Ambition in driving customer facing innovation is often dimmed when organizations are faced with the pragmatic reality that their IT budget is consumed by required security projects, “keep the lights on” operations, and desperately needed technology upgrades. Innovation is often not considered during the IT budgeting process, or as we are commonly seeing today, an increasing amount of the budget is being spent in the Line Of Business (LOB) to drive experimentation.
This trend is accelerating, and putting more pressure on IT organizations to focus on linking data from enterprise systems of record to much needed revenue generating customer experience applications. And when there isn’t alignment on the roadmap, business value of strategic goals, and organization and technology readiness, budgets tend to get the peanut butter spread approach across all goals. We have found there is a very structured way to drive that alignment, which can create a much more robust method for allocating limited budget for maximum effect.
We believe in using a very structured approach that aligns strategic goals, business value, and readiness along with a roadmap of ranked initiatives. This paints a clear picture of the most valuable initiatives with the highest chance of success. Further, it drives alignment with the business and creates a pull through effect and cadence for projects while limiting reactionary work throughout the year. It also helps to eliminate the types of projects that aren’t fully aligned with the strategic goals.
The fact is, misaligned projects tend to have significant scope, timeline, and budget creep because they didn’t have clear goals in the first place. When it comes to executing major disruptive programs, we also see the importance of using a hybrid team approach with a vendor that has experience. We believe in experimenting and building standards with an expert, then scaling to maximize budget and success.
Low priority expenditures often linked with high priorities
By using the process discussed above, you get a fully visual heat map of the value of your projects for the spend, and you can also see where there are smart choices to be made. In some cases, projects that are of high business value have very low organizational or technical readiness. By using a ranking process, it is easy to see what should be trimmed and where.
To secure a budget increase, proving business value, organizational readiness and having a solid execution plan are key to getting the LOB on board. Cost savings or revenue growth need to be objectively proven. For example, we recently helped a travel and entertainment firm demonstrate that by upgrading and standardizing their mobile device strategy their hard cost savings were over $10M. It was easy for the business to justify a $2M out of cycle purchase this year to save that budget in the future.
Misaligned projects tend to have significant scope, timeline, and #budget creep because they didn’t have clear #ITgoals in the first place.
Budget mistakes come when there isn’t clarity around alignment and value for the business. This creates projects that spiral out of control and often lead to the question “why are we even doing this project?” If it isn’t clear in the beginning, it won’t be by the end.
The second is not having a good roadmap of the initiatives and budget. We often see scenarios where, for example, there is a mandatory upgrade from a tool like SharePoint on-prem to SharePoint Online, while there is also a project going on in the same LOB to implement Dynamics CRM. Both will need to be integrated but each project is considered separately without a common roadmap that would have led to implementation and major cost savings. Without a solid roadmap we see a lot of duplication of effort and waste.
When setting a budget, IT leaders should look to hire a firm that can help drive the alignment across strategic objectives and organizational and technical readiness. Only then can they build a roadmap that creates a digitally innovative advantage for the company.
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