Setting IT Priorities
Setting IT Priorities
By: Wes Melling
Hot Issue: How
should we assess and prioritize our IT project portfolio?
Recognize that IT project priorities are
primarily business decisions, part of the implementation of the corporate
The IT Priority Players – There are three key players in
the IT priority-setting process:
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.
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.
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:
project considered should have a written evaluation of its fit with corporate
project considered should have a written project cost estimate, a schedule
estimate, and a business impact estimate.
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.
offers new ways of doing business. Such
opportunities should be favored for high priority.
you are disciplined about it, there are ways to have more than one “highest
priority”. You can install an unmodified
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.)
priorities should be reviewed quarterly.
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.”
Align IT priorities with business strategy.
Favor projects with customer-perceivable value.
Try to involve the Executive Committee, but recognize your
Technology can support new ways to do business.
Use a priority process that fits your corporate decision style.
Publish progress against published priorities.
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
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