The truth is change is coming to a theater near you and soon, but how it comes is entirely up to you. That is the measure of control you do possess. Change can come incrementally or manifest itself as the Big Bang!, and the latter will be much more disruptive than the former, we promise you.

Very often in our line of work we’ll hear someone in IT / IS or Corporate services say, Thank goodness that project is finally finished, as if one particularly pesky piece of business is behind them and it’s smooth sailing ahead. Well, no. If you don’t want to go through the Big Bang! experience (otherwise known as when the wheels fall off), this is not the mindset you should cultivate. Each and every day we at TAG spend considerable energy helping organizations become comfortable with the concept of incremental or continuous improvement. Why? Because if you’re constantly improving, you rarely suddenly arrive at the Big Bang! crossroad.

You can either be the Changer or the Changed, but it is better to be the actor than the acted upon. Change will not be denied. If you choose internal stasis through passivity or inertia, external agents will force you to change because the competition and market won’t take your everlasting comfort into consideration. . .and then what? Right. You’ve got the Big Bang! to survive, because staying where you were allowed the competition and the world to pass you by.

We know change is difficult, so we won’t belabor the point. Nevertheless, if you put the following conditions in place, it won’t be quite so arduous:

Mary Shelley, author of Frankenstein said, “Nothing is so painful to the human mind as a great and sudden change.”  Since change is (ironically) a permanent state of being, leading an adaptable organization focused on steady, incremental improvement is vital. If change is anticipated and implemented without fanfare on an ongoing basis, the hysteria of the Big Bang! will be kept in check.

Goals ► Priorities ► Outcomes ► Initiatives

Do your organizational goals sound something like this: Foster talent by building a culture that maximizes opportunities for growth. Sounds nice, right? But how would you measure that? How would you know when you’ve achieved it? The truth is, it would be next to impossible. Whether you’re creating goals at an organizational level or at an operational level, here are some tips for improving them so that you can demonstrate their achievement.

Describe the outcome.
The trick is to describe the result you hope to achieve rather than the activity. Measuring an activity can result in meaningless metrics. (It is also wise to stay away from words and phrases that cannot be measured such as maximize or more efficient.) Here’s a possibility: Growth and innovation will increase through training, mentoring, and creating time buffers around scheduled projects.

Studies have shown that goal specificity and level of difficulty have a direct impact on employee performance: Goals that are specific and challenging (but not unreasonable) lead to better performance by motivating employees.

Create line of sight.

Just as important, a clear line of sight should exist between corporate objectives and the goals set at the operational level—employees should be able to grasp their roles’ importance in the larger picture. In order to achieve this, it is helpful to include different levels of the organization in developing the goals to ensure consensus, cooperation, and realistic goal-setting.

Define the measure.

Once your goals have been determined, you will be able to think about how you will measure the outcome.

• What are we trying to achieve?
• What behavior are we hoping to encourage? (Key Performance Indictors)
• What will success look like?

Performance measures should be as explicit as your goals, and answer the following:

• What change is being measured?
• How will the change be quantified (generally a number or percentage of something)
• What is the starting point or baseline measure?
• What is the target performance? By when?

It is an old saying but true: you cannot manage what you do not measure. Measuring tracks the specific activities and conditions necessary to support your goals and provides the means by which you communicate to the organization what is important. Measuring also presents the opportunity to identify problem areas and affords employees the ability to monitor their performance and see themselves comparatively. It is therefore vital that you measure the correct things—not the easy things because they exist or because you’ve measured them before—the right things. If your goals have been delineated with specificity and the outcomes you wish to achieve are clear, chances are you will know what they are.

