As businesses continue to transform through the use of new technologies and applications, it is now well forecast and understood that much of that technological transformation will continue to be driven outside of the IT group. Gartner Group estimates that “IT now controls 58% of enterprise technology spending and it will be about half by 2017” (Evolving the CIO Role Primer 2016, Gartner).
The influence of the IT organization wanes in the face of new, cloud-delivered technologies that can be purchased directly by operating groups such as marketing or finance. This is not another post about how to do more with less.
No, this is instead a post about teaching these other groups how to manage portfolios. Marketing, for example, traditionally manages a series of campaign-driven, one-off functions. They think in terms of discreet projects, efforts, and activities – not portfolios. Need a product launch? They can do that. A promotion to drive channel sales? Sure. Acquisition efforts to gain new customers? Yep. But if you look at your marketing organization today there is little if any experience around how to manage their on-going technology purchases, updates, expenditures, upgrades, etc., as a portfolio of efforts. The concept of a process-driven PMO is anathema to the marketing organization – they in fact rebel against process because it hampers “disruptive, out-of-the-box” thinking. Marketing leaders are not there because they are process-driven people. Typically, they are either metrically driven acquisition animals or creatives who have developed messaging, positioning, and campaigns to drive new product sales.
So what does this mean for the IT organization and the CIO? You have a LOT to teach them about portfolio management and how to think about technology strategy and tradeoffs. If the operating unit’s technology management doesn’t begin to move towards the time-tested approaches the IT organization uses for technology selection, resourcing, execution, and management, you will see organizations like marketing and finance groan under the stress of trying to deal with the myriad of investments that make up their technology portfolio. It is a struggle to chart a roadmap for future success and better outcomes. Continuous improvement? Not likely.
Many organizations are hiring “chief digital officers” to help to guide this business transformation of technology into the operating units. But often the CDOs are put in their positions because they “think outside of the box” and are innovation experts. That is a great talent to have – but not after the technology acquisitions for the operating groups have been mostly put in place and now you have to run a portfolio of technologies.
Gartner indicates, “As IT will control less of the total spending from the lens of a traditional cost-centric approach, CIOs will be required to influence the decisions of the entire enterprise by playing a much broader role” (Evolving the CIO Role Primer 2016, Gartner). This means that the CIO must overtly reach out to his or her counterparts in these other organizations (marketing, finance, operations) and begin by explaining what the future looks like once they have amassed a variety of technologies, systems, hardware, etc. Show them how to develop technology strategies and anticipate changes in the technology landscape so that they aren’t caught flat-footed with yesterday’s capabilities. Involve them in portfolio-level discussions so that they can see how a portfolio is managed and how the tradeoffs are made under a constrained budget (which will happen to them soon…). Teach them that technologies are inter-related and dependent on one-another and not a mutually exclusive set of purchases.
The same learning processes that required decades of effort and trial and error for IT organizations should be used to teach these groups outside of the traditional technology sphere, or you will begin to see large-scale failures in operations, security breaches, data loss, vendor disagreements, - and that’s not what the CEO was looking for when she and the executive team started talking about digital transformation.
We are interested in learning more about the evolution and transformation of IT portfolios at the upcoming Gartner PPM & IT Governance Summit. Visit us at booth 402 or attend our session, Reduce IT Costs & Drive Strategic Transformation with Smarter Portfolio Prioritization, on Monday, June 6th at 3:15.