Treating IT as Investment Strategy

As budgets tighten and economies of scale change resources in the IT sector are under purview to cut backs.Traditionally support systems are where these cutbacks take place first. I have evangelized and advised otherwise where ever I have worked, my idea is until you start viewing IT as vital investment piece that correlates closely to corporate strategy and planning functions, organizations will not be competitive or flexible in the ever changing landscape of business.

So when it comes to IT projects  a culture of treating each IT project as an investment right from the top of the chain of command to the project directors and project managers who bring the implementation to fruition becomes vital in driving  of overall corporate strategy. That is why in IT Governance models,  CIO's, CTO's, CEO's and CFO work in tandem and are key contributors in guiding the overall processes to align with the big picture of the organization. A culture set that way is always able to recognize when it’s time to cut loose projects that aren’t delivering sufficient value. A good example here would be that of Yellow Technologies which in late 90's after a spree of acquisitions had a novel idea of setting up something like the People's court where key managers took part in reviewing software licenses, agreements, projects, partnerships. Once a month 4 IT managers heard functional managers and projects managers and in the people's court of the organization these IT judges came back with a metric evaluation whether the said function stayed or was cut loose from the set of activities the organization was to pursue. A matrix of acceptance and elimination under the governance models were applied and propagated throughout the company. Over a period of time it became the culture and a norm which turned them in the competitive edge for the IT services sector. Another factor and benefit that developed for Yellow Technologies was the element of speed that got built in and IT projects getting done in a faster and reliable manner which in turn saved costs and increased revenues.  

Another stellar example while I study business cases is that stands out for me is what the folks at GE Industrial Systems have achieved. For them, small projects must achieve payback in less than one year, large projects in less than two years—and the idea is to tighten the screws on project time frames and budgets every year. (Only compliance projects, like those required by Sarbanes-Oxley, are exempt from the strict time limit.) The whole idea o philosophy was if a given project is repeated next year that has similar outcomes and similar processes it should be achieved 50 percent faster and in accounting terms which means if it cost $1 to put in the general ledger the next year it should be 50 cents. 

So in conclusion I think a pattern that can be followed is, technology can't be isolated but is to be used as a strategic investment tool where return is expected (hopefully a profitable one)  once that is recognized, a governance model helps to lay down the structure, a matrix of evaluation, elimination and enforcement should guide the ethos of keeping what is needed and throwing off what is not producing results and the end objective is to optimize processes to complete projects or organizational tasks in less time and less cost. 

Cheers till the next time.

Sam Kurien