First, using the 80/20 principle, think about which projects are critical, must-haves, and core to your mission (about 20% of the whole array), and set aside those that are discretionary or not vital. During this exercise, projects that should be eliminated altogether should be obvious. (Be ruthless.) Of the mission-critical projects, decide which should proceed and which should be deferred based on urgency and capacity. Considerations during your deliberations should include:

• The organization’s ability to undertake the project:
  • Do you have enough funding and staff?
  • Is there a learning curve?
  • What will on-boarding require?
• Data derived from the success or failure of other projects
• Timing and competition with other critical projects, especially for key SMEs and Management attention and cycles
• How projects may be interrelated and dependent on each other
• New technology and business process changes

Second, having decided which projects should proceed, it is time to collaborate with the entire range of managers, from line managers to senior managers, to prioritize them. Each will contribute something to the debate, and it is better to debate now than waste valuable resources (time, money, and people) later. Line managers will have first-hand knowledge of processes and capacity; middle management will have a better view of the interplay and inter-relationships between departments and activities, and top management will possess the long view that encompasses the overall organization direction and strategy. And obviously, inviting greater participation overall means greater cooperation and commitment.

Third, once your projects have been prioritized, it is time to figure out who will be doing what. Streamlining your projects down to the vital few has the added benefit of not stretching the capacity you have, but concentrating it where it is needed most. Here I would offer a special caution: it is very important that you are realistic about day-to-day operations and the support resources necessary to Keep The Lights On. Too often organizations under-estimate this aspect and/or think of KTLO resources as discretionary. They are not. Borrowing resources from KTLO operations results in “robbing Peter to pay Paul,” and effectively lowers service levels and stresses organizational capacity. Perhaps even more harmful, it underscores the notion that KTLO work is of less importance or less glamorous, damaging morale and trust.

Peter F. Drucker wrote, Management is doing things right; Leadership is doing the right things. Getting your portfolio into shape by winnowing out projects of questionable value and tabling those that can wait will go a long way to making the choice clear.

First, inventory ALL projects and activities that require any kind of IT resources, making sure to include non-obvious ones like SMEs and user training time. According to Gartner, 60% of IT’s budget is spent on operational, “keep the light on” activities, so it is important that these are included to ensure correct allocation of project resources. Projects that pull resources from core operations can create business risk.

Second, decide who will comprise a governance committee, i.e., who will make decisions concerning the portfolio. This should be a mix of IT and business leaders with the authority to make decisions for the organization. The governance committee will determine which projects should continue, which should be delayed, and which should be terminated. These decisions will be made based on determining which projects have the potential to create the most value for the company. Each project in the portfolio should align with business goals and be ranked on the strength of its business case outlining benefits, costs and risk. Keep this simple, but also be on the lookout for project interdependencies. You certainly don’t want a critical project bungled because it relied on deliverables from another project that was killed or delayed.

The importance of strong governance in the portfolio process cannot be overstated. Projects that are nice but not essential drain away resources that could be used more productively. Focus on cutting unnecessary demand and don’t start new projects until you know for certain that existing projects can be completed and meet expected deliverables. This won’t be easy. Every project is “owned” by someone who thinks it is the most important project in the portfolio, so it is essential to let the business case data drive the decision, and not emotions or politics. We can all relate. This time of year I can see myself riding around on a John Deere with 4-wheel steering, a zero turn radius, and a 48-inch mowing deck. Grass cutting would be so much easier (okay, and a little fun). But, with financial resources being what they are, I can’t make the case for its purchase because it will not really provide any material benefit. It’s just a “nice to have.” So, back to my 21” push mower. Sorry, John Deere dealer.

Half the year is gone. As you look at how you will finish out the year and also prepare for next year’s portfolio of projects, the summer months are a great time to review your project portfolio and get the pruning shears out. Since 80% of the benefit usually comes from 20% of the projects, in portfolio management, less is always more.

The same can be said about an IT organization’s approach to cost optimization. After years of one-off tactical cost cutting, many businesses are facing the challenge of ongoing and continuous cost optimization. For many, this is no longer the exception but the new reality.

The usual approach to cutting costs is the purely tactical. Problem is, when the clear cost culprits have been identified and reduced or eliminated, future optimization initiatives can become more arbitrary and problematic. Even the low-hanging fruit that appears to be an obvious candidate for reduction to some may not be to others—like your business clients.

