Business Case Scoring – Template

Just wanted to share this quick business case scoring template.

 

In evaluating various business cases, individuals can score each based on the following:

– Business Justification

– Analysis of Alternatives

– Technical Alignment

– Feasibility of Implementation Strategy

– Funding/Resource Availability

The ratings are done with 1 being the lowest and 5 being the highest. 

The scoring sheet calculate average, and identifies highest and lowest scores.

Then the individual scores can be summarized and used to rank the projects in your portfolio. 

Based on overall funding, you can determine how many of the top-ranked projects are doable in the year, and then roll over the others for reevaluation along with new business cases next go around. 

Capisce? 😉

(Credit Graphic: Andy Blumenthal)

Project Governance and Gate Reviews

Thought this may be helpful for those looking at a Governance Process and Gate Reviews for project management. 

This aligns the Capital Planning and Investment Controls (CPIC) process of select, control, and evaluate phases with the Systems Development