Common symptoms of an IT Planning Hangover include:
A lot of confusion
A bit of regret
A long-lasting headache
So said Craig Hollenbeck, Founding Partner of Proven IT Finance and Practice Leader of Value Insights managed service, during his session at last week’s ITFMA Conference in Orlando, Florida while discussing IT planning.
ITFM and TBM leaders and practitioners in the room had a good laugh at this analogy, nodding their heads in recognition of the enduring pain and agony of a poorly developed plan. Unlike that New Year’s Day headache that is gone the next day, an IT Planning Hangover forces you and your colleagues to suffer for at least a year when your IT Plan is poorly developed.
Craig defined the IT Plan as an intelligent snapshot of next year’s anticipated business demand and IT operational expenses. The Plan should drive accountability across IT Leadership for financial results. Planning is one component of the broader IT financial management cycle, which includes Actuals, Planning, Forecasting, and Service-Based Reporting.
“I’m so confused! How can that be my number?”
Confusion sets in when IT leaders aren’t involved in developing the numbers in their plans. “That number doesn’t make sense to me.” “That’s not my number.” Leaders see numbers they don’t expect…and they aren’t sure why.
To prevent this, it’s critical for IT Finance to communicate with IT Leaders in they way they think about IT. We Finance folks sometimes provide unnecessary detail that we make our IT Leaders’ heads spin. Use high level categories of spend in the language that IT Leaders speak. Communicating in this manner drives resonance, understanding and trust among the intended audience.
IT leaders need to understand the decision levers they have to affect the IT spend they are accountable for. And on top of that, they need to understand possible downstream outcomes of acting on those levers.
Think back to the situation with Delta Airlines when an outage in an operational center caused the airline to cancel 280 flights within a short amount of time, causing a loss of $100+ million in revenue. What caused the outage and the subsequent lost revenue? A failed switch…with an estimated cost of $10,000.
What if a refresh of switches had been budgeted for and executed upon? Or what if an investment of redundant switches was made? Either option, both relatively low in cost, could have prevented the resulting $100 million dollar loss. Think Delta has regrets about decisions made around their hardware investments?
Wasting away again in Margaritaville
To avoid the long-term hangover caused by a poorly developed IT Plan, work with your stakeholders to understand their stories. Are their concerns more about Build or Run decisions? Do they know what their expense footprint is and what it’s made of? Do they agree with that assessment? Why or why not? Do they understand how they can affect their footprint, using insightful and true decision levers to make the impact they want on IT investments?
Understanding the answers to these questions fosters collaboration and a more relevant plan…which leads to stakeholder ownership…which leads to stakeholder accountability. It’s a virtuous cycle that positively supports better decision making, greater alignment between IT and Finance, and ultimately, better support of overall business objectives.
Avoid wasting away in Margaritaville and suffering through a hangover that lasts as long as your plan is in place. Invest in a solid IT Planning process and its outcomes.
- IT Leaders have collaboratively developed baseline with IT Finance from which to work
- Leaders can link delivery to dollars, preventing confusion and providing accountability
- A well-built plan allows your organization to course correct and pivot to support changing priorities throughout the year