Easier said than done... Descriptions of current and future states, and of related transition plans and scenarios constantly need to be revised and amended, let alone fast changing business and regulatory constraints.
But that is not the only challenge that companies are facing in order to increase business value from IT strategy delivery: tightly interwoven layers building up the IT assets and systems, potential future acquisitions or outsourcing contracts and related changes, dependencies and functional overlaps, let alone cost cutting decisions, regularly unveil an entire maze scattered with reefs, turbulences and blasts.
Finally, now just looking at the bright side of things, there are so many new technology opportunities out there, that only being aware of them and mapping them with business needs can be a challenge in itself, particularly regarding the digital disruption. Does IT strategy delivery provide tangible and measurable business value?
In an article published February 26th 2014, Chip Gliedman, Vice President, Principal Analyst serving CIOs at Forrester, outlines that “The Age Of The Customer Knocks Planning Cycles Out Of Sync”. Chip outlines that “few organizations have adapted their internal planning and budgeting cycles, as well as the internal governance processes, to match the increased frequency of change found at the company-customer interface.” Is your company organized and ready to face these challenges?
Here are 3 “must-haves” to increase your chances of success when leveraging IT Portfolio Management as an integral part of IT strategy delivery, and eventually of IT Governance.
IT Assets Rationalization Decreases Uncontrolled IT Disorder
Business geographical expansion, merger and acquisition or increased market share invariably lead to growing the number of IT applications, technologies and infrastructure, in less and less controlled layers. Redundancy, under-utilization, artificial intricacy and dependencies, but also obsolescence, are classical threats when attempting to reduce IT landscape chaos. Rationalization – reduction of complexity – means reducing costs by strengthening and modernizing the IT Architecture, to make it more flexible and more easily welcomed changes. It “simply” requires an inventory of IT assets built upon forms or questionnaires relying on criteria that reflect expected outcomes, such as cost reduction, or business value.
IT Departments Must Partner with Business Lines to Better Control IT Expense
Today, product development, operations and even more importantly marketing departments take the lead to contract with cloud-based SaaS package or custom application providers. Business lines do so because they want to avoid delays and be responsive to business priorities. In doing so, they may increase the IT chaos, especially when they do it outside of the classical enterprise border and policies.
IT departments need to find ways to get back in the loop, to reduce operational costs so that a greater part of the IT budget is dedicated to business-relevant, innovative IT initiatives. In doing so, IT Portfolio Management initiatives are better assured to address strategic, mission-critical business priorities. This requires linking the IT assets inventory to the business lines and processes they support.
Continuous IT Portfolio Management for Stronger IT Governance
Complex companies are confronted with redundant, underused, costly or non-business supportive thousands of applications. In these organizations, CIOs and IT managers are overwhelmed with IT assets and dependency management. They are expected to rationalize portfolios of IT assets, (budget, performance and time-to-market) and to increase agility to better support the business. They cannot isolate IT from the business and optimize IT for the sake of IT only.
Establishing a continuous IT Portfolio Management practice that meets an ever changing business context requires to segment IT assets into diverse portfolios, and to address their changes in a pace-layered manner: starting with quick wins and progressively moving to bigger, more ambitious and harder to reach business benefits.
The 3 above “must-haves” are necessary conditions for success, but not sufficient. They strengthen IT Governance principles and hereby the whole Enterprise Governance process.