In a recent Gartner survey, CIO’s were asked, “What are the main barriers preventing organizations from achieving continuous optimization of IT costs?” Sixty-five percent of the respondents indicated that it was a matter of mindset—that is, creating the environment necessary for all resources to work together, move in the same direction, and agree on the same strategy.

We agree. TransAccel believes there’s a better approach to determining cost optimization decisions—one based on four “Guiding-Principles.” The benefits of using this method include a more consistent alignment with the company’s strategic drivers, a consensus among business leaders, a long-term framework for ongoing cost optimization initiatives, and a correct way to maintain what is most important to the organization.

The Four Principles are:

1. Transparency – IT and business leaders need to explicitly agree on what IT provides the business, and what the business needs from IT. Often, basic cost optimization practices lack quantitative data to define consumption, drivers, and inhibitors for IT and business services. Transparency provides different viewpoints of IT spending, allowing for better consensus and agreement regarding opportunities for optimization and prioritization.
2. Flexibility – Maintaining a prudent balance between both internal and external resources allows an organization to remove or add resources as the business climate changes. Sourcing IT on a variable basis is a good strategy for continual optimization.
3. Simplification – Running IT systems on standardized platforms leads to consistent business processes and well-defined IT services, which reduce costs. In highly complex environments, IT unit costs can be as much as 25% higher.
4. Discipline – In order to maintain constant focus and vigilance on cost optimization initiatives, an accountable and proactive owner should be delegated (normally the CIO), who will utilize dashboards and metrics to measure success rather than wait for cost targets to be handed down from top management. Additionally, establishing an optimization team that includes leaders from outside IT to help weigh business outcomes and constraints is another option worth considering.

In later blogs, we will explore some of these important principles in more detail. However, the four above are critical if a continuous and effective cost optimization environment is going to exist.

The goal is to manage IT as a business, and to leave all the laughs to Groucho Marx.

The other day, I ran across a great piece by Gartner about improving project success. Its premise was that if you focus on three things—Partnership, Requirements and Resources—you can really increase the probability of a successful project outcome. Wow! . . .something different from The Big Three!! I was easily able to relate requirements and resources back to the big three, but what about partnership? The formal definition of “partnership” (courtesy of my dictionary) was of little use, but when I looked at its synonyms, I found words like alliance, collaboration, connection, relation, and union. And that’s when it hit me. Partnership doesn’t relate to the big three but rather comprises the foundation that enables us to deliver on them. Without true partnership, project realization or the ability to deliver the expected value from the project is unlikely.

This should have been obvious considering the successful projects I’ve participated in and led. It was partnership at all levels that helped drive realization. From various IT organizations to external partners to the client organizations themselves, the most successful (and fun) projects were always built around partnership. In fact, one might argue that partnership was more important than The Big Three because these successful projects weren’t always on-time, on budget or delivered as initially envisioned. Instead, the customers were heavily engaged along the way, were part of the decision making process, were active participants in validating and re-validating the scope, and were integral parts of testing and acceptance. And so, while I very much agree with the Gartner’s assertion, I would add that management of the big three is table stakes in today’s world—the true differentiator on projects is partnership.

Lennon and McCartney wrote the lyric “I’ll get by with a little help from my friends,” and I would propose that they got it right: with a little help from each other (in partnership throughout all aspects of a project) we can greatly improve the chance of success.

What do you think? Do you have any examples of how partnership drove success?

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.

In an effort to make planning less overwhelming, every month I am going to provide in this space a guide for the upcoming month. This guide will include a checklist and a set of questions that every IT leader should contemplate to be successful in 2012.

The first step to IT planning is aligning the IT calendar to the corporate calendar. If you are like most of our clients, the corporate financial calendar is based on the yearly calendar. This makes September the most critical time of the year in terms of planning for the following year’s success. Therefore, from a corporate calendar perspective (January through December), the first month in an annual planning calendar should be September.

