Many of today’s processes and methods for managing technology investments were not designed for networked organizations operating at high speeds. Financial management best practices were not created for programs, portfolios and assets.
In a recent webinar, we polled attendees and asked them about which factors are most important in overcoming IT investment management roadblocks. The top top answers, Siloed Investment Thinking and Lacking Enterprise Roadmaps, together accounted for more than half of the total number of responses. This tells me that there is still a significant amount of siloed thinking when it comes to planning and implementation.
Of particular interest is that Static Resource Allocation and the Inability to Shift from Project to Product Based Thinking together account for 36% of responses. Those factors address a key impediment – the ability to think, plan, manage and allocate resources in a rapidly changing marketplace.
Effectively managing the IT portfolio requires a significant shift from project-based thinking to more of a product-based approach to investments. Product-based makes innovation easier as it reduces the need to continuously struggle to generate acceptable innovation ideas. Projects are not discrete investments but rather releases that are part of a free flow of investments that improve enterprise capabilities.
Additionally, companies need to recognize that traditional resource allocation is optimized for businesses that perform according to schedule on an annual planning cycle. Unfortunately, it cannot accommodate the challenges of mounting complexity and rapid change. They can learn from pioneers like Frank La Rocca from Consolidated Edison who adopted agile resource allocation practices, including monthly reviews of project performance and the dynamic reallocation of resources based on that assessment, which have proven to be highly effective for the utility. (Learn more about Frank La Rocca’s experience with ConEdison here)
The agile allocation of resources and product-based thinking support the new market demands for the ongoing process of “searching, allocating, learning and modifying” investments.