Agile IT Performance Management, Agile IT Strategy, Agility, Business success, Business value, Deming Cycle, Digitalization, Enablers, EPM, governance, Hans Gillior, IT planning, KPIs, Unpredictability, Value of IT
“The fact is that Agile IT Strategy needs a new approach, method and structure unlike traditional IT strategy work. In my work, I cracked the code of Agile IT Strategy and the result was astonishing.”
Please read first two blog posts in the series of Agile IT Strategy to gain background and insight to the framework.
Quite surprising, I am a bit allergic to big bombastic management frameworks that have the solution to all problems. My background as a management consultant and MBA graduate might give another impression. But the fact is that when I left the consulting business and entered the “real” corporate world, I had to re-evaluate my view on analysis and change. Why do we use management frameworks and what are we hoping to achieve? My conclusion was that most organizations live in a state of constant transformation and key is to acknowledge the journey within people. The framework is a tool for structuring information and analysis but the real effects where found in change management.
The Agile IT Strategy framework took its starting point from the increased digitalization and short predictive perspective on the business environment. We define the Agile IT Strategy management method based on the IT and business context, and not the other way around. High uncertainty requires a dynamic IT strategy framework. For that reason, we defined five principles for Agile IT Strategy to set the scene for working in the digital landscape:
- The IT Strategy needed to be iterated (revised) every 6 months to ensure that optimal business value was created.
- The development (and revision) of the IT strategy should take maximum 6 weeks!
- The IT strategy needs to include the minimum amount detail to provide a focused and dynamic strategic direction – and clear and effective communication, investment portfolio management and self-governing.
- Success is based on an agile culture with high degree of learning, self-governance, and trust.
- High level of engagement from leaders and employees to drive continuous transformation.
An IT Strategy framework is easy to define and design, but its value is found in how it is implemented and creates change in the IT organization. To be honest, that was my biggest challenge working with Agile IT Strategy. How to create an IT Strategy in 6 weeks? How to challenge the IT Strategy every 6 months? How to get the exact strategic focus and business outcome? How to transform ideas and methods into a way of working? How was this going to work?
The fact is that Agile IT Strategy needed a new approach, method and structure unlike traditional IT strategy work. Isn’t it the case that validity of the IT Strategy changes over time? The ideal solution would be an update IT strategies every hour or every day to ensure the optimal IT focus. It is probably not feasible but an interesting idea. Instead of a waterfall approach to IT strategy work, with start and finish date for strategy design, I looked into more agile iterative methods – based on SCRUM methodology.
The way forward was Performance Management based on the Deming Cycle (Plan/Do/Check/Act). A cycle defined many years ago to support continuous improvement and quality assurance in the production industry. Today, it is a framework for strategically managing an organization. What is interesting about the framework is that if the frequency of the Deming Cycle is increased, then we get the iterative cycle ideal for Agile IT Strategy. But if the Deming Cycle rotates every 6 months, then need to do some tasks in parallel.
Definition: Performance Management is about how to achieve of the strategic objectives by planning, monitoring and ensuring change of business systems or behavior in a (changing) business environment.
Picture 1: Enterprise Performance Management Cycle (Gillior, 2014)
The Enterprise Performance Management (EPM) matched the five principles for Agile IT Strategy in a perfect way. But the biggest challenges were how to how to get the EPM engine working in both an efficient and effective way. Frankly, we ran into all kinds of unexpected problems relating to processes, tools, leadership and competence to make the EPM cycle run in the way we intended. The solution was to defined six EPM Enablers that act as the EPM engine to drive the cycle.
Definition: The Enterprise Performance Management Enablers represent the engine in the Enterprise Performance Management framework machinery
- Conceptual Design: A design of how to carry out the activities in the PM cycle (roles and responsibilities, guiding principles, objectives, etc.)
- Processes & Tools: Adequate processes and tools to secure efficient and effective ways of working, and data quality.
- Culture & Behavior: Organizational culture and behavior (including leadership) to drive optimization of performance
- Information Flow: Efficient and effective exchange of information between different activities in the Enterprise Performance Management cycle
- Skills & Competence: The employees responsible for PM cycle activities have excellent skills and competence to manage activities
- Calendar: Ensuring that all Enterprise Performance Management activities are carried out at the right time in the performance calendar to match dynamics in industry.
The implementation of Agile IT Strategy resulted in an Enterprise Performance Management Framework supported by EPM Enablers. In our incremental implementation process, we focused on strengthening the EPM enablers for each EPM cycle step to get the full benefit of the model. We divided the cycle into a “planning cycle” running continuous (keeping the IT Strategy Pyramid updated and aligned at all times) and a “feedback cycle” measuring effects on monthly basis. The result was astonishing and created an IT Department aligned to the business challenges in the digital and unpredictable landscape. The five principles for Agile IT Strategy were achieved!
By implementing Enterprise Performance Management we learned that a couple of lessons that I need to share with you.
- Enterprise Performance Management is not something you implement all at once but rather in incremental steps. It is important to identify improvement areas where the greatest business value can be achieved. We used SCRUM methodology and scoped all implement steps in 4 weeks sprints. A reference group consisting of business and IT representatives ranked all sprints according to delivered business value.
- Enterprise Performance Management is a knowledge driven framework and hence, environmental scanning plays a pivotal role in the framework. A key success factors for us was not to limit environmental scanning to a set period but rather make it a continuous process. We always needed, at any given moment, to understand how IT evolution, business demand and industry dynamics affected our IT department.
- Focus on the people in the organization! The Enterprise Performance Management framework is going to challenge current performance and power structure to create an enhanced performance culture. Drive change management with great humility!
I understand that it is impossible to describe the full workings of the Enterprise Performance Management is a brief blog post. I have in this blog post scratched the surface of this agile management method and hopefully, I will write a book someday to describe it in detail. But until then, you are more than welcome to contact me for a more complete presentation.
- Contact The Goodwind Company for an in-depth presentation of Enterprise Performance Management and Agile IT Strategy. It will give you great insights on how to be successful in the digital era.
- Contact The Goodwind Company for a quick EPM diagnostics to understand strengths and weaknesses of your current way of working. It allows you to find the right focus areas for transforming your IT organization to optimize business value in the digital era.
- Contact The Goodwind Company to drive the Enterprise Performance Management transformation work using SCRUM methodology. It allows the IT and Business to optimize the benefits of the transformation with minimum disturbances and quick results.
Still after working with the Enterprise Performance Management framework for some time, I still not convinced that big bombastic management frameworks are the right way forward. There is no “silver bullet” that will solve all management problems. But this EPM framework worked for my organization, and it in fact delivered great business results and a new business IT relationship. It is important to understand the needs of your organization, the change in your industry and eventually find an approach suited for your conditions. Do your analysis and conclusions, and then select approach – you are more than welcome to use my way of working. It works!
– Hans Gillior