In the investment world, there is a single principle that determines your success. The principle doesn’t require insider knowledge. It doesn’t require knowledge of reading technical charts or annual reports.
Investment success ultimately comes down to asset allocation. Modern portfolio theory holds that the 90% of your returns your choice of asset categories. For example, consider the Ontario Teachers’ Pension Plan, an organization responsible for managing over $130 billion in assets. The organization has a robust policy governing its mix of assets.
The majority of the Plan’s assets are in two categories: equities (45%) and fixed income (41%). CIOs can use a similar breakdown to guide their decisions on funding IT projects. Assigning resources to growth projects with significant risk is the IT equivalent to investing in equities. The equivalent to fixed income are “core projects” necessary to maintain the organization’s current capabilities. Managing this mix of projects is essential.
The user experience continues to loom large in every IT project. “Our goal is to create compelling solutions that our employees naturally want to use to be personally successful,” commented Steve Heck, CIO at Microsoft Canada, in an interview. In his experience, IT projects that “push out technology with a tone of user compliance, expecting adoption to happen,” are much more likely to fail. Neglecting the customer experience for an IT project can doom your project to failure, no matter the importance of the project.
The Opportunity of Growth Projects
Some technology departments have the bad reputation of being reactive. One of the best ways to fight that misperception is to launch growth projects. Growth projects are significant efforts that have the promise of significantly improving the organization. Growth projects also carry increased risks of technical failure and embarrassing the CIO if the effort fails. Despite the uncertainties, growth projects are absolutely essential. If a CIO fails to bring growth projects to the organization, your more ambitious competitors will overtake you in innovation.
The following examples show how Canadian organizations have embarked on challenging technology projects. If your industry is not represented, then you have an opportunity to bring new approaches. After all, Apple Computer didn’t start as a music retailer but it has now sold over twenty billion songs.
- CIBC won the IVIE award for payments innovation for its Tim Hortons Double Double Visa Card in 2014. The product is a two-in-one card: it functions as a traditional credit card and a Tim Horton’s payment card.
Analysis: You don’t need to build complex IT projects alone. You can work more deeply with existing partners or seek out entirely new partners.
- The Province of Ontario introduced online driver’s license renewal in 2013. This successful project, which I have personally benefited from, significantly improves the productivity of the province (one less trip to a government office!).
Analysis: Complaints about the driver and vehicle licensing bureaucracy have been around a long time. In 2013, Ontario made major progress to eliminating much of the hassle involved in renewing licenses. What process or service at your organization is overdue for major improvement?
- eHealth Ontario Shows The Challenges of Public Sector Innovation
Launched in 2008, eHealth Ontario had a challenging assignment to produce electronic health records for the province by 2015. The agency’s use of no-bid contracts and consultants have been the subject of intense scrutiny. Defending against this criticism has drawn management attention away from the agency’s primary mission.
Analysis: Pursuing innovating involves taking risks. While some corporate policies are excessively restrictive, other policies concerning financial governance serve a legitimate purpose.
As you plan your organization’s IT growth projects, be thoughtful about the risks and rewards. One way to minimize IT project risk is to adapt innovation from another sector. For example, if you are a CIO in the banking industry, investigate adapting IT innovative from telecom or retailers. You may not be the first in the world to implement a given technology but you can be the first in your industry.
Learn more from Bruce Hapham by visiting ProjectManagementHacks.com