CXO

The three-year IT roadmap is dead, here's a better way to plan

The three-year IT roadmap has long been a hallmark of IT planning, but it's outlived its usefulness. Here's how to keep up with the speed of tech innovations.

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For most of my consulting career, the ultimate objective of any IT-related engagement was to produce a three-year roadmap. These roadmaps would lay out the various systems implementations, required vendors, and the timeline, and costs associated to build it all. In the case of a large company, these roadmaps would be tens or hundreds of million dollar investments, and include a daunting array of large-scale IT projects.

Behind the fancy timeline chart, there were usually spreadsheets loaded with impressive financial calculations that would ultimately "prove" that the investment required to execute the roadmap would be offset by the benefits of the new technologies. Behind the veneer of financial authority provided by these calculations was a usually unmentioned truth: that the financial case was ultimately built on a series of educated guesses.

The decaying quality of guesses

There's nothing fundamentally wrong with educated guesses, as long as one realizes two fundamentals:

1. No matter how fancy the technology or financial model, no tool will offer 100% certainty of future outcomes.

2. As you increase complexity and time horizon, the likelihood of the predicted outcome decreases.

As an illustration, even the most sophisticated analytical models cannot predict even the direction of the stock market more than a few moments into the future.

Based on these notions, a massive investment in technologies required to produce a specific outcome on a relatively long time horizon seems rather foolhardy. Throw into the mix the increasing pace of technological change, threats from unseen disruptors, and an uncertain market, and one might be wary of placing a bet beyond what they'll eat for dinner this evening.

For a very real example, consider the oil and gas industry three years ago. With oil at $100/barrel, the assumed challenge was finding enough of the stuff, and the biggest concern was that rapidly increasing demand might outstrip global supply. There were even well-reasoned arguments that $200/barrel was not outside the realm of possibility, and hundreds of three-year IT roadmaps were created based on these assumptions. Now the smart thinking is assuming that prices will be lower for longer, and the industry is struggling with a supply glut and concern that, rather than running out of oil, global demand will peak and begin decreasing. Imagine how useful a roadmap created in 2014 is today.

SEE: Tips for building and advancing your leadership career (free PDF) (TechRepublic)

A better alternative

In this environment, it might seem like any sort of longer range planning is an exercise in futility. However, one can set a long-term direction, but keep specific investments focused on the key tenets of flexibility and short-term results. Continue collaborating with your business peers to identify where your organization wants to be in the next several years, and if you're not already doing so, consider how that destination might change based on a potential market shift. If you're "betting the farm" on a certain customer demographic or product launch, consider what might happen if it doesn't meet expectations or greatly exceeds them. Then, rather than planning specific systems and technology initiatives based on those assumptions, consider what organizational capabilities will provide you with the most flexibility.

For example, under the old roadmap style of planning, you might decide you need a CRM system and immediately embark on developing comprehensive business cases, selecting vendors, and initiating an implementation.

Instead of basing your planning on systems, consider what capabilities you need, which might be items like "Holistic view of customer interactions" or "Ability to target customers based on demographic." Rank these capabilities in terms of benefit and flexibility, using pre-determined metrics you develop in conjunction with your business colleagues. These metrics can even be something as simple as "expert opinion," and need not go to the extent of formal business case unless there's significant disagreement between stakeholders. Once you've prioritized your capabilities, determine how you can realize some concrete output in the next 120 days.

The 120-day window forces you into an Agile-style planning and execution process, and at the end of each "sprint" you will reevaluate your list of capabilities and their rank order, and determine if there are any changes, before realizing the next set of outputs. Some capabilities may indeed require large systems implementations, but if your initial approach is targeting a 120-day window, and constantly reevaluating the capabilities you're developing and the overall vision that's driving the capabilities, you'll retain significantly more flexibility than doggedly pursing a three-year roadmap.

The other significant benefit is that while your competitors are spending three to six months doing their roadmapping exercise, you're producing tangible outcomes, validating them, and adjusting accordingly. While there might be comfort in a multi-year, "big budget" plan, there are also assumptions stacked upon assumptions, and a lack of overall flexibility that's dangerous in today's rapidly shifting market, that make it worth declaring the three-year roadmap dead. With some smarter planning and shorter execution cycles, you can react more nimbly while still working toward a long-term vision.

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