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The key to any successful IT planning exercise is the careful framing of the discussion. At its core, this process must focus on the enterprise and not on technology. It must provide ample opportunity to explore possibilities but must also remain credible from the perspectives of business operations, finance, technology management, and project execution. Building castles in the air may excite the audience — only to provide frustration later, when visions of the future are scrutinized through the harsh lens of real-world fiscal and technical constraints. It therefore behooves IT leadership to script planning events with care, always framing them within a context that is familiar and comfortable to the organization's business leadership.
To this end, I like to begin any planning exercise with a set of questions that requires the planning team to focus on key issues and the right context for conversation.  This script might include such questions as the following:
What is our mission as an enterprise?
What are the barriers to that mission's realization?
Who are our customers now and how will (or should) this change in relation to our mission? What are these customers looking to us for now? What will they look for in the future?
What are the top goals and objectives of the enterprise as a whole? Of each key business unit? Of the board(s) of governance? Of the executive management team?
If these goals and objectives draw the enterprise in opposite directions, how can they be reconciled?
What other barriers stand in the way of realizing these goals and objectives?
What are our competitors doing? Should we be concerned?
What other forces, such as the regulatory environment, are at play? How will changes in these forces affect our business and our plans?
How might IT enable the realization of these goals and objectives? Assist in taking down barriers to the success of the enterprise? Afford new opportunities to the business?
These are open-ended questions meant to stimulate thought and discussion. To the extent possible, avoid an overt discussion of technology. Too often business colleagues will more willingly discuss the latest in IT trends and gadgets than deal with the real, tough, complex, and messy process and performance issues that confront their own operating units. This initial conversation needs to be exploratory, and though open to all possibilities, balanced by the realities of where the enterprise finds itself in its marketplace. To stimulate and facilitate these deliberations, a version of the Osborne/Kesner transformation diamond is helpful. See Exhibit 1.
Exhibit 1: The Osborne/Kesner Enterprise Transformation Forces Diamond Revisited
In this version of the framework, some of the diamond's corners have changed. The enterprise sits in the middle of the drawing and is acted upon by four countervailing forces:
Internal processes of business change and inertia
IT innovation and change
Existing IT systems
Business process evolution
All of these activities (actions and reactions) float within an external business environment that in turns acts upon, shapes, and limits the forces at play within the enterprise. The transformation diamond helps discussants keep in mind the factors to be considered in identifying IT investment opportunities.
First and foremost, the planning team needs to understand the challenges faced by the enterprise and its constituent parts, hence the positioning of the enterprise at the center of the model and of the market place as a backdrop surrounding everything else. The aforementioned list of questions or something similar will draw out this context nicely. Next, ask what needs to change in the business to accommodate or address these dynamics. All too often, the business leaders assume that the introduction of a revolutionary technology will fix what is ailing or challenging the corporation. But technology can only enable sound business processes and practices. Thus, if the management team is looking to change, it must first grapple with the business process innovation corner of the framework.
Having established some sense of where the organization is headed with its process transformations, leadership must then ask itself these questions:
What are the barriers within the various lines of business to such changes? For example, is the enterprise's culture adaptable?
Do employees have the right skills?
Are corporate rewards and recognitions aligned with the envisioned ways of doing business?
In a work environment of well entrenched business practices governed by labor contracts and the like, moving the enterprise to a new way of delivering goods and services may prove extremely difficult, regardless of the information technologies at hand. Taking the planning team through the discussion to this point exposes many of the critical challenges to be overcome in selecting and deploying business-enabling technologies. Note that the discussion has yet to touch upon the subject of information technology itself.
With all of this foundation building, IT leadership may now join the conversation with suggestions about how recent developments in information technology may assist in addressing the emerging needs of the enterprise. Here, timing is crucial. By ordering the conversation as described, even at this early stage in the planning process the IT team has aligned its view of technological innovation with enterprise business drivers, issues, and priorities. Be aware that your business colleagues will hear what they want to hear during these brainstorming discussions. If you imply that a particular technology may be available to address the need, they will understand you to say that it can be had immediately. Possible but highly challenging IT solutions may be received quite differently by those without technical experience. Avoid the hard sell and hype. Be realistic, identifying both the benefits and pitfalls of the various IT strategies under consideration.
