“A project could deliver all the elements of the business case but not following the technology strategy increasing architectural complexity in the company. The question is whether this project is a successful project or not? “
One of the most common statements in IT governance refers to projects and how they are viewed. I often meet CIOs and managers that with a proud voice, as if they have seen the light, proclaiming that “there are no IT projects – only business projects”. It sounds quite straight forward, but what does the statement actually mean? Does the new insight actually contribute to enhanced business value?
It is a fair statement considering how the role of IT has become an integrated part business operations and support business success. It is a journey that has been ongoing for many years but the current digitalization trend has intensified the relationship. More and more industries are becoming IT intensive and in fact, the biggest threat to corporate business models comes from development in IT and technology. For example, Internet is enabling new customer channels, new competition, and business managers rely more and more on business intelligent and customer information for accurate decisions to grow business. IT and business need to cooperation to sustain the competitive edge in the future.
So, the role of IT has changed and is becoming more and more business driven. When business processes are designed or changed, IT need to designed and changed in perfect alignment. Stating that “there are no IT projects – but only business projects” make sense from this perspective. But what does it detail actually mean?
I interpret the phrase “there are no IT projects – only business project” as if the complete project is driven from a business perspective. That business is funding the project based on business needed but with, unfortunately maybe, inclusion of IT elements. It also means that the project is successful if the business requirements are delivered. This creates a pull effect on the IT organization to align its structure to the business requirements. Great!
To continue, business projects are driven by business objectives to improve cash flow, time.to-market, and customer satisfaction – defined in the business case. IT projects, on the other hand, also need to support the business case to support the value creation. But IT projects need to consider other IT specific dimensions as well to be successful. Dimensions like architecture, technology strategy/vision, methodology, operational stability and cost efficiency. The IT projects therefore need to balance between the business demand and the IT pre-requisites. A miss-match in balanced can have devastating effects on either domain. Either limited value of the business project or increased IT operational complexity and incidents.
The balance between IT and business demand also is evident in the project portfolio management. Business wants their budget to create new features to increase customer value (new development), while IT wants investments to reduce complexity and operational risk with little interest from business. Benchmarks show a correlation between the balance (approximately 70/30) of these two investment strategies and the overall IT performance (cost, risk and time to market). IT organizations focusing too much on new development will suffer in performance in long run.
Another interesting feature is that a project can be successful from a business point of view but still failing from a technical perspective. The project could deliver all the elements of the business case (for example increased cash flow) but not following the technology strategy increasing architectural complexity in the company. The question is whether this project is a successful project or not?
Well, if there only are business driven projects – then projects that fulfilling business objectives are clearly successful with limited consideration to IT impact. The described project is hence successful. This short-term behavior will cause effects in the long run with problematic operational stability problems (as IT pre-requisites are neglected)– causing diminishing business value.
So, to only view projects from a business perspective is naïve and dangerous path to follow. I have experienced this behavior at many companies and usually with the same IT complexity and stability problems. IT is later blamed for being too costly, too complex and for it stability problems. Wonder why? My point of view is that IT projects are absolutely needed as part of business projects but with a balanced focus on also aligning to the IT pre-requisites. An unbalance will cause sever problems later in the business IT relationship.
- Try to discuss with business the effects of not considering IT requirements in the long run. Also considering earmarking part of the IT project budget for reducing IT complexity and risk.
- Review IT’s role in business projects and find a balance between business and IT perspective.
The statement “there are no IT projects – only business projects” is interesting from a governance perspective. For the project to deliver business value in both short and long run, it is important to balance between the IT and business perspective of the project. An unbalance will cause sever effects on the company brand and customer value. Let us therefore re-state the quote to state “there are no business driven IT projects – only balanced IT and business projects”.
– Hans Gillior