How many times has IT management staff felt that their business partners don’t appreciate or understand the effort, time and money required to satisfy a business demand? On the other hand, how many times do you think business partners wonder if IT is focusing on the correct enterprise initiatives, or why their requests are not satisfied to their expectation level? The answer? Too many times to count on both hands. Without transparency, the worst fears of both sides and all stakeholders become a reality.

Webster defines Transparency as “the quality that makes something obvious or easy to understand.” At TransAccel, we view Transparency as a prerequisite for making better supply and demand decisions that are based on cutting the right costs in the right way, while maintaining what is most valuable to the organization. With transparency, the IT organization can participate in valuable discussions that balance costs with IT benefits.

Transparency should exist across all sectors of IT – but especially crucial are:

• Portfolio management
• IT budgeting, performance management, chargebacks and cost allocations
• Measurement and benchmarking
• Investment planning
• IT service portfolios and catalogs

Poor Transparency exists when the value and tradeoffs associated with IT spending are not quantitatively discussed within the larger context of business strategy and goals. Typical results of this information disconnect are inaccurate budget forecasting, inefficient investment planning, and the wrong projects draining away resources, to name a few. Another consequence? Prior optimization goals are often repeated or even increased in following years.

Benefits of Transparency include better demand and supply management, budget forecasting, investment planning, increased governance, respect from business partners, identification of business-valued initiatives, and the elimination of non-core and non-differentiating resource-sapping projects.

The goal is to run IT like a business. TransAccel would be happy to assist your organization with aligning IT services and activities to business goals, and mapping those services to interdependencies and resource requirements.

As organizations strive to achieve leaner and more cost effective IT departments, Transparency is one of four basic cost optimization principles that will allow you to drop additional coins into your piggy bank.

If you haven’t already guessed it, the animator was Walt Disney and the film was Snow White and the Seven Dwarfs. It earned over $7 million in its first run, paving the way for Walt Disney Company to deliver other astonishing firsts.

In terms of project success measures, the project was abysmal. Disney blew the schedule, budget and scope, but for understandable reasons:

• No metrics: Since a feature-length cartoon had never been made before, there was no historical data to rely upon.
• Little understanding of risks: Without data, risks could only be guessed at based on the experience of past successes and failures making shorts, not full-length features.
• High margin of error in the estimate: With such a lack of empirical data, it was easy to miscalculate the time and budget required for the effort.

Nevertheless, in terms of sponsorship, the project was wildly successful. Here’s why:

• Clear vision: Disney knew what he wanted, unwaveringly stayed the course, and worked hard to achieve his vision.
• Understanding of the customer: He knew what his customers liked and set out to expand his brand to appeal to adults as well as children.
• Decision-making ability: Without a board of directors to rely on, it came down to Disney to make the hard decisions vis-à-vis the risks and reward of the project.

This imbalance of strong sponsorship on the one hand, and an insufficient project management process on the other, is fairly common for companies at the 1.2 to 1.7 maturity level. This is a people-centric model centered on passionate individuals, but it doesn’t scale when four or five projects are being pursued in tandem. Assuming everyone at a company doesn’t have the passion or vision to drive his project à la Mr. Disney, it becomes essential to install and implement process, which moves you closer  to crossing over the level 2 maturity hurdle.

Disney did just that. Over time, he learned from his project management mistakes, leveraged this learning to build a repeatable process, and further developed his visionary sponsorship to give his customers something new and extraordinary time and time again.  For Walt Disney, it wasn’t all just wishing on a star—he is one of the greatest American innovators because of his mastery of realization.

If you’ve worked on a project with a visionary sponsor but poor project management (or vice versa), tell us your tale.

1. Understand and communicate the business case for your project.
   This starts with understanding the business strategy and business drivers that prompted your project in the first place. If you don’t understand what the business is trying to accomplish, you have very little chance of your project hitting the mark.Once the business strategy and drivers are clear, identify very specifically—and quantitatively where possible—exactly how your project will provide benefit relative to the business drivers and business strategy.
   • Work with key people in the business area to develop and review the business case to ensure that it is sound and strong.

   Creating a solid, strong business case is the most important factor in not only getting the project approved, but also in ensuring that the project team clearly understands what is to be accomplished, why, and how it will help the business.

2. Identify resourcing needs by role.
   Resources, especially people, are always in high demand, and you need to be very clear about the resources that your project will require (people, facilities, equipment, etc.). Clearly identify your resource needs by being specific. Assuming that your request for two technical analysts you will get you what you actually need might be a mistake. Having the right skills, expertise and individuals detailed on a project can greatly improve the probability of project success.
3. Identify project interdependencies.
   As a good project manager, I expect that you will have identified dependencies within your project as part of your project schedule. With the complex business environment that exists today, you also need to identify dependencies that are outside of your project to make sure that external factors do not inhibit your project’s ability to succeed. For example, if your project requires customer master data to be available—and that is a key deliverable from a different project—you have to identify that interdependency and evaluate the risk to your project if that deliverable does not occur as planned. This allows both projects to understand the dependency and provides greater visibility and increased opportunity to manage and mitigate the risk. The Project Management Office (PMO) will know your project is likely to be well managed when they see the project interdependencies identified.

Additionally, all projects will require identification of project costs, timetables, risks, etc., as is normally requested by governance committees. The above points are not extensive, but are meant to help you differentiate your project from other projects being evaluated.

If you go to the governance committee with these items ready for review, you will not only put yourself in the best position for project approval, but you may also become the model for how other projects should be packaged for governance review.

