It has value… but do you need it?

Recently, Chris Potts threw this nugget out on Twitter:

chrisdpotts

Instead of 'demand-managing' to fit an arbitrary IT budget, challenge whether your strategy needs the value an investment is promising

What a terrific comment and one that really hits home with me.  As we look to create “alignment” by showing “traceability” in Enterprise Architecture, the process models and practices that so often show up in frameworks go on and on about “demonstrating that an activity can be traced to a strategy.”  However, there is nearly no talk about what happens next… showing that the value produced by an activity is actually necessary to make the strategy come to life!

A number of years ago, I worked at a financial institution.  They were a large company, and had a fairly relaxed dress code… except my department.  I worked for one of the hundreds of Vice Presidents and his team was required to wear nice suits to work every day.  Now, I have nothing wrong with wearing a suit.  But this was in South Florida, and wearing a lot of clothing has its drawbacks, especially in the afternoon when the sun was high in the sky. 

But I followed the rules and bought suits… many of them.  Now, I could have purchased cheap suits, but my manager had a keen eye for fashion and he would not have been happy to let me make presentations to senior executives if I was not well dressed.  On the other hand, I could have bought really expensive designer suits for $1,000 or more each.  I would have looked good, for sure, but I would not have seen a positive impact on my career.

I went with nice, well tailored suits… that looked good but were not so expensive that I’d be going into debt to buy them.  $400 or so for each one.  My career was stable and my manager was happy.

If I take that metaphor and apply it to IT planning: we often find ourselves with a project that represents a $1,000 suit.  It is expensive, yet delivers moderate value.  So if I already have a closet full of $400 suits, do I buy it?  No.  Now, what if I don’t have a closet full of suits.  I need one… but do I need a $1,000 suit?  No.  I’ll cut the costs down, trimming scope and resources.

In every case, that $1,000 suit was directly traceable to my strategy (“comply with business expectations, and grow my career visibility”), but in both cases, I did not buy it. 

Chris Potts’ observation was excellent and well worth understanding.  Alignment, alone, will not insure that IT delivers value.  It is not just about delivering value.  It is about delivering the right level of value, sufficient to bring the strategy to life, without incurring unnecessary costs. 

Now… to apply this thinking to business intelligence… hmmm… :-)

Comments

• Anonymous
  June 09, 2010
  It's all in how you define "value": as relative to the recipient, not some absolute measure. A $1000 suit has a value of $1000 (or more) to some people, but a much lower value to others. Just because someone puts a $1000 price tag on it, it doesn't mean that it provides that level of value. In other words, I agree with your premise, but disagree with your choice of words. :)

• Anonymous
  June 09, 2010
  Hi Sandy, "I agree with your premise, but disagree with your choice of words. :)" You are far from the first person to make that statement :-o.  I appreciate the response and thank you for your insight.  You are right, of course,  The price of a thing is not the same as the value of a thing. I think we probably agree on this point as well: if we are presented with a project to change the business in some way (IT or not), and we all agree that the project is directly aligned with strategy, that doesn't mean that we automatically say "sure, let's do the project!"  We'd still want to spend some time to make sure that the project delivers the value that we actually need (and not much more) for the best price possible. I guess I'm thinking of the lack of visibility to that last step.  EA folks talk a lot about alignment, but the real nugget here is not just to get things aligned, but to insure that the scope of the project is not more, or less, than is needed to deliver the strategic goals.  EAs have to think about that step as well.

• Anonymous
  June 09, 2010
  That's why you want to have delivery people who are doing some sort of ROI calculation before starting projects. In counterpoint, there can be strategic value that is distinct from the value that the business unit receives, for example, to enforce standardization across an organization. Refactoring of any sort can be strategically valuable without showing direct benefit to the recipients.