How many times have we discussed multi-year IT projects that not only have exceeded their time estimate and are over budget, but they also fail to deliver the benefits promised to the user community.
The ISACA 2012 Governance of Enterprise IT (GEIT) Survey, March 2012, confirmed that issues with projects delivering on their promises continue. According to the survey, enterprises continue to experience project overruns (48%), 41% experienced a high cost of IT with a low or unknown return on investment and 38% said there was a disconnect between business and IT strategies. These results confirmed that the traditional cadence of long running, multi-year projects is not meeting business demands. It is clear we are not satisfying the business, and the processes we are using, although well proven in the past, continue to fall short.
As a first response many of us have moved to an agile approach where we deliver on projects with a more rapid cadence, leverage consumer input and deliver value to the consumer on a more regular basis allowing the end product to morph over time based on feedback. That approach appears to cover many of the challenges we have, but this is no panacea.
You will always hear the arguments of waterfall versus agile. I don’t want to get in the middle of an argument as both methodologies have their place and the simple answer is “it depends,” but the changing delivery cycle of an IT-enabled business means that your delivery of capability is rapidly changing. Let me explain.
We all know mobility is on the rise. How many of you don’t have a Tablet or a Smartphone? How often are you notified that your APPS are updating weekly or monthly? Have you seen how easy it is to provide feedback to the developer for additional capability or even a bugfix? A few clicks and it’s done! More than ever we are moving to type of customer-centered development, yet this can suck all your resources into development of services that don’t meet the corporate mission if not aligned to the business objectives. We need to ensure our development is correctly focused on achieving the mission of the business, which mandates understanding by those empowered to execute. This requires effective communication of the corporate mission to all levels in the organization and effective management with continuous monitoring of all the changing dynamics to ensure we are moving together toward an ever-changing goal.
We must be engaged in delivering constant and consistent bite-sized pieces of value and communicate it in terms of the business objectives. In short, we must effectively execute “the business of IT.”
Executing the Business of IT requires:
IT portfolio analysis
Optimization of investment decisions to balance cost, value and risk are essential IT planning functions and can only be achieved with an aggregated and correlated view across infrastructure, asset, project and application portfolios enabled by effective executive reporting and analysis capabilities. These need to be able to be adjusted in real time based on the changing dynamics of the business environment to support the risks and outcomes and value realization of decisions.
IT financial transparency
Transparency for delivering each IT service, including a detailed understanding of unit costs and cost drivers, allow for better cost-based decisions. These costs can be sent back to the business which helps to demonstrate the value to the business. Understanding the ratio of cost to value will allow the business to make informed decisions in good times and bad, and help ensure that the business is accountable for consumption.
IT performance management
IT is transitioning to becoming the service provider to its business partners and therefore must measure its performance against its contractual obligations, IT metrics, KPI’s and benchmarks. IT performance management provides the ability to better articulate the value of IT in business terms and understand service performance from the top down.
You may think that moving your IT construct from its current state to the Business of IT is a significant cultural or organizational shift, but I can assure you that many forward-thinking organizations have already begun the transition. Have you?
As always I welcome your thoughts!
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