Making Tough Decisions in a Down Economy

Demand exceeding supply is the rule of the day in a CIO’s life, and the current economic downturn is putting a further pinch on supply. When times are good, decisions come easier as more investments and
projects can be funded. But when facing a static or shrinking budget, fewer investments will see the light of day. Tough decisions need to be made, and this process is as political as it gets.

A common course of action in these situations is to reach for the chain saw and roll back funding across the board. Why? Because it’s quick, it requires little effort to identify how much overall must be shaved,
and it’s politically neutral. It enables CIOs to avoid much of the internal conflict and morale issues that arise when specific projects are sacrificed in favor of others.

In reality, the chainsaw approach to the project portfolio is far from the optimal course for any organization. In all likelihood, some programs may need increased funding to help the organization manage its way through tough times, while others should receive significantly less.

Or better yet, identifying misaligned pet projects and killing them can free up valuable capital elsewhere. The scalpel is strategically superior to the chain saw. The scalpel approach requires more effort up front in the process and it often brings the political knives out. Attractive bubble charts and sound business cases won’t be sufficient in helping make decisions because you’ll see ten sound business cases without enough resources to address half of them. This is a time-intensive process where
politics often intervene. Approached correctly, however, and these side effects can be minimized.

So what can CIO’s do? They can begin by employing a structured, robust and collaborative governance structure to address these decisions. The first step is to bring key executives together to
collaboratively determine the key objectives of the organization with regard to investments, such as ROI, security requirements, or support for critical operations. Keep in mind that not all objectives are
created equally, and they should be weighted accordingly by forcing trade-offs between them.

Once objectives are identified and given their proper weighting, the next step is to understand how each current or proposed investment contributes to each objective. A process that pulls together the right information as well as key expertise and intuition of stakeholders is required to adequately evaluate each investment. Since all projects are important, this step must also employ forced trade-offs (e.g. Does Project X contribute more to Objective A than Objective B?).

As your teams move through this process, differences of opinion will arise. This presents an opportunity that can be very beneficial to the organization beyond the task at hand. By forcing focused team
discussion around specific issues, teams gain a greater shared understanding of the organizations objectives and how they, and their projects, fit into the overall scheme of things.

CIO’s won’t come away with a solution that satisfies every individual stakeholder in the organization. But he or she will have a way forward that is objective, transparent, and strategically aligned with the objectives of the organization, increasing confidence in decisions made. Because stakeholders were involved in the decision, they gain a sense of ownership and a greater understanding of the
“why” behind the decisions made, increasing buy-in and mitigating morale issues.

====== Cheers =======

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About msetyadi

I am an IT Strategic
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