Although this sort of exploration is vital to the development of aligned business and IT planning, your enterprise's management team may not feel well enough informed about the state of corporate IT investments to have such a conversation. Managers may need a broad overview of where things stand within their departments concerning IT products and services currently in place or on the way. Thus, to inform and stimulate the planning process, the IT team may need to do some additional spade work. A simple inventory tool can categorize the current state of IT investments in terms of sponsorship.  Most projects are easily categorized as enterprise, associated with a particular line of business, or infrastructure (i.e., IT-driven).
This inventory tool should be organized in a meaningful way to reflect the larger enterprise and the nature of IT spending. For example, if the lines of business drive IT projects, the left column of the inventory worksheet should list each line of business and then the primary services (i.e., business processes) operating within each unit. Thus, the finance division might include general accounting, accounts receivable, accounts payable, budgeting, fixed asset management, and so forth. Alternatively, where processes are highly redundant from business unit to business unit, you might organize your inventory by functions, like customer relationship management, product design, and manufacturing, listing the business units that employ those processes underneath. The inventory next captures the following information:
Envisioned or proposed priority status of IT work to be done for this business unit or on behalf of this business process (with coding such as P=priority level; D=done; H=high, address immediately; M=medium, address in 2xxx; L=low, address in 2xxy). The list may include prior commitments and proposed commitments. Let your customers guide you in setting the dates initially; the management review process will firm them up for incorporation in IT plans.
Business process is documented (yes/no) — essential information if the enterprise intends to replace legacy systems or in any other way alter the process in conjunction with the introduction of new information technologies.
Business process has forms (yes/no) — these forms will be evidentiary to the process and may be replaced or superannuated by the introduction of IT systems.
Current IT system(s), in place or planned as the case may be.
IT system or service owner — one business unit may own the system while many units use it.
Comment field for the status of work completed, under way, pending, or proposed. Color-coding entries of special interest makes them stand out during the management review process.
Given its comprehensive perspective of current and upcoming IT organization commitments, the PMO is well situated to prepare this document for IT management's use. The value of this exercise is multiple. First and foremost, it provides a current, top-of-the-trees view of all IT work under way or planned. It serves as a summary portfolio description of the IT organization's commitments. Second, with this picture in hand, management can more easily see where investment dollars are going. Such information naturally leads to a debate over alignment, balance, resource allocations, and enterprise priorities.
Third, it opens the door for a discussion of IT value in terms that relate nicely to our internal economy model. If the inventory makes clear that all immediate IT resources are committed, any further investments must come from a realignment of resources or from the augmentation of IT funding. Do not expect your business colleagues to open their wallets. More realistically, they will work with you to reduce current spending to reallocate resources to projects of higher priority.  Lastly, the inventory approach forces management to recognize, if it has not already done so, the centrality of information technology to its business and the role that the enterprise's various lines of business must play in setting and supporting the direction of IT investing.
To round out this exploratory exchange of views, the management team should examine the implications of particular IT options to the enterprise. Just as there are established business practices to overcome if the organization is to change, new technology investments must be viewed within the context of existing enterprise IT capabilities. For example, if the option on the table requires the business to replace its network infrastructure, its server complex, or its legacy software code, what is the true TCO of such a decision? Does the IT team itself know enough to appreciate the implications (i.e., the ripple effects) of such a change? Are enterprise personnel sufficiently skilled to operate and maintain these new technologies? What are the human resource implications of the envisioned technological changes for the IT organization? Will IT need to retrain or restaff?
In other words, when looking at new IT investments, your organization must also consider its past investments and the embedded base of its IT infrastructure. Just as there are no business decisions in a vacuum, there are no neutral IT options. Each will have its pros and cons in terms of how it maps against the needs of the business and its fit within the existing complex of the organization's IT offerings and capabilities.
The transformation diamond affords a framework for drawing out these variables and demonstrating some of the more obvious connections between the workings of the enterprise at large and a business process change or an IT investment decision. However, the diamond does not in and of itself force the discussion to the level of detail required to determine the TCO of any particular IT investment option. To that end, I offer another simple tool to focus and discipline these more detailed discussions. If a particular IT undertaking clears the first hurdle and makes it to the wish list, turn next to this tool to gather the data required for the IT prioritization process. Here too, the PMO's project managers and business analysts can conduct the requisite information gathering and preparatory analysis in anticipation of a more detailed review process.
