Inventory of J all potential л projects j

Project definition and

Project approval

Approved project inventory

Project prioritization

Commission projects

In process prioritized projects

Project completion and review

Assess IT and corporate capacity

Exhibit 17.11 IT Demand Management Overview

Summary

IT is difficult to manage for most companies and even more difficult in professional service firms because of high expectations of management, staff, and clients. Here is a checklist of specific steps across five broad areas that can be taken in dysfunctional IT departments to improve performance:

1. Improve IT management:

Implement an IT steering committee as a virtual CIO to provide advice and leadership to the IT director and help speedily resolve issues between business and IT.

The committee should be composed of the top five to ten senior managers in the business; they should be required to attend every meeting.

Upgrade management talent in the IT department by hiring the right director.

The IT steering committee should source the candidates and hire the new director as a senior manager instead of a senior programmer.

Clean up the IT organization chart. This means no floating boxes and clean, clear lines of responsibility between applications management and operations without gaps or overlaps in coverage.

Every staff member should have a shorter-than-one-page roles and responsibilities document posted at his or her desk.

2. Add basic project management disciplines:

Establish a single, well-documented master inventory of projects.

Determine the ROI or business benefits for each project.

Projects that do not improve revenues, reduce costs, or improve control over the business should be ignored.

Prioritize projects by their benefits, difficulty, and adequacy of the current systems, generating a force-ranked list.

Determine the intrinsic project capacity of the IT department.

Limit the number of open projects to that capacity.

Expect this number to be shockingly small and disconcerting, but be comforted by the notion that the projects will actually be accomplished.

Assign a specific person from the IT department to be responsible for the management and execution of the project, and have them report progress in a five-minute update to the IT steering committee on a weekly basis.

Each team lead must develop a clear work plan for accomplishing the assigned project, with work tasks, time lines, deliverables, dependencies, and required resources clearly defined.

3. Manage vendors:

Determine which vendors are good, productive partners and which are sapping the IT budget with overbloated fees and unproductive products, services, or billable hours.

Migrate business to the former and dismiss the latter.

Insist on favorable contracts and pricing in return for vendor exclusivity.

Migrate the technology platform in the department to homogeneity to facilitate ease of management and project execution.

Negotiate hard with vendors for best pricing, and aggressively manage them after the sale.

Ask vendors how they measure their own client-satisfaction performance internally, and require them to produce a report card on themselves at reasonable intervals.

Ifthey dont know how to measure themselves internally, get them out.

Ifthey do, hold them to the periodic reporting and help them improve their services with clear feedback.

4. Fiscal management/budgeting:

Recognize that most companies must generate $10 in revenues to cover every $1 spent in IT.

Build a reputation for saving the company money by making do and reserve capital expenditure requests for must-have items. Although more difficult, IT directors must become a business resource for the senior management team by suggesting ways to lower the companys overall operational costs through use of IT.

Ifbudget variances appear, proactively explain them to senior management and provide fair warning for surprise capital or operating expenditures.

Build trust with the CFO by avoiding typical agency issues that accompany the budgeting process that give IT teams a bad reputation for being focused on the constant acquisition of new toys.

5. Improve relationship with the business:

Reduce finger pointing between IT and business users by initiating a seat rotation that has key IT staff members sitting with the businesses they support one to two days per week.

IT director should have a quota of two lunches per week with business-unit managers, functional managers, or members of the IT steering committee.