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How to Fix IT Planning

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.

Improving IT Planning

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

CIO

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.

  • http://www.midwestitsurvival.com jfbauer

    This and the previous article provide some good points on a more business aligned IT focus. Approaching 20 years in IT, I struggle to grasp how a company, sans IT budget, can ever get traction on solving IT specific issues like platform upgrades, core renewals and bringing “spaghetti infrastructure” (http://bit.ly/6ibcnK) back into the architectural norm without an IT budget to do so? Maybe I haven’t worked for very strong organizations, but if the business has significant influence in IT priorities, how do they appreciate the need to invest in efforts that don’t directly align with their business goals and objectives? Are you suggesting baking those IT centric needs into business planning process? Example: “In order to get the next set of features from the product roadmap implemented we need to upgrade from .NET 2.0 to 3.5 with a cost of X man hours?” I may have missed a nuance of the approach, but my experience has told me business line management’s response to that IT centric dependency on their goal achievement is: “You are IT. Don’t you get paid to manage these technical issues so they don’t become a hindrance to my needs?”

  • http://www.midwestitsurvival.com jfbauer

    This and the previous article provide some good points on a more business aligned IT focus. Approaching 20 years in IT, I struggle to grasp how a company, sans IT budget, can ever get traction on solving IT specific issues like platform upgrades, core renewals and bringing “spaghetti infrastructure” (http://bit.ly/6ibcnK) back into the architectural norm without an IT budget to do so? Maybe I haven’t worked for very strong organizations, but if the business has significant influence in IT priorities, how do they appreciate the need to invest in efforts that don’t directly align with their business goals and objectives? Are you suggesting baking those IT centric needs into business planning process? Example: “In order to get the next set of features from the product roadmap implemented we need to upgrade from .NET 2.0 to 3.5 with a cost of X man hours?” I may have missed a nuance of the approach, but my experience has told me business line management’s response to that IT centric dependency on their goal achievement is: “You are IT. Don’t you get paid to manage these technical issues so they don’t become a hindrance to my needs?”

  • http://www.morethanpoints.com Henry Hwangbo

    “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.”

    This is exactly the direction companies should be moving. IT needs to be at the business planning table so discussion can take place with some understanding of business decision repercussions on the IT organization BEFORE anyone pulls the trigger.

    Once IT is at the table, the environment needs to be conducive to objective discussions with everyone taking responsibility, NOT deferring to the single IT representative at the table because the business folks “don’t know about IT stuff”.

    This means the IT folks need to learn more about the business and the business customers (the internal business is not your only customer) and be more directive as opposed to taking orders from the business and just “making it happen.”

    And the flip side is the business folks need to take a more vested interest in IT and truly understand the trade-offs to every decision and understand the cost from both a dollar and people perspective. No more deferring the tough IT decisions to the “IT guy” so business can be absolved of responsibilities if things go wrong during the delivery / implementation.

    Everyone is it in together.

  • http://www.morethanpoints.com Henry Hwangbo

    “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.”

    This is exactly the direction companies should be moving. IT needs to be at the business planning table so discussion can take place with some understanding of business decision repercussions on the IT organization BEFORE anyone pulls the trigger.

    Once IT is at the table, the environment needs to be conducive to objective discussions with everyone taking responsibility, NOT deferring to the single IT representative at the table because the business folks “don’t know about IT stuff”.

    This means the IT folks need to learn more about the business and the business customers (the internal business is not your only customer) and be more directive as opposed to taking orders from the business and just “making it happen.”

    And the flip side is the business folks need to take a more vested interest in IT and truly understand the trade-offs to every decision and understand the cost from both a dollar and people perspective. No more deferring the tough IT decisions to the “IT guy” so business can be absolved of responsibilities if things go wrong during the delivery / implementation.

    Everyone is it in together.

  • http://www.clearitleadership.com Patrick Flynn

    Great post. IT planning shouldn’t be viewed as a once-a-year event but rather like a soccer game. CIO’s should be constantly evaluating the flow of the game and position on the pitch to determine where to go next. Anticipation and teamwork are keys. The budget isn’t cast in concrete it’s a playbook (sorry for the slightly mixed sports analogies).

    Your prescription to be more directive with the business also applies to the last paragraph. CIOs need to be wiling to call BS when the business tries to toss them a “hospital pass”.

  • http://www.clearitleadership.com Patrick Flynn

    Great post. IT planning shouldn’t be viewed as a once-a-year event but rather like a soccer game. CIO’s should be constantly evaluating the flow of the game and position on the pitch to determine where to go next. Anticipation and teamwork are keys. The budget isn’t cast in concrete it’s a playbook (sorry for the slightly mixed sports analogies).

    Your prescription to be more directive with the business also applies to the last paragraph. CIOs need to be wiling to call BS when the business tries to toss them a “hospital pass”.

  • http://cioinnervoice.wordpress.com Fibol

    You made some Great point Chris, and our friend Mr Potts should see some interresting statements.
    I reckon that one of the key changing force (when relate to strategic planning) is the way corporation has grown in the past years (essentially by M&A) sometimes to the disadvantage of organic growth. It has tremendously impacted the strategic planning process and the frequent misalignement between enterprise vs business unit is a conscequence of it.
    Fibol

  • http://cioinnervoice.wordpress.com Fibol

    You made some Great point Chris, and our friend Mr Potts should see some interresting statements.
    I reckon that one of the key changing force (when relate to strategic planning) is the way corporation has grown in the past years (essentially by M&A) sometimes to the disadvantage of organic growth. It has tremendously impacted the strategic planning process and the frequent misalignement between enterprise vs business unit is a conscequence of it.
    Fibol

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  • http://www.sviokla.com john sviokal

    hey chris,

    i think this planning difficulty comes from the issue that IT is both a line & staff function. the line issues sit in the biz units — and should be cranked up or down with what value they can create. the administrative IT is something that should be spread about the firm.

    best,
    j

  • http://www.sviokla.com john sviokal

    hey chris,

    i think this planning difficulty comes from the issue that IT is both a line & staff function. the line issues sit in the biz units — and should be cranked up or down with what value they can create. the administrative IT is something that should be spread about the firm.

    best,
    j

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