This data may be collected for analytical purposes in some vehicle like the Information Technology Project Request form.  This document facilitates the capture of the following pertinent information about any proposed IT venture:
Names of all working clients
Total funding request by fiscal year (to be derived from subsequent work sheets)
Chronological list of envisioned project milestones
Project cost table laid out by quarter, internal staffing head counts and costs, vendor costs, hardware and software costs, and any other project related expenses
Another table that defines project roles and responsibilities and the head count associated with each project role
Questions and a table for ROI and benefits calculations
Strategic alignment checklist
Risk management checklist
The request questionnaire asks tough questions and, when completed in full, provides all the fodder for something like the Murphy ranking process described later in this chapter. The rigor required in the request questionnaire will help thin the list of fanciful project ideas and proposals that offer only a marginal impact on the core business and the enterprise's strategic objectives. The form and its associated process can help take a lot of the politics out of priority discussions. If the value to the organization is below an agreed-upon ROI hurdle rate, even the sponsor of that idea should agree to its being dropped from further consideration in favor of more promising options.
However, the important contribution of this process is that it gets the issues out on the table, with their complexity, risks, and costs exposed for scrutiny. Certainly, any presentation of risks, costs, and ROI will be scrutinized by those with competing requests. The justification tool levels the playing field, requiring each sponsor to develop credible data in support of his or her proposal. If all goes well, your team will use this process, or something like it, to come up with a reasonable list of potential opportunities. The pool of ideas so generated will probably range from obvious and necessary investment decisions to large, optimistic ventures. The next step will be to work with management colleagues and the IT team to define and narrow this list of options. Ideally, you will end up with a tally of prioritized action items commensurate with available organizational resources and hence ready for the review and approval of your enterprise's governance process. 
Bear in mind that what you have in hand is a wish list. The request questionnaire provides estimates and the rationale for individual investments — not prioritized choices from the investment pool as a whole. Pursuing the suggestions on that list without vetting them further will put your own team and the enterprise at risk. Once your colleagues understand more fully what it will take to achieve the deliverables that emerged from your brainstorming exercises, they will be in a position to appreciate the TCO of any particular choice and to make the necessary tradeoffs or scope revisions among the options. 
It is essential that the business leadership — not IT — makes any final choices. To that end, the leadership of the IT team must ensure that line-of-business colleagues have the information in hand to make informed decisions without dwelling too heavily on the more technical side of the question. In other words, to proceed with any sort of reasonable prioritization process, management requires a clear understanding of the business opportunity afforded by each technology investment on the wish list, as well as the associated risks of proceeding with that undertaking. The next section of this chapter explores how to position the discussion for priority, how to build consensus around a short list, and how to ensure that your line-of-business colleagues buy into the final decision.
The players in a particular enterprise's business and IT planning exercise vary from one organization to the next. In general, the team should include the chief executive officer or president; the chief financial officer; the responsible executives from each line of business; the chief information officer; and any other planning, operations, and IT personnel (e.g., IT CREs) with germane expertise or a significant stake in the discussion. In larger enterprises, these working sessions may occur between the executive leadership of a particular line of business and representatives of the IT organization. The director of the PMO, and perhaps members of his or her team, will provide facilitation and staff support for these activities.
See The Hands-On Project Office at http://www.crcpress.com/e_products/downloads/download.asp?cat_no=AU1991, chpt3~1~IT~inventory~example for an illustrated application of the tool. See chpt3~2~IT~inventory~template for a blank template that can be adapted to the needs of the reader's organization.
The Hands-On Project Office, at http://www.crcpress.com/e_products/downloads/download.asp?cat_no=AU1991, includes a tally sheet for tracking the prioritization and reprioritization of IT projects. See chpt3~3~priority worksheet~template.
See The Hands-On Project Office, http://www.crcpress.com/e_products/downloads/download.asp?cat_no=AU1991, chpt3~4~IT Project Justification~template. For a hardcopy version of this tool see Appendix A.
As part of an annualized planning and budgeting cycle, each organization will have its own approval process. Perhaps the same line-of-business partners engaged in this brainstorming exercise are in a position to approve and fund the final short list of projects. Alternatively, the list may have to go through some sort of executive review, even a board of directors' review. Before launching any planning and alignment discussions, be well versed in how these processes work within your own organization.
Remember that any major investment in an IT platform or system may have serious ripple effects throughout the current IT complex. For example, it might require an upgrade to the organization's server or desktop platforms or the retraining of IT personnel. It also might require the renegotiation of existing software licensing agreements, a significant increase in maintenance and support overhead, and so forth. For these reasons, the business side of the house must be briefed on the TCO of any major IT venture before it commits. Also bear in mind that your TCO calculations must go well beyond first-time costs. They must include ongoing support and maintenance costs for the solution, as well.
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