Firms must achieve greater levels of transparency to create a strong link between strategic planning and execution.
The drive to excel in market conditions dictated by an increasingly sophisticated customer base is turning business on its head.
Before technology management can become an effective partner with business, the two groups of leaders must rethink the way they plan and execute – and begin to act as one.
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Firms must achieve greater levels of transparency to create a strong link between strategic planning and execution. By integrating strategic planning into execution with automation and feedback loops, companies can build greater agility into gauging the impact of their investments, such as how agile development teams perform.
Using agile planning practices enables firms to ignore annual project budgeting and move towards continuous portfolio-based planning. Taking this approach brings greater value over time, enabling organisations to evaluate demand and align work with business value while remaining time-sensitive to allocate resources effectively.
Strategic planning must be a continual, holistic practice supported by performance data that drives informed decision-making. Using portfolio management, as a communication tool that aggregates strategic and operational performance, increases transparency and allows firms to achieve corporate objectives. Using portfolio management as a decision-making tool helps firms focus on initiatives that drive greater value instead of wasting resources on low-value activities. Balance requires greater visibility in an integrated demand pipeline to remove constraints on key resources. Optimising work cadence allows companies to start fewer efforts, but finish more, while freeing resources for innovation.
Using this approach, business and technology leaders can direct critical resources on the necessary initiatives that will help them achieve their intended strategic outcomes. You need a vision for strategic planning and portfolio management to advise decision-makers how they can select and deliver the right value for technology investments at the right time.
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Strategic planning is not an isolated or annual event. It is performed as a continual exercise, using the performance feedback information as a barometer for decision-making. The CEO may own the strategic vision, but the C-level executives and business unit owners jointly own the plan, and investment owners own the outcome.
Firms map their key capabilities and services – those necessary to maintain and grow market share – to show how technology can best enable the business. This exercise helps firms understand the impact and relationship of a change to an ecosystem.
Agile planning practices focus on strategic and execution investment decisions that are the most relevant at a given point in time. Transparency of performance measures and metrics enables balanced investments across new and current initiatives more frequently, preventing the need for once-a-year or half-year planning and budgeting cycles. Long-term investment strategies and short-term execution are defined using data from feedback loops. Enterprise architecture (EA) tools are evolving from a focus on architecture modelling to a broader focus on planning, portfolios and assessment of the impact of strategic change. Similarly, project portfolio management (PPM) tools are supporting strategic planning activities across the enterprise as well as execution activities in and across projects. These separate tools are coming together to link planning inputs to execution and provide views to support different decisions by different sets of stakeholders.
Time to end annual planning
Budgeting is completed in most firms, but it is not strategic planning. Instead of strategic planning and transparency, human nature takes over. Driven by a “spend it or lose it”
mentality, executives clog the demand pipeline with wish list projects. Delivery teams waste time and resources estimating projects that may never get started because business units have asked for more than their resources will support.
Technology is a differentiator, but people make it sustainable. Key people in business, technology and external partner roles represent your collective capacity to take on initiatives, source them with hybrid staffing models, support new business and technology, and reshape legacy IT culture such that it can support the needs of technology management.
Today, businesses must exceed the expectations of technology-savvy customers that demand a desirable experience from products and services via multiple touchpoints. That means transitioning from activities designed for stability and burdensome control to shorter, nimbler services that can adapt to changing situations.
Strategic planning and execution activities lack strong tethers to each other to create a clear value stream. In the face of seemingly endless demand from business leaders, some IT executives let the work pile up rather than pushing back – feeling there is no purpose in planning when business demand is changing so rapidly.
When the strategic planning activities do not prioritise effectively, execution becomes inefficient as IT executives can rarely allocate and manage available resources effectively. When prioritisation loses its link to business value, business leaders can (and will) behave parochially and delivery teams are left behind.
Role of IT
Transitioning from technology provider to full business partner means fundamentally changing how you use planning and portfolio management to create business-level transparency. The need for speed is all-consuming. If you cannot pivot, somebody else will. New business opportunities do not sit around waiting for you to act. Business leaders are increasingly bypassing traditional IT altogether, going directly to system and service providers. This may resolve the initial symptom, but it creates longer-term headaches as IT learns it must fold the new technology into an already overstuffed environment.
Strategic decisions can no longer occur in a narrow-minded context. Information silos spawn limited behaviour that defies corporate strategic intent. Business leaders who only see their slice of the pie will act in short-sighted ways. Transparency across strategic planning and execution views is the antidote to this behaviour. It enables strategic management of investments according to their value to the business as a whole and optimises the best overall use of key resources.
Many individual practices in strategic planning and portfolio management exist today, but are disconnected. A next-generation approach will organise them with new capabilities and execute them collectively. This new approach places an increased emphasis on frequent updates, balanced investments, and accurate and timely decision-making, leading to more successful execution.