– See more at: http://www.transaccelgroup.com/blog/2011/10/17/mark-that-project-approved/#sthash.miOosk0N.dpuf

Unfortunately, October is also a time of enormous pressure, as both IT and the Business push hard to achieve MBO deliverables before the end of the year. Too often, the competing time constraints of completing existing projects while planning new ones causes Business to default on the planning side, leaving IT to design new projects on its own. This lack of input from Business leads to “silo” thinking: “We know what they [the Business] really want or need.”

Now, in a perfect world, Business would remain engaged with the IT Account Manager—the one who not only has the best vantage point from which to understand and articulate Business’s needs, but is also well-equipped to offer ideas and solutions to address those needs holistically (end-to-end) rather than piecemeal. But, if Business opts out and IT can’t get it back to the table, or IT believes it actually can do the planning on its own, the next step needs to be the creation of a business case, or multiple business cases, depending on the number of initiatives IT believes are necessary for the coming year. In this situation, the account management teams should lead the business case process.

What Your Business Case(s) Should Focus On:

• Quantitative business benefits: ROI that can be tracked, and the forecasted payback over the next 12 or 18 months
• Risk assessment: what is probability of success when the following variables are considered: processes needed, organizational and infrastructure requirements, bandwith capacity, timing, information and skills necessary, competing business initiatives or conflicts, etc.
• Funding: Project costs (both operating expenses and capital expenditures) for all phases of the project; these costs should also include transition and post go-live support.
• Business alignment: clear alignment with business drivers, strategies, and objectives, taking into consideration the impact of the timing of each implementation event.
• Total cost of ownership (TCO): over lifecycle of project (ideally, this includes ALL costs associated on both the IT and the Business sides).
• Sponsorship: The name of the person or organization with “skin in the game,” who will help obtain project funding or resources, advocate for the project, etc. In short, someone who has a vested interest in the successful outcome of the project.

Once you have thoroughly assessed the viability of the project, your business case is ready to be presented to the Business. If both IT and the Business are in agreement, the commitment then is to investing in the funding, people, and amount of time necessary to undertake the project.

During the business case assessment process, be sure someone on the account side works with the service delivery partners to develop an overall review of the current operations. This will help you understand what capacity is available (people, technology, funding), or conversely, what capacity is already committed and unavailable.

This capacity review really shines a light on the 60-80% of the “operational support” work that comprises the bottom segment of your typical IT Portfolio Pyramid—work some refer to as “keeping the lights on.” At most companies, operational support is a made up of three things:

1. Service Level Agreements: Services and capabilities are aligned to fulfillment of SLAs, i.e., mutually defined agreements between IT and Business. Costs associated with each transaction and response/resolution times are tracked and monitored. These agreements are critical for the IT Account Director or IT Relationship Manager to represent the total cost of service to their Business partner. In a chargeback world, fees for these services are crucial to those IT departments operating solely as cost centers, providing, as they do, the funding for new projects. This is the only operational support activity in which you should invest.
2. Phase 2 & 3 Hiding Place: This is project work or “stuff” that didn’t really get done after the implementation of phase 1, can’t operate as a stand-alone, and thus is very hard to justify on its own merits. Ergo, it is categorized as operational support.
3. Unnecessary demand stuff: This is the “stuff” that should have been decommissioned years ago, but no one has the resources (funding/man-hours) to invest in getting rid of it and tossing it out of the environment. (Picture that box of moldy college textbooks you’ve been lugging around for years.)This “waste” is what I refer to as the “slow death of IT,” and it is my number one place to begin to restore capacity. In ridding IT of this old baggage, you will create the capacity that IT desperately needs for delivering on current Business needs. I have studied this dilemma for years, and many companies have tried to address it by taxing new projects or building it into the (TCO), but, like “training,” getting rid of it never seems to be the necessity it is, and it always seems to get cut.

Every dollar spent needs to be viewed as an investment. “Keeping the lights on” consumes a majority of IT’s budget, and yet, undergoes the least amount of scrutiny during planning. Why? Because:

1. It’s hard. If you haven’t done a good job of writing cogent SLAs with your Business partners or been diligent about tracking costs, unraveling the mess will take time and effort.
2. No one gets a bonus or a promotion for cleaning up someone else’s mess.
3. IT leadership has not done a good job of educating their Business partners on TCO.
4. IT Account Managers would much rather be working on the new blockbuster than talking about maintenance on last year’s project.

Many smarter than I thought that with Shared Services the CFOs would get more involved, and unnecessary demand costs would be reeled-in. Surprisingly, I have seen only a few CFOs willing to invest in “consolidation and rationalization,” even during these tough economic times.

Back to planning:
By mid or end of October, you will need an aggregate view of your total next year’s plan that should include:

• Innovation projects (short, 4-6 week sprints to learn and de-risk future larger projects
• New projects (i.e., Business and IT)
• Phase 2+ functionality improvement projects
• Service investments (otherwise referred to as “Keep the lights on” investments)

To ensure success, new projects need to have an estimated funding of +/- 20%; Phase 2 should come in at +/-10%; and service costs need to be aligned to the service agreements and appropriate funding model. All projects should have clear business cases.

November is all about prioritization based on guidance from Executive and Finance. The better you plan in October, the more successful you will be when the new guidance comes—and, yes, it will come.

Putting your investments into a portfolio tool is something we can help you with, and will allow you to manage your investments and make the right tradeoff decisions.

Most maturity level 1 and 2 companies still optimize by divisional silo, but there are new processes, tools and governances that can help you and your company to make cross functional tradeoffs and ensure you are returning the most value for your IT investment…surely something your CEO and CFO would want to know.

Enjoy October. The hard decisions are coming, and those of you who are prepared will enjoy Thanksgiving much better.