The use of the term “Strategic alignment” should be banned!

A fellow speaker at a conference I was at today recommended that a IT governance approach should require hard dollar benefits for non-strategic initiatives but to be less stringent for strategic requests.  This double standard concerns me not so much for the focus on financial metrics as a primary determinant for project selection but also because it provides project sponsors or requestors with a similar “path of least resistance” to that other one I hear now and again (especially in health care): “put a regulatory spin and you’ll get it approved!”.

A good project selection process should apply a consistent set of criteria to all evaluated projects (having said this, the degree of justification or due diligence that must be presented should vary based on the scale, cost or complexity of a specific request) – if strategic alignment is a primary selection criterion, build it into the evaluation process and give it a heavier weighting!

The funny thing is that strategic alignment is very difficult to disprove – as few strategic objectives are SMART, it is easy to claim that one’s project aligns with organization strategy and the burden of evidence often lies on the side of the plaintiffs rather than the defendants.

One approach to take when introducing a new project evaluation & selection process might be:

1. Verify whether your organization does in fact have SMART strategic objectives

2. If it does, design an evaluation approach that requires any project requestor who claims strategic alignment to demonstrate specifically how their project will fully or substantially complete one of these objectives (preferably with well defined targets for key performance indicators).

3. If it does not, then define standard “value factors” that will be used to evaluate projects objectively.  The key is to pick quantitative metrics that cannot be challenged by governance committee members.  While these might vary business to business, for many they may boil down to a subset of the following:

a. Impact on profitability

b. Impact on customer retention or satisfaction scores

c. Impact on employee retention or satisfaction scores

d. Impact on market share

e. Impact on service or quality level agreements

Over time, this use of generic (but objective) criteria may act as a catalyst for your leadership to distill SMART strategic objectives.

Categories: IT Governance, Project Portfolio Management | Tags: , , | Leave a comment

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