The agony of choice: How to make good IT investments

Make good choices!” Jamie Lee Curtis calls out to Lindsey Lohan as she’s dropping Lohan’s character off at school in the 2003 remake of “Freaky Friday.”   If only it were that simple. If only there weren’t so many choices to be made - and way fewer alternatives - when deciding which projects your company invests in.   

The German expression “Die Qual der Wahl,” or “the agony of choice,” hits the mark (and maybe explains why I have two colors of almost every piece of clothing in my closet!). In the face of having to decide among too many alternatives one can become downright paralysed with indecision. But decide we must – and, in IT, we need to choose which business demands we are going to act on – hopefully not based on who has the loudest voice or the deepest pockets.   

How does your company decide which projects to invest in? Can you ensure that only those projects that are in support of the company strategy are executed on? Do you measure proposed projects against KPIs to facilitate decision-making? Most companies will have some kind of investment decision framework and process in place but nonetheless lack the ability to make good IT investment choices. 

This could be due to several reasons:

You can’t see the forest for the trees

There are so many projects - existing and proposed – that the decision-making process can’t be wielded effectively. In such a case, it is best to group projects into manageable portfolios, perhaps according to digitalisation priorities or required pace of change. This can also help in implementing a bi-modal approach to accelerate IT delivery.

The business context is missing

Proposed projects and even running projects need to be vetted against the business strategy and business capabilities in order to see which business capabilities need to be strengthened in order to support strategy. You should also be able to identify which projects are not supporting strategy and review these as to whether they are wasting money that could be used for strategically more important projects. Also, the project portfolios need to align to organisational cost structures. Whereas this may not be the actual business structure, it aligns the portfolios to the political reality of the company and ensures there are people with budget who can make decisions.

Lack of a healthy mix of top-down and bottom-up KPIs

Bottom-up KPIs such as ROI calculations, risk analyses on the project breakdown or impact on the architecture based on the modelling that’s been done - these are the due diligence that needs to be done to avoid problems down the line. 

And while maybe top-down KPIs such as contribution to core strategy or alignment to the company’s digital strategy may seem somewhat arbitrary, it is important to involve business peers in setting these in order to get buy-in. The last episode in Software AG’s first Alfabet Portfolio Playbooks series concerns itself with investment prioritisation – motivation, methodology and tool support. Via slides and live product demonstration, the presenter provides valuable advice for targeting IT investment where it will make a difference.   

So check out the webinar Prioritizing your digital initiatives smartly and I promise you, you will have made at least one good choice for the day.     

Paula Ziehr, Product Marketing Manager, Software AG
Image source: Shutterstock/MaximP