September has begun, and, with the Labor Day holiday, we’re all probably behind schedule already. It’s time to get back to work—there is little time to be wasted. Here is where I recommend you begin:

September Theme: Alignment

To do:

Determine what 2011 projects are slipping
Ascertain what needs to happen to complete 2011 projects
Focus resources on completing those projects
Arrange for face-to-face meetings with divisional leadership. The objective is to hear and engage with each business unit regarding its objectives for 2012.
Immediately following these meetings, the IT business groups should meet and prepare a recommended plan for 2012 that includes objectives, strategies, programs, projects and estimated resource requirements.
To stimulate thinking and discussion:

What improvements / adjustments are needed to sustain your future business model and objectives?
Where are you with current operational improvement initiatives? How much more do you need to invest in these initiatives to achieve the desired outcome?
What events might affect the course of your transition?
How do you ensure alignment across all division, unit, and support functions?
What does this mean for your external partners and suppliers?
How can you utilize your extended ecosystem to its fullest?
I welcome your questions and feedback on this guide. We can all benefit from hearing about other’s issues and ideas. Happy planning!

Over the next few months members of my team and I will be writing about:

• IT Maturity
• Capacity for Change
• Operational Effectiveness
• Measurement and Metrics
• Governance
• Portfolio Management
• Change Management
• Leadership and Organization Development
• Vendor/Service management
• Communities of Practices
• Innovation (my personal favorite)

Where to start? For me it all begins with a good understanding of who you are, where you are, and where you would like to be. And, just as an annual physical exam uncovers potential health issues, we insist on a “IT Health Check” too. After all, how can we know what remedial measures to take without an initial assessment?

Now, it seems pretty obvious that getting an annual check-up is smart and generally contributes to better health, right? Well, how many IT organizations put off a yearly exam and try to self diagnose? Worse yet, how many IT organizations have never even had an exam—you know, an independent review of how they operate? Interestingly, when we do a “Health Check,” we find that most IT organizations today are similar in two respects.

First—and to the seeming surprise of Business—IT is made up of human beings who have the same issues as everyone else: lack of trust, fear of conflict, lack of commitment, avoidance of accountability, inattention to detail, and indifference towards results. Having been in the business some 30 years I can tell you without question that these “soft” skills are just as important as “tech” skills to the success of IT initiatives and operational effectiveness.

Second, today IT stands poised at a crossroad. On the one side are the Business demands: compliance with internal and external regulations, security of information and assets, maintenance of IT architectural integrity and stability, and the delivery of innovative technology. On the other side are the obstacles to fulfillment: a rapidly changing workforce, a lack of leadership expertise, budgetary restraints, the shifting of non-core activities to external resourcing partners, and the fact that every department can make individual hardware and software decisions. The resulting tension and stress on IT cannot be overstated.

Considering these problems along with the scant resources spent on infrastructure, i.e., leadership and management training and development (that soft skills stuff I mentioned earlier), it is no surprise to me that most IT organizations are running full bore and still unable to meet the myriad Business objectives. We refer to this phenomenon as “no capacity to change,” and it is this very inability that is misconstrued as a lackluster attitude toward innovation, the very “innovation” that is supposed to save our beleaguered economy.

The challenges facing IT are complex; I won’t deny that. But they are not insurmountable. And, because this is my first blog, I feel compelled to tell you how deeply committed I am to helping IT employees and organizations work differently and maturely so that every individual and organization as a whole can deliver its very best. I want to give them the tools to work in new ways that are uplifting and rewarding. But most of all, I am determined to help IT gain the capacity to change and to attain its rightful place at the center of business driving innovation. By the way, this is what our consulting firm is all about.

Please check in from time to time. I’ll be here sharing my thoughts and specific ideas about specific issues—it would be great to hear from you too. For now, my parting thought is this: Get checked-out sooner rather than later so that you and your organization can begin to focus on innovation. After all, we have an economy to save.