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Deciding where and how to invest IT resources is a tough—and sometimes contentious—process. Analytics tools can help determine strategic IT/business alignment with more practicality and less rancor.
The technology tributaries winding through the enterprise ultimately end up in IT. It therefore comes as no surprise that IT, above all other departments, is continually tasked with accomplishing a plurality of mission-critical initiatives with a finite pool of resources that can't possibly get all projects completed in the timeframes desired by their sponsors.
CIOs recognize this. They also understand the political risks of satisfying some users at the expense of others. To deal with the situation, they meet with department and business unit leaders throughout the enterprise to set IT priorities, typically before the next budget cycle.
"Inevitably, conflicts arise because different line of business and departmental managers see IT priorities differently," said John Saaty, CEO and co-founder of Decision Lens, which provides decision analytics software that aligns the IT portfolio and its projects with business strategy. Determining the best path toward achieving company objectives with IT is also more important than it has ever been before, as CIOs continue to get pushed to deliver results that are both strategic and transformational to the business.
Decision Lens offers a cloud-based, software analytics approach to this often difficult phase of mediation, where some IT projects get prioritized and others don't.
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"The idea actually began in political negotiations with my father, who as a mathematician developed decision concepts for conflict resolution back in the 1970s," Saaty said. "My father began using the technique when he headed up one of the first nuclear disarmament negotiation teams for the US with the Soviets. What he discovered was that US arguments for nuclear disarmament were largely financial, whereas the Soviet concerns were more focused on presence at geographical locations and climate issues.... The task in negotiation was to find a middle ground."
IT faces a similar challenge. It must mediate between stakeholders in the business to arrive at a plan of attack that places some projects before others.
The Decision Lens software enables stakeholders in IT projects throughout the business to key in what they feel are the critical strategic priorities, the IT projects that need to be undertaken to achieve those priorities, and what they think the ultimate business returns on investment will be. The software then takes stock of all IT projects and assets (hardware, software, staff, etc.) and develops analytics that rate the projects based on how closely they align with enterprise business objectives and likely ROI.
"Setting project priorities is something that CIOs have been doing all along," Saaty said. "Only now we are providing a collaborative, cloud-based analytics tool where stakeholders can weigh in on what they feel the business priorities are, what systems are needed, and what the return is likely to be." After this point, the software has its own algorithms that chug through the raw data and enable the enterprise to model different scenarios of project scheduling.
"Participants see a quantitative scoring of all IT projects," Saaty said. "This helps them align with what is best for the company—even if it means that their own projects won't come first." For the CIO, the tool also brings relief. In the past, it was the CIO who had to break the news on which projects got premier billing and which were scheduled for later.
"Using analytics to determine the IT strategic alignment and priorities is new to many businesses, which is why we begin with a small proof of concept," Saaty said. "When the business rules behind the software are entered by the organization, we look for input at two levels: the strategic stakeholders like the CEO, CFO, and others; and the project personnel who are the closest to the projects. The proof of concept is designed to show CIOs and others in the organization how the analytics work and how they can be used proactively for the organization."
SEE: Big data policy
In one case, a large manufacturer with a two-billion-dollar IT budget wanted to find where it was making redundant investments in IT. It used the mediation software and uncovered 100 million dollars in savings. On second and third passes with the analytics, it identified several hundred million dollars in additional investment savings.
"This is the approach we recommend," Saaty said. "Organizations should pick off a small piece of IT, model it, and try the analytics. As they gain experience with it, they can scale it up to a larger portion of the IT portfolio."
For CIOs tasked with revisiting priorities, IT project schedules, and the IT budget on an annual basis with internal stakeholders who often have conflicting opinions of how work should be done, an analytics tool can be a nice addition. Analytics night not answer every question, but it can help tackle one of the most difficult negotiation processes in enterprises—determining what IT should do next.
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