The road from Enhance to Transform is paved with greater transparency, stronger relationships, tighter processes, and clearer metrics.
The transition from Enhance to Transform often begins when a business executive invites the IT leader to lunch to discuss a new project idea. I use this example because I’ve seen it numerous times. It’s an indication that IT is starting to be viewed differently – not as a black hole to pour cash into, but as a potential strategic asset.
In the Enhance region of the IT Value Journey, you’re delivering better basic service at a lower cost, enabling you to shift resources away from break/fix and into the infrastructure and software updates that the business needs and expects. At this stage, you consistently measure the value that IT creates. The Maintain activities go into continuous improvement mode, driving incremental efficiencies and better quality, quarter after quarter.
Trust, credibility, and respect accelerate in the Enhance region when you can communicate strategic IT metrics that translate directly to business value. In previous articles we discussed key metrics like improved customer satisfaction with steadily reduced costs, or more software features delivered in less time at lower cost and with greater quality. These measures are meaningful to business leaders, and they objectively illustrate the value that IT is creating.
The Road from Enhance to Transform
We recommend four strategic objectives for the journey from Enhance to Transform:
- Support business needs with timely enhancements
- Partner with clients to understand their needs
- Embrace effective governance
- Deliver quality enhancements within stated time, scope, and budget
We’ll explore each of these and explain the processes and metrics associated with each.
Support Business Needs with Timely Enhancements
As you enter the Enhance state, you’ve already improved basic processes and have more of your resources available to deliver on business needs. There’s probably a backlog of long-awaited infrastructure upgrades and software improvements that you can finally address.
We recommend that you meet with business managers to identify the value to be generated from each of the requested enhancements. Then meet with the IT team to estimate the time required to complete the work. Translate that into a cost/benefit analysis based on the cost of the resources versus the benefit to be delivered. Share that analysis with business leaders and suggest that IT set priorities based on the greatest and fastest ROI.
For each enhancement project, share your time estimates with the business users – and stick to the schedule. If you’re an Agile shop, your estimating should have improved in the journey from Maintain to Enhance and you should have confidence in what your team can achieve in each sprint.
When you prioritize with the business leaders based on cost/benefit analysis, and consistently deliver the enhancements that the business needs, you will see the rising tide of IT trust, credibility, and respect.
Partner with Clients to Understand Their Needs
As you work with your end users to prioritize enhancements, your team should be gaining insight into the business strategy and departmental priorities. IT can soon shift from reactive – simply doing what you’re asked – to proactive, where you can anticipate business needs, offer suggestions to your business colleagues, and suggest process improvements.
We recommend to our clients that each member of the IT Leadership Team conduct at least three interviews per quarter with business leaders, from senior executives to managers. The business leaders will start seeing IT as a proactive partner rather than a reactive service, paving the way for IT to play a more transformative role.
Embrace Effective Governance
Good governance is liberating, not restrictive. By time you reach the Enhance state, you probably improved your customer service practices, infrastructure monitoring and patching, operational procedures, and software development methodology. Your metrics are improving and your able to focus on needed enhancements. IT all happened because of better processes and reporting.
Now it’s time to stop using the term “governance” and start referring to the “IT Quality Program”. Yes, they’re synonymous, but the latter sounds so much more inviting and valuable.
If yours is a public company, your goal should be zero material weaknesses and zero significant deficiencies. Work closely with your internal and outside auditors to understand any challenges with internal controls. Identify ways to improve your processes, or point out mitigating controls, and discuss with the auditors to seek their approval, to the greatest extent possible, before implementing changes.
Our experience has shown that good IT controls result in better performance and less expense. That’s why we refer to governance as a quality program. When your business leaders see no material weaknesses and no significant deficiencies, their confidence in IT will improve and you will light the road from Enhance to Transform.
Deliver Quality Enhancements Within Stated Time, Scope and Budget
Now that IT is partnering with the rest of the business, rather than just keeping the lights on, it’s time to challenge your team to perform at higher and higher levels. Improved processes enabled you to measure IT performance. And the measures gave you a baseline from which to continuously improve.
The measures also provide insight into how well your team estimates work. By looking at actual time and cost for projects versus your team’s estimates, you can help individuals estimate better.
Set a goal of delivering 75% of projects within their stated time, scope, and budget. When you achieve that, raise the bar to 80%. Then 85% and 90%.
Publish your performance metrics so everyone in the business can see your continuous improvement. This is one more metric that drives greater trust, credibility, and respect for IT, and paves the way from the Enhance state to the Transform state.
Measuring the Value of IT
By time you reach the Enhance state, you have standard processes that enable you to measure IT customer service, infrastructure and operations, and software development. Now it’s time to quantify the value IT is creating and share it with the rest of the business.
When a project is initiated, the business sponsor should be required to commit to the revenue gain or cost savings that the project will deliver. IT must commit to the cost of delivering the project. If you have an IT Steering Committee, suggest that they support this policy. Otherwise, ask your CFO for support.
Remember the discussion, above, about prioritizing by ROI? Well, at the end of each project, verify the results. Did IT complete the work within the stated time, scope, and budget? Does the business sponsor still expect the same revenue gains or cost savings committed at project initiation? The difference between the project cost and the business benefit is, by definition, the value delivered. If the project is capitalized, then the IT leader and business sponsor should meet with Accounting monthly or quarterly to confirm that value is still being delivered. That confirms the value of the project.
Conclusion
In previous CIO roles, I exercised every process and metric described in these articles. I would have my CFO certifying the value delivered by IT. When business leaders saw what IT was contributing to the bottom line, we were given the opportunity to play a more transformative role for the business. The path from Enhance to Transform was paved with the value created by IT.
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Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management and Digital Transformation. Larry has served as CEO, COO, CIO, chief digital officer, and management consultant for public, private, international and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues.