Involving Top Leaders in IT Investment
How do you make technology investments that please everyone? Northeastern University addressed that challenge by developing a process involving senior leadership in the toughest decisions.
By Bob Weir
In a recent EDUCAUSE QUARTERLY article (Number 1, 2004), I suggested a generalized model for IT project demand management issues. This article outlines Northeastern’s process and highlights the issues and outcomes we have experienced.
Addressing the Pitfalls
There are several difficulties inherent in project demand management, and the higher education environment often presents additional complexities. First, many senior-level executives are not technologically savvy. Second, IT budgets are fixed and demand is growing. Third, more often than not, it’s assumed that a dollar spent on IT is a dollar not spent on other priorities such as faculty salaries or library acquisitions. Fourth, return on investment is impossible to reliably calculate or claim given that there is seldom a concrete way to articulate an IT project’s return. Lastly, the investment opportunities are disparate and diverse and thus, lacking a common valuation metric, they defy direct comparison.
Our straightforward, relatively simple process effectively engages senior executives and helps them lead the institution in technology project investment. With the CIO and his or her team in a consultation and facilitation role, the domain expertise and executive leadership of these individuals will allow them to make optimal technology investment decisions despite the challenges.
We start by focusing on two overriding considerations. The first is the value of the investment’s intended outcomes in terms that matter to the institution: its mission, customers, and constituencies. Just as return on investment will never be a sufficient single measure of value for higher education technology, the varied elements of value will be unique to each institution. The second dominant consideration is the probability of success and the elements of risk associated with ensuring that an investment delivers as promised. Success factors reflect each institution’s unique project track record, functional and technology delivery capabilities, and risk tolerance.
To facilitate the IT project investment decision process for the senior executives, we needed to create a common view of both the value and success criteria that we would use to define, assess, and deploy proposed projects. For this task we engaged Tom Murphy, a Northeastern alumnus and indepen-dent consultant who specializes in assisting commercial enterprises struggling with IT project demand management (see sidebar, “The Murphy Tool: Weighing a Project’s Worth”).
While the time spent building the tool was significant, there were several benefits to the process. It engaged more than 40 university leaders in a value and success discussion regarding technology project investments in the abstract, divorced from the difficulties of actual decision making; created a common perspective to view IT value and success across disparate functions, technologies, and applications; and established a concrete process for the evaluation of technology project proposals by criteria defined and adapted by the senior executives.
Putting the Tool to the Test
We first deployed this process at Northeastern in the 2002-03 academic year (determining projects for the subsequent fiscal year) and will repeat it annually. Our initial experience started in December and concluded in April, although we expect the process will require less time in future years.
Outline what’s already “in plan.” We conducted an internal review of IS projects under way that would continue into the new fiscal year, in addition to evaluating the resources required to maintain current services levels. This information allowed us to delineate for the president and his management team the projects and services that were already “in plan” and would not be considered in the project demand management process. This step also established the overall level of resources available for investment in projects chartered via the project prioritization process. The initial estimate for FY04 was that IS could handle an additional 8–12 projects depending on size and complexity.
Find all the demand you can. We met with each of the senior functional executives and their supporting IT staff to answer the question, “If IS were to dedicate all available project resources to your function, what projects would you have us do and in what order?” Through collaborative discussion, we were able to build each executive’s top 10 list with each project described in a single paragraph.
Select the most promising projects. Once these lists were established, we published all lists, supporting paragraphs, and the Murphy tool criteria for review by the president and senior executive team. In the FY04 process, we generated a list of 36 potential projects across six areas. With a capacity to tackle somewhere between 8 and 12 projects, we then engaged the president and his team in a winnowing process. We completed the initial selection in a single presidential staff meeting using a facilitation tool (see figure 1). This yielded a list of 17 projects for further analysis and consideration.
The 17 projects substantially exceeded our capacity to deliver. We asked for confirmation that IS would not address the 19 remaining projects. This was important in two ways: 1) it confirmed that the selected group of 17 was indeed the agreed priority, and 2) in the year since the selection process was completed, there have been numerous times when one of the 19 resurfaced for discussion—but a reminder that it had not been selected concluded the conversation.
An unintended but valuable aspect of this process was that the provost and the senior vice president of enrollment management and student affairs concluded that several of their projects overlapped and should be combined.
Drive articulation, partnership, and remediation. With the initial selection complete, our focus turned to creating short business plans for each proposal. We approached this by forming six teams, one for each group of projects, and assigned the president’s project to one of these groups. Each team was cochaired by a functional executive and an IS executive with the support of a project manager from the IS Project Management Office. Teams also included the functional and IS leaders and staff who would be responsible for delivery of the project if it gained approval.
The teams were supplied with a template for each project. The template outline consisted of a what section and a how section. The what section contained a statement of business need, the goals of the project, the functionality and business process implications of the project, and the associated workflow, if applicable. The how section included suggested timeline, technical/business approach, hardware/software/ services resources, and necessary staff resources. Teams kept their sponsoring senior vice president engaged for guidance in terms of project definition and delivery alternatives. Appropriately, most teams spent the majority of their time on the what phase to ensure that the project was well defined. This phase further reduced the number of projects from 17 to 14 as some projects were combined and another was dropped.
