One of the challenges of IT management is to balance the enterprise portfolio with initiatives that deliver on objectives and outcomes with varying timeframes and differing investment categories. Yet this balance is key to run, grow, and transform the business now and over time.
Balancing the enterprise portfolio is important to deliver on initiatives within short (within the fiscal year), medium (1 to 2 years) and long (over 2 years) timeframes. This is part of the advice for a lean startup.
Source: Gartner PPM & IT Governance Summit 2016 - Secrets of Prioritizing IT Demand - Audrey Apfel
For short timeframe initiatives, deliver “quick wins,” so value is generated to the business as early as possible. Sometimes the results can be process efficiencies that reduce cycle time or manual tasks, or an MVP (minimum viable product) or PoC (proof of concept) so that feedback from customers can be generated as early as possible. The MVP and PoC is a greatly reduced scope or lower feature-rich product or service offering that focuses on learning from customer feedback as early as possible, with the least amount of effort.
Medium timeframe initiatives include delivering new capabilities that change what the business does and help to continually grow new products and service offerings.
Long timeframe initiatives include large transformational initiatives or programs, that transform large areas of business capabilities or business models over multiple years.
McKinsey recommends that “businesses need to explore three horizons - now, new and next” and explains similar concepts. Geoffrey Moore offers a “3 horizons model” where horizon 1 is current business within a year, horizon 2 is high-growth business between 1 to 3 years, and future growth options beyond 3 years.
In addition to timeframes and horizons for when value is realized, the enterprise portfolio should align to a set of investment categories, that help align and balance the portfolio. The table illustrates the categories with a brief description for alignment and classification.
Table 1
Category | Investment Principle | Timeframe |
Running the Business | Keep things running smoothly though Infrastructure updates and operational services | Short |
Operational Efficiencies | Productivity & cost savings through automation & efficiencies | Short |
Regulatory & Compliance | Risk assessment and management through resiliency efforts and security | Can span Short to Medium |
Competitive Differentiators | Longer term investments for areas of new services & product offerings | Can span Medium to Long |
Innovation / Game Changing | MVP, POC to experiments and R&D | Can span Short to Long |
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