From Concept to Benefit – Achieving Corporate Strategy

The Business Need
Sound strategic planning is fundamental to achieving business objectives. Execution of the strategy is difficult and the complexities created by out of sync and competing activities, processes, functional groups and systems across the organization create many obstacles on the road to success. Constant change, corporate politics, functional silos and many other factors affect progress toward business objectives.

A sound business plan and clearly defined goals are essential, but the key to successful execution is understanding how to accomplish those goals. This post looks at process relationships and information flow across the business from strategic planning to achievement of the strategy, from great ideas to benefits realization. To ensure the business efficiently and effectively achieves its strategy, the organization must optimize the outcomes from their processes across the entire life-cycle.

While organizations put emphasis on improvement of individual processes, improvement across processes and systems is often neglected. This big picture transformation is more difficult to tackle. Over time, standalone systems, functional stovepipes and constant change cause issues around data, communication, processes, systems and performance. While this task of analyzing and improving the full life-cycle is difficult, the results are very valuable to the organization.

The Business Issues
Virtually every organization has information fragmented in multiple repositories and enterprise applications. Many obstacles keep organizations from meeting their basic needs for efficient operations, strategic alignment and profitability. Common business issues include:
• Process Issues:
o Inefficient
o Duplication of effort and disconnected processes
o No standardization, documentation or understanding of process
o Poor metrics and poor performance
• Data Issues:
o Insufficient or bad data
o Difficulty in obtaining data
o No authoritative source of data, duplicate entry
• Technical Issues:
o Insufficient applications and infrastructure to support best practice processes
o Disparate applications and systems

The Holistic view of the full life-cycle
Strategic Planning, Portfolio Management, Project Management and Operations (with many processes under operations). All of these processes contribute to achievement of strategy, thus are critical to business success.

Weaknesses in Strategic Planning, Portfolio Management, Project Management or Operations will result in problems in the other areas as there are information feeds and dependencies between these functions. In addition, the processes in each of these major areas must be efficient and must provide quality information to the other areas. The table below provides the typical issues for each of the processes.

Function/ Process
Typical Process Issues
Strategic Planning
• Objectives not clear, not understood by the organization
• Organization is unable to interpret the strategy into what needs to be done
Portfolio Management
• Not using objective criteria for investment selection
• Selection criteria not clearly related to strategic tie and benefits realization
• Not sizing the portfolio correctly to match resource capacity to demand
Project Management
• Overlapping projects, redundant projects
• Projects not aligned with strategy and not meeting customer needs. Projects working at cross purposes
• Resource conflicts, poor project performance
Operations
• Transition process not sufficient for smooth roll-out
• Rush to get to production can result in problems after roll-out

The strategic goals are meaningless to the organization unless they are clear, understood by all and interpreted into the activities required to achieve the goals. This means that executives should not throw high-level strategic goals out to the organization with the directive to make it happen. Instead, they should have a clear idea of the major activities designed to meet the strategic objectives to ensure the organization is headed in the right direction. Leaders in Strategic Planning and Portfolio Management can work together to clearly connect the strategy with the required tactical activity.

Portfolio Management will determine the optimized Portfolio of investments based on analysis, valuation and prioritization of the business needs. To prioritize investments, a scoring model is developed based on the organization’s definition of value. The model will provide strategic alignment and will represent the benefit provided by the investment.

Portfolio reviews and analysis require up-to-date information from Strategic Planning, Finance, Enterprise Architecture, IT Governance and Project Management. Finance provides available budget information to be used in determining how many items in the portfolio can be funded. Enterprise Architecture provides capabilities and Enterprise Architect requirements used in Portfolio Management selection process while Portfolio Management provides portfolio performance to capabilities and requirements to Enterprise Architecture. In some organizations, IT Governance will utilize the investment scores to prioritize and grant funding to investments.

When funding decisions are complete, approved projects move to the Project Management process in the life-cycle. Project Management is complex and key to achievement of the business needs. Therefore, best practice processes are key to achievement of the corporate plans.

Performance Management

Performance Management is an element in each of the processes as metrics and analysis are required to ensure each area is achieving its goals and to ensure benefits realization from the system as a whole. For decision makers, Portfolio Management will provide benefits realization metrics including financial benefits. Portfolio Management measures progress toward corporate goals based on the metrics for each goal and reports this information to Strategic Planning/Executives. For each Project, metrics will be established to ensure the project team is meeting the project goals. Project Performance is measured and analyzed to develop corrective actions and ensure risks are managed. This Performance information is reviewed in Project and Program reviews to ensure Project Management performance is optimized. Performance information is fed from the Project Management system to the Portfolio Management system (and/ or the Program Management system) to allow decision making for the portfolio and programs. In Portfolio reviews, project performance is taken into consideration and failing projects may be stopped.

Building the Holistic Life-cycle Solution
How do you build the holistic life-cycle process to optimize sharing information across processes, eliminate duplication of tasks, and improve each process while optimizing across all processes? First, ensure high-level sponsorship with a clear understanding of the value of this effort from the top down. As this solution provides both strategic and tactical benefit and provides significant financial benefit, this holistic approach should be an easy “sell” to the leaders of the organization. However, the new life-cycle design may require breaking down barriers between functions and may bring major changes in governance and decision-making. Good Change Management planning can help ensure success of the new solution.

By mapping the current processes, systems and data flow, you will reveal gaps, duplications and problem areas. Analysis of this current situation will determine required improvements to establish the optimized life-cycle. Keep in mind that the goal is to improve individual processes as well as tying the processes together and developing good information flow and process coordination across the life-cycle.

This improved life-cycle will provide benefits of strategic achievement, a portfolio of investments with the highest ROI and improved efficiency across the organization. The transformation effort is not easy to achieve but well worth the effort.

How to get the Organization to see the benefit of Change

Excellent firms don’t believe in excellence – only in constant improvement and constant change.
Tom Peters

Major change is always difficult. While the status quo may be incredibly boring, we tend to feel more comfortable doing things the way we have always done them. Anything new has that huge element of the unknown. We can conjure up all kinds of horrible outcomes when management announces that change is coming. But this is the glass-is-half empty view of change. Organizations don’t implement change efforts for the sake of change. There had better be a good reason! However, it is going to take time for the majority of the people in the organization to see that good reason. A top goal for developing a solid Change Management plan is to keep business going smoothly during the project. Since change makes people nervous, it can lower productivity. So Change Management Planning is critical to the success of major endeavors. What are the key elements of a good change management plan?
1. The leaders lead the change. We have all seen plans fizzle when they didn’t have the proper executive backing
2. In planning for change, understand how the employees will view the change – conduct stakeholder analysis. Make plans for dealing with issues and risks.
3. Convey very clear actionable goals to everyone. Make sure that the value proposition is clear to everyone and relate the change to corporate strategy.
4. Think of the plan as a marketing campaign as this is the best way to “sell” the organization on the value of the improvement.

This planning is targeted at keeping business productivity up while undergoing major change. You won’t make everyone on staff happy but that is not realistic anyway!