Courtesy of Software AG's, Conrad Langhammer wrote a synopsis of her speaking session discussing 'Keep your eye on the prize - use EA to focus IT investment on business innovation'.
Business initiatives bubble-up from all over an organization. This, in addition to those initiatives that are ordained top-down, can lead to a long list of demands or – if it gets that far – an overloaded IT investment portfolio. This is to the detriment of truly important investments – those that target business innovation and market differentiation. In the face of having to decide among too many alternatives one can become downright paralyzed with indecision. But decide we must – and in IT, we need to choose which business demands we are going to act on – hopefully not based on who has the loudest voice or the deepest pockets. IT investment must be in support of the business strategy, yet studies show that 80% of project management executives don’t know how their projects align with their company’s business strategy.
Why is proper management of the IT investment portfolio so important for business innovation? These reasons are top of mind:
- The times are dictating an urgent need for innovation for a business to succeed in the market. IT investment needs to support this.
- Business disruptions that syphon off funding for IT are happening all too frequently. Yet, we learned in the pandemic that innovation helps companies survive severe disruptions. IT investment targeting innovation needs to be pegged as “sacrosanct”.
- The demand for IT speed and agility in fast-moving markets means two things: 1) you need an established methodology to quickly identify where and when to invest and 2) you need to keep a lean project portfolio, managing it in a way that lets you quickly change priorities when strategies change
- In pursuit of bringing digital products and services to market, Agile prevails and thus the mantra of the minimum viable product (MVP). Yet there is a trade-off between MVP and mounting technical debt. Good IT investment management can help you find the right balance.
- Reports show that there are falling returns on IT investments that target efficiency (productivity gains) rather than effectiveness in achieving business outcomes. The IT investment portfolio needs to be populated with projects that realize increased revenues and market share – often through innovation.
So, there is reason enough to strive for a business innovation-aligned IT investment portfolio. And enterprise architecture (EA) combined with strategic portfolio management (SPM) can help you get there. SPM is the ongoing process that focuses and aligns a company’s IT resources with its strategic business goals. It includes integration between the project portfolio and the enterprise architecture, enabling decisions on investment portfolio optimization in the context of business and IT strategy and in consideration of cost and risk implications. This overall organizational alignment between strategic goals, tactical actions and IT support ensures directed IT spend, faster decisions for IT implementations and resource usage, and the ability to realize digital business initiatives in a scalable, cost minimized manner. This will lead to competitiveness in the digital products and services market – the prize can be yours!
About the Author
Conrad Langhammer,
Vice President,
Software AG.
Conrad Langhammer leads Software AG’s Alfabet product line. He is responsible for product strategy as well as the planning and execution of Alfabet’s go-to-market initiatives, solution design, professional services and customer success management.
Mr. Langhammer has held senior software and services positions and built world-class business development and consulting teams. He has more than 20 years of experience in enterprise architecture, IT finance and program portfolio management as well as Agile methodologies. Mr. Langhammer has degrees in chemistry and business administration from the Free University of Berlin.