IT Gridlock

Competing, Confusing Priorities Destroy IT Performance.

In the classic operations management parable, The Goal, the story opens on a factory ripping itself apart. It faces a mountain of late orders that all fall into one of four categories:

• Hot
• Very Hot
• Red Hot, and
Do It NOW!

Sales managers clamber for their orders to get priority. The production staff bounce from one partially completed order to the next. All the while, productivity suffers because of downtime incurred during changeovers and the entire order backlog steadily grows as losses mount.

Some Things Never Change
This scenario is the reality in IT departments across the world with the same four categories of urgency continually shifting in priority. Too often, priorities are set by the following conditions:

  1. Whatever the CEO most recently asked about,
  2. Whichever Division Head has last screamed loudest, and
  3. … well, no one has ever had time to work on anything that isn’t a 1 or 2.

Whether intentional or unintentional, many IT departments are not staffed to support the organization’s entire wish list of IT initiatives. This can actually be an effective mechanism to mitigate runaway IT expenditures, but constantly reshuffling priorities destroys value through:

  • Lost Productivity: Increased costs as staff re-familiarize themselves with the project’s requirements and status when last shelved.
  • Time Value: Increased delays between the projects’ first spending and first operating benefits reduce the investment’s NPV & ROI.
  • Reduced project benefits: The “obsolescence clock” doesn’t stop so the project’s operating life is shorter.

Business Leadership’s Responsibility
Even the best IT executive cannot effectively eliminate this turmoil. As a support function, IT is only responding to the priorities the rest of the organization places upon them. The fix must come from a council of business managers who hammer out priorities according to the strategic and financial value of each initiative.

Next, gauge the council’s effectiveness: Track the number of times projects are idled due to reassigned priorities. Under a high-performing council, this number drops dramatically (although, allowing for changing business environment, it will not fall to zero).

One last note, if the council’s priorities are frequently trumped by more senior managers, then those more senior managers should be on the council… just that threat of being dragged onto the council is often enough to temper priority demands from those senior managers!

© 2012 Verax Point

About Dave Wittenberg

I am all about equipping business teams to enjoy greater payoffs on their biggest bets. I bring a unique combination of evaluation expertise and behavioral insights developed over the course of more than 300 major strategic initiatives. Applying a highly effective, disciplined framework, teams unleash their full capabilities to generate better solutions, wring out hidden waste, and deliver superior returns. Specialties: Investment Evaluation, Decision Excellence, Strategic Analysis, Mergers and Acquisitions, Investor Relations, Leadership Development, Education & Training
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