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After having addressed, in my previous articles, the different aspects of the Business’ Expectations, the IT Skillsets needed and the IT team’s positioning in the company, as well as the shared understanding between these traditionally opposing two camps, I would now like to turn my attention to how complex IT decisions ought to be approached.
Traditionally the Information Technology budget follows prescribed patterns. Generally speaking, these budgets are regularly tightened while new funds are only made available when there is a clear and pressing need for an upgrade, or some new functionality is required by the business. More often than not these latter decisions are then made by the respective business leaders without the prior input from the IT team.
Now while a business unit manager with extensive experience may be the ideal decision-maker on developing new products, without a firm grasp on current and future technology capabilities and the opportunities these represent for your organisation this same individual is not sufficiently equipped to effectively plot the IT strategy and technology roadmap which will be most beneficial to your business and much less so able to decide on the implementation of any initiatives.
Once formulated, the IT strategy has to be converted into good, actionable steps to achieve the intended outcomes. This process is called the IT planning process and is usually performed by the IT function in alignment with the corporate strategy and planning process. It should mostly focus on supporting the business goals of the various business functions.
The thoroughness of this phase directly affects the IT spend approval process which aims to ensure that the limited funds made available to IT are allocated to the most beneficial initiatives depending on the specific business needs of the organisation.
After all, even the best systems and processes still rely on people to make the final decisions on how investments into technology are allocated. Having the right decision-making structure, one in which both the business leaders and technology experts are directly engaged, ensures that these funds go towards the most appropriate operational and growth initiatives.
Traditionally, and still today in businesses with a low business IT maturity level, it is typically the financial leader who makes the final spending decisions and more often than not they are mainly made on the basis of cost.
We are currently seeing a different structure emerge once one takes the business value of IT seriously, in which the IT leader is of sufficient seniority to control and direct the allocation of operational funding themselves.
The various business leaders in turn control future IT spend with their own growth initiatives in mind, closely guided and advised by IT to ensure that decisions are made on the actual capabilities of the technology being considered.
This organisational design allows business leaders to focus on business while IT leaders tend to IT, but with shared objectives, ensuring that in the end both camps are enabled to perform optimally while relying on the capabilities of the other to support their own efforts as a unified team.