two-way communication.
Do you agree? If yes, how would you grade your organization on your business and IT alignment? If it isn’t where it should be: read on.
If you are still reading you are likely not alone. Across our panel there was complete agreement that alignment between business and IT was the exception not the rule. It was hypothesized that this was due to business strategy and IT priorities being set completely independently; the business making technology decisions (with or without IT) not always understanding the implications, or the converse, IT making technology decisions without understanding the business priorities. But why? Why are so many business units special ordering “cars” and why is IT delivering them without asking the right questions or explaining the implications?
We believe it is because alignment only comes through effective, ongoing, two-way communication. And by on-going we mean it isn’t a one-time conversation, but an on-going discussion around continuous improvement and optimization. We know that for most organizations this is a muscle that needs to be developed and built over time, and when it does you can reap the benefits across every facet of the organization. Proper planning can also help some organizations avoid “taking cost cutting measures as a reactionary measure, without consideration for how they might compromise the long term strategy and growth of the business.”
“The general user population [within an organization] is a consumer of what IT operates, so we only call upon them when we have an IT problem. Heads of business units and individual users don’t typically come in thinking how they can be more strategic in their roles by using technology? That’s where the benefit of IT moves up in the value chain, when you start to think more about how technology can progress business strategies, and you can start to quantify the benefit of technology in terms of costs and outcomes.” -Michael Thomaschewski, Director of Infrastructure
So if you want to build this muscle what do you need to do? Start by making it an inclusive process. Bring everyone to the table early and add the necessary structure, even if that means bringing in someone from the outside. This means making sure your business strategy is aligned with the goals, objectives, and tactics of the business with clear budget and timeline parameters so that there are no surprises.
At Long View, we’ve looked at our 18 month roadmaps by business unit and re-ordered some of our priorities as an organization. We’ve looked at how many projects could still proceed without capital and looked at people, process and efficiency gains in how we operate our business. The money that is being invested is in the most strategic areas to the business, and with a narrowed focus, we are able to deliver these projects more efficiently and effectively. “It creates an opportunity for learning as people come to truly understand what is really critical vs what we’d like to have.” -James Bell, Director of Shared Services
One of our panelists expressed the critical importance for all departments – especially IT – to spend time in Quadrant Two, referring to the ‘Four Quadrants of Time Management’ by Stephen Covey in his book, The 7 Habits of Highly Effective People. “Companies who may be in a slow period for any reason including an economic downturn should take advantage. In slow times, if you come out as a well-oiled machine, you are better positioned to weather the next storm. If your environment is a well-oiled machine you aren’t running around fixing, you are focused on the strategic. If you are living in Quadrant 1 – emergency response, remediating failing systems, you’re not spending time in Quadrant 2 where you’re going to get that understanding of business strategies and how IT can help.” -Robin Bell, CTO
Things to Consider:
- How does your organization define strategy? What steps have you taken to make sure everyone involved understands what the plan is to go from A to Z in executing against that business strategy?
- How effective is your communication? How often are you frustrated at the beginning of a process/project because you didn’t understand the “why, what or how” of what the business needed and why or how IT was planning to deliver?