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Setting IT Priorities

Setting IT Priorities

By: Wes Melling

Hot Issue:  How should we assess and prioritize our IT project portfolio?

SmartSummary

·          Recognize that IT project priorities are primarily business decisions, part of the implementation of the corporate strategy.

SmartAdvice

The IT Priority Players – There are three key players in the IT priority-setting process:

1.       The CEO – It is critical that you understand the role the CEO has played heretofore, and the role he/she would prefer going forward.  Dispensing IT priority has often been part of a CEO’s power mechanism.  Tread carefully.  Look at the business strategy-setting process.  If the CEO permits an open debate in strategy-setting, with decisions driven by data and decision rules, you can propose a similar approach to IT priorities.  If the CEO dictates strategy, anticipate dictation for IT priorities.  Then talk to the CEO privately. 

2.       The Executive Committee – These will be the participants in the debate if you are able to build an open process for priority setting.  These are also the managers who will have to support application installation, whether or not they got to pick priorities.  And sometimes these people will have to wait their turn.

3.       The IT Staff – The IT staff should not be setting the priorities, but should provide cost, schedule and technical viability input for the process.

Principles for IT Priority Setting

Whether the priority-setting process is a one-on-one with the CEO, or a structured open process, there are some principles you can push for:

1.       Every project considered should have a written evaluation of its fit with corporate strategy.

2.       Every project considered should have a written project cost estimate, a schedule estimate, and a business impact estimate.

3.       Business impact does not always mean cost reduction.  Value as perceived by the customer outweighs administrative cost reduction in today’s business environment.  (As an example, if your company were a book distributor, your priority 15 years ago might have been to reduce IT and administrative cost per sales order line from $.25 to $.10.  Today the priority might be at least as good a web site and order fulfillment as Amazon.)  Reducing time in key functions (sourcing, engineering, distribution, service response) can have a greater impact on operating profit that expense reduction.

4.       Technology offers new ways of doing business.  Such opportunities should be favored for high priority.

5.       If you are disciplined about it, there are ways to have more than one “highest priority”.  You can install an unmodified application package.  You can outsource an application completely.  Finally, you can parse applications into bite-sized phases, and work on “bites” for multiple user organizations rather than on one elephant for one organization.  (If you’re lucky, you will find applications where half the benefit comes with the first bite.)

6.       IT priorities should be reviewed quarterly.

Project Monitoring

It is critical for IT to provide project monitoring that is accessible to users.  Users awaiting a high priority project know they’re getting what they asked for and can plan when they’ll be impacted.  Organizations that are waiting will have more patience if they believe that “when my turn comes, I’ll be taken care of.” 

TAC SmartGrid

Alignment

Align IT priorities with business strategy.

Value

Favor projects with customer-perceivable value.

Organization

Try to involve the Executive Committee, but recognize your CEO’s style.

Technology

Technology can support new ways to do business.

SmartActions

Use a priority process that fits your corporate decision style.

Publish progress against published priorities.

Related Links

Managing the Project Portfolio

Stan Davis, Christopher Meyer, Blur, John Wiley & Sons, 1999. 

Stan Davis, Ellie McCarthy, Future Perfect, Perseus Publishing, 1996.

QuickMBA: The Strategic Planning Process

enTarga: Strategic Planning

Birnbaum Associates: Reinventing the Strategic Planning Process

360vu: Strategic Planning

About the Author

 

Wes Melling, TAC Expert, has over 40 years of IT experience with a focus on enterprise IT strategies.  Wes is founder and principal of Value Chain Advisors, a consulting boutique specializing in manufacturing supply chain optimization.  He has been a corporate CIO, a Gartner analyst, and a product strategist at increasingly senior levels.  He has held P&L responsibility for a $2B systems business unit.  Wes’ specific areas of expertise include the burgeoning arena of supply chain event management, IT product strategies, strategic messaging and end game management.




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