With a clear definition of the scope, business implications, and value of the project, the teams then moved to the how phase. Using the success and value questions from the Murphy tool to determine the issues associated with the delivery of the project, most teams made two sets of changes. First, they examined alternative delivery approaches, such as doing the project in phases or selecting a simplified deployment or technical option. Second, they reviewed the what definition and, in many cases, scaled the project back to improve the likelihood of success.
Build a recommended portfolio. Once all the teams concluded their work and review, we mapped the 14 projects using the Murphy comparative scoring (see figure 3).
The IS executive team began building a recommended project portfolio. The team considered factors including functional and IS staff availability, conflicts across project timelines, business cycle requirements, and required financial resources. Agreeing that some project timelines would be adjusted to flatten out resource demand peaks or resolve interproject dependencies, the IS team recommended that all 14 projects go forward. Most projects required modest (if any) incremental funding. In two cases, significant incremental funding was necessary to even begin these projects.
Confirm, adjust, and get on with it. The final step was a meeting with the president and senior vice presidents to review the recommended portfolio. Use of the Murphy tool in the what and how phases reduced the scope and risk of most projects and combined others to enable us to address 12 of 14 with limited incremental funding. These 12 projects were approved. The two projects requiring significant funding were returned to the project teams with issues and questions to be resolved before the senior executives would reconsider.
Managing the Outcomes
In the year since employing the Murphy tool and this demand management process, 11 of the 12 projects have been completed on schedule and within budget or remain on track. We attribute the success of this process primarily to the full articulation of each project before it started and to the formation of joint functional/IS teams that created each project, built the associated plan, and took direct responsibility for delivery. A closer look at one of the projects illustrates how the process worked.
During the initial phase, one of the proposed projects was an upgrade of our PeopleSoft HR implementation. The stated goal: Upgrade PeopleSoft to maintain support with minimal business process or service changes. As the joint functional/IS team worked together to complete the business plan, it became obvious through the scoring and remediation elements of the process that the original goal was insufficient in terms of institutional value, and that a far more ambitious project was required.
The initial implementation of PeopleSoft HR at Northeastern in 1999 was limited to full-time and benefits-eligible employees. Units handling part-time, adjuncts, and others maintained their own systems. This left the university with a fragmented HR and payroll service model with numerous service, personnel, audit, and regulatory exposures. While many of these were addressed with workarounds and manual processes, the situation was becoming less tenable with the advent of initiatives such as SEVIS.
The functional/IS team recommended a complete reexamination of our payroll processes and service model. The resulting project, which required a significantly larger scope and budget, now includes extensive business process reengineering, the creation of a combined HR/payroll organization and service center, the upgrade of PeopleSoft HR, and the implementation of PeopleSoft Payroll for all groups.
An unforeseen limitation of our first annual demand management process was that it was out of cycle with Northeastern’s budget process. A fully vetted, new HR implementation would cost money that had not been budgeted. Upon further review, the president approved funding of this project, with acknowledgment that in subsequent years the project selection process will tie in with the university’s budget process.
After funding authorization and an RFP process, this project is now well on its way to dramatically improving service and reducing risk to the university. Without the teaming and communication fostered by the IT project demand process, it’s unlikely that this project would have been defined, sponsored, and deployed in the near term.
Tying Dollars to Mission
The benefits of this process are significant. Constrained or shrinking budgets coupled with increased demand for information technology services are increasingly becoming the norm. Through direct senior management engagement in and ownership of the selection (and deselection) process and the approved projects, senior executives can actually tie IT dollars to mission. An anticipated long-term benefit is that, as senior executives engage in this process, they will continue to learn about the value and success aspects of IT projects and will develop a better understanding of strategic opportunities for the institution.
Tom Murphy, along with myself and Beth-Anne Dancause, a member of the IS team who would become our methodology owner at the conclusion of the consulting engagement, interviewed more than 40 leaders at Northeastern including the president, the senior functional executives, their key leaders, and others involved in IT project delivery.
Based on these extensive interviews, Murphy created a simple model reflecting each of the main value and success criteria identified as well as the associated sub-criteria with relative importance and assessment elements (see figure 4). He also developed a questionnaire for both the sponsors and evaluators of proposed projects, which would yield a relative score to be used when comparing projects contending for limited resources.
To calibrate the tool as a predictor of value and success, we used the 60-question interview instrument with functional, technical, and leadership personnel to evaluate several completed projects (we knew the outcomes, but scored the projects with the information and perspectives we had at the time of the initial investment consideration). This enabled us to score the projects and compare them (see figure 5).
The only adjustment required was in the success area of delivery fundamentals where we increased the associated points to accurately reflect our experience delivering these projects. As we continue to use the tool, we are confident that it will be valid, with only minor adjustments, for at least the next several years.
There were other equally important benefits. From an expectation perspective, high-level agreement on what we’re not going to do is almost as valuable as agreeing on what we will do. The process yielded greater IS understanding of the intricacies of higher education. In many cases the experience of working together has evolved the relationship between functional and IS personnel from “us and them” to a common “we” view. Across campus we have found people using the value/success criteria to frame their IT discussions. Additionally, there have been instances where the value criteria were referenced in non-IT discussions, since the universitywide value criteria is applicable to all types of investment decisions.
The strength of the Northeastern IT project demand management process lies in the early and in-depth engagement of all parties in a straightforward approach to decision making. The president and senior executives have a shared language, a concrete tool and process, and the expanded knowledge to make the right IT investment decisions when properly facilitated.
Author Bio Bob Weir is vice president, information services, at Northeastern University, Boston.
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