Get With The Programme!

Technology is today embedded in almost everything that we do as individuals, societies and organizations. We have come a long way from the early days – yes, I was there – when the primary use of technology was automating operational tasks such as payroll, where benefits – largely cost savings – were clear and relatively easy to achieve. Today, applications of IT enable increasingly strategic and transformational business outcomes. While these outcomes would not be possible without the technology, the technology is only a small part of the total investment that organizations must make to achieve their desired outcome, often only 5% to 20%. The reality is that these are no longer IT projects – they are investments in IT-enabled business change – investments in which IT is an essential, but often small part.

Unfortunately, our approach to managing IT continues to lag in recognizing this shift. We still exhibit “silver bullet thinking” when it comes to IT. We focus on the technology, and delegate – more often abdicate – responsibility for realizing value from the technology to the IT function. In a recent post, IT Value Remains Elusive, I discussed a recent ISACA survey in which 49 percent of respondents stated that the CIO or IT managers are responsible for ensuring that stakeholder returns on such investments are optimized – with 8 percent saying no one was responsible. Technology in and of itself does not create value – it is how enterprises use technology that creates value. With the evolution of how we use IT, a different approach to the management of investments involving IT has become a business imperative if we are to fully realize the potential value of these investments.

Realizing this value requires broadening our thinking to take many more interrelating activities into account – moving beyond stand-alone IT project management to business programme management. Managing programmes of business change where technology initiatives contribute to business results in concert with initiatives to change other elements of the overall business system, including the business model, business processes, people skills, and organizational structure. It also means that accountability now must be shared between the business and the IT function – while the IT function is accountable for delivering the required technology capabilities, it is the business that must be accountable for realizing value from the use of the technology. This includes: deciding which programmes to undertake; ownership of the overall programme – including all the necessary  initiatives ; and ensuring that expected business value is realized over the full life cycle of the investment decision. Further, to support this, the business case for any proposed investment should be: at the programme level; complete and comprehensive – including the full scope of change initiatives required to achieve the desired outcomes; and a “living”, operational document that is kept up to date and used to manage the programme through its full economic life cycle.

We originally introduced programme management as one of the cornerstones of the Benefits Realization Approach in The Information Paradox. With Val IT™, we included it as part of the Investment Management domain (IM). OGC has also introduced Managing Successful Programmes (MSP) and, more recently, Portfolio, Programme and Project Offices (P3O), and the Project Management Institute (PMI) have extended their PMBOK to include Programme Management. The good news is that there is certainly no shortage of resources for those who want to implement Programmme Management. The bad news is that, while many organizations across the world have significantly increased value through their use of Programme Management, they are the “early adopters” with the majority of enterprises still lagging.

One of the reasons for this is that there is a common tendency to view programmes  as large, complex beasts – only applicable to large enterprises – and a mistaken belief that using the term will over-complicate things. Nothing could be further from the truth – certainly not when programme management is intelligently applied. Enterprise Resource Planning, Customer Relationship Management, Supply Chain Management, Business Intelligence, Social Networking, etc. are extremely complex programs of business change. Denying complexity – taking a simplistic view of change – only increases complexity. Only when complexity is understood can it be simplified, and then only so far. As Albert Einstein once said “Everything should be as simple as possible but no simpler.” The line between simple and simplistic is a dangerous one. Implementing organisational change requires changing our “traditional” approaches to governance – it requires that we “change how we change”!   Effective Programme Management is an important part of that change.

Taking the programme view can still however be a very daunting prospect – there can be just too much to take in all at once – unless an appropriate technique is used – one designed specifically for this purpose. In an earlier post, A Fool’s Errand, I discussed the need for a benefits mapping process (using Fujitsu’s Results ChainCranfield’s Benefits Dependency Modelling, The State of Victoria’s Investment Logic Mapping, or some other similar technique) to develop “road maps” that support understanding and proactive management of a programme throughout its full economic life cycle. Using Fujitsu’s Results Chain terminology – the one I am most familiar with – the process is used to build simple yet rigorous models of the linkages among four core elements of a programme: outcomes, initiatives, contributions, and assumptions. With the right stakeholders involved, and supported by strong facilitation, such a process can, in a relatively short time frame, result in clearly defined business outcomes and contributions, enabling management to ensure alignment with business strategy, define clear and relevant measurements, and assign clear and unambiguous accountability. They help to “connect the dots” and facilitate understanding and “buy in” of the those who will ultimately receive the benefits.

The challenge facing enterprises today is not implementing technology, although this is certainly not becoming any easier, but implementing IT-enabled organisational change such that value is created and sustained, and risk is known, mitigated or contained. This is where Programme Management, supported by benefits mapping can and must play a key role. The OGC states that: “The fundamental reason for beginning a programme is to realise the benefits through change.” In a March, 2008 Research Note, Gartner said that “We believe [strategic program management] is the management construct best suited to enable better business engagement, value delivery and risk”. Enterprises who want to enable such outcomes would do well to take a serious look at Programme Management.

