The secrets to successful IT planning: Q&A with Forrester VP and principal analyst Bobby Cameron
Recently, we hosted a webinar featuring Forrester VP and principal analyst Bobby Cameron to present "Mastering IT complexity with integrated planning." In this informational session, we discussed the fact that in firms moving towards automation and digitalization, IT is transforming from a back-office cost center to a strategic advisor for the overall company.
In this transformational context, IT planning requirements are constantly shifting to keep pace with the changing technological landscape, resulting in IT planning and budgeting becoming increasingly complex and more critical than ever before.
Following this webinar, I sat down with Bobby to further discuss the importance of planning and analytics in IT, and its role in meeting the demands of today's organizations.
How does the role of planning and analytics in IT support the overall company strategy?
Bobby Cameron: Planning and analytics in IT provides the foundation for linking what a company intends to accomplish [its business strategy] with what IT is doing to support that strategy. As a result, the role planning and analytics has in IT can change significantly, gaining in value, as a firm transforms from a traditional business to a customer-obsessed digital business.
Less mature companies focus primarily on IT’s costs, so planning and analytics help to identify areas where costs can be reduced, like eliminating duplicate technologies and identifying labor-intensive tasks that can be automated.
IT planning and analytics can help firms understand and respond to customers’ changing expectations and needs—like accelerating delivery of new capabilities, testing the customer impact of new digital business services, and validating the impact of insights-driven decisions.]
What steps do I take to embark on a journey to planning and analytics in IT?
Bobby Cameron: Planning and analytics in IT emerges through steps. To begin with, foundational work has to be done — there’s no way to avoid it, and it’s sometimes difficult.
- Step 1 - ITCM: Begin by establishing IT cost management (ITCM) — managing and recovering IT costs to meet budget commitments, both for investments and ongoing operations. This enables budget review, cost reductions, better IT cost recovery and basic definition of IT products and services.
- Step 2 - ITFM: ITCM provides the structure for the next step, IT financial management (ITFM) — providing a more direct correlation between IT spend and specific business units, business services, business capabilities and strategic initiatives.
- Step 3 - ITVM: The ultimate step of planning and analytics in IT is IT value management (ITVM) — tying IT costs to business value (which is based on the ITFM linkages). IT’s benefits accrue to the firm through IT-enabled business services, capabilities, and initiatives. ITVM provides a means of understanding the ROI of IT-based investments and ongoing operations — the overall value of IT.
What changes should I make in planning and analytics in IT as my firm’s level of customer responsiveness matures?
Bobby Cameron: Changes must occur on multiple fronts.
First, establish and maintain the overall quality of your data. Having accurate data plays a critical role in customer responsiveness. Most firms deliver ITCM at a summary or budget control level and use data reporting to address budget execution issues ensuring that it aligns with spending goals.
Then comes the timeliness of the data. ITCM mostly occurs quarterly, as part of budget reviews; however, this pace doesn’t work. As IT shifts from ITCM to an ITFM mindset, more frequent reviews are necessary—especially when business decisions start to directly address IT spend as part of overall business spend, monthly or more frequent analysis supporting intra-year spending decisions are often required. It’s at this level of business maturity that ongoing, intra-year strategic planning and investment decisions are made, with IT increasingly playing a key role in the company’s planning analytics.
The adoption of ITVM requires the greatest change in planning and analytics in IT. The ongoing measurement of investment outcomes [business results] actively guides agile software delivery's Iterative release into production. It also facilitates the use of actual operational results as an ongoing feedback loop to continuously optimize for desired outcomes. In addition, the ability to link IT’s contribution to investments and ongoing operations — and to business value through services and capabilities — proves IT’s value.
There is one change that planning and analytics in IT must undergo as the firm matures which isn’t business-value-driven. It is the ability to leverage data from expanding ecosystem sourcing, like cloud-based services and third-party innovation labs. Increased end-to-end-engagement with the ecosystem — reaching from the customer, across partners, and spanning the enterprise — becomes IT’s greatest data and analytics challenge and priority.
What is IT’s role in addressing planning and analytics for the overall company?
This is perhaps one of the most interesting changes occurring in planning and analytics in IT. The more advanced businesses are adaptive enterprises — in other words, they are able to quickly reconfigure core business investment areas like markets, products, and business units. IT provides the necessary platform for the adaptive enterprise and plays a core role in helping to drive growth through technology-driven innovation.
As a result: Planning and analytics in IT integrates with overall business planning for the company — executing in near real time to help drive smarter decisions and to expose new, disruptive business opportunities. And planning and analytics in IT helps to deliver insights at an ever-increasing speed, enabling increasingly complex decisions that connect across the company — and across the company’s ecosystem — to be made with more confidence.