The Challenge of Business Engagement

When I ask individuals or groups around the world what their greatest challenge is related to implementing effective enterprise governance of IT,  the answer is consistently “getting the business appropriately engaged”. Conversely, where they have made progress, the “tipping point” has also consistently been when the business accepted ownership of, and accountability for the use of IT to create and sustain business value. We will continue to come nowhere near to realizing the potential value of IT-enabled investments until we address the challenge of business engagement and ownership.

A number of years ago, my wife and I built a house – or, more accurately, signed a lot of cheques to get the house built. We spend an enormous amount of time up front – first with our architects, then with Mike, our builder and the architects – and once actual construction started, were on-site almost every day – often more than once. Despite all the time we had spent up front, there were many decisions to be made – decisions that often cost little or nothing, even saved money,  but – if they had not been made – would have resulted in livability issues and/or increased costs down the road. We were, and still are very pleased with our house.

Now, if we had built our house the way most organizations acquire/develop IT systems, what would we have done. We would have spent some time sketching out what we thought we wanted, probably bypassed the architects because we didn’t need them, and then told Mike what we wanted, what we wanted to spend and left it at that. After all,we weren’t in the house building business – we had other more important things to do. When Mike would have called to tell us the house was ready, we wouldn’t have liked it – we might even have hated it! We would have fired Mike – if we lived south of the 49th parallel probably sued him. We would then have hired someone else to “fix it” and/or sold it and started again. Sound familiar? While it was certainly true that we weren’t in the house building business – we were in the house living business, and  – as the owners – the house was being built with our money. What we would have done was abdicate our responsibility as owners – the ones who would have to live in that house for the next 10 – 15 or more years – to Mike. It wouldn’t have been Mike’s fault – it would clearly have been ours!

As long as the business continues to see anything to do with IT as an IT problem (“we’re not in the IT business”) and abdicates their responsibility as the owners and ultimate users of the technology to the IT function, we will continue to have significant challenges around realizing value from IT. Putting it in the governance context, only when IT is seen as an integral part of enterprise governance will the issues around realizing value from IT investments be addressed. A 2007 report from the BTM Institute[1] confirms that enterprises focused on converging their business and technology disciplines exhibited superior revenue growth and net margins relative to their industry groups and exhibited consistently greater rates of return than those of their competitors.

Boards and executives need to understand that they can no longer treat IT as a “black box” – something distinct and separate from their core business.Today, the box is empty; its contents distributed and embedded throughout the enterprise as electronic bits of business processes that run up, down, across and among enterprises and their customers, suppliers and other stakeholders. In The IT Value Stack, Ade McCormack says “Information technology isn’t an optional extra, it is a condition of entry to most markets. It is the enabler of business sustainability. The CEOs who don’t get that are either in the wrong job or have done some calculations in respect of their retirement date and this reality dawning on the shareholders.”

The need for dialogue

A number of years ago, a senior Australian public sector executive said to me “I need to get the right people in a room having the right discussion.” His statement captures the essence of the problem. We need to break down the current siloed view of IT and the business – the “two solitudes” as I often describe them. We need to create and sustain an on-going dialogue between the business and IT leaders. Whilst an important part of this will be informal, this is necessary but not sufficient. We need a formal governance framework which promotes and supports such a dialogue.

Depending on the current maturity of an enterprise, this dialogue needs to include a number of key elements:

  1. Understanding the role of IT in an enterprise – a role that has evolved over the last few decades from automating transactions to fundamentally transforming the nature of the enterprise;
  2. Understanding what constitutes value for the enterprise, how value is created and sustained, and how IT contributes, or can contribute to creating and sustaining value. We need to get away from trying to measure IT’s precise value which is a meaningless exercise guaranteed to keep ranks of MBA toting consultants busy, to understanding how IT contributes to value;
  3. Understanding the roles, responsibilities and accountabilities of the board, executive management, business unit and IT function management in maximizing the contribution of IT to business value;
  4. Developing a comprehensive program of change to implement or improve governance processes and practices around value management, focused initially on key “pain points” where early results can be achieved;
  5. Managing the journey – learning by doing, leveraging successes and continually improving the processes and practices.

Enterprises do not have to start from scratch when undertaking such a program. There is a growing body of knowledge in this space. Since The Information Paradox was first published some 10 years ago in 1998, many more books and articles have been written on this subject and many organisations such as the IT Governance Institute (ITGI), the Office of Government Commerce (OGC) and the Project Management Institute (PMI), as well as academic institutions such as Cranfield and UAMS, and vendors such as Fujitsu have developed frameworks and methodologies to assist enterprises on this journey.

The need for effective enterprise governance of IT is real – the on-going cost of not doing so is huge – the resources are available to make it happen – it is time to act!


[1] Business Technology Convergence Index, The Role of Business Technology Convergence in Innovation and Adaptability and its Effect on Financial Performance, BTM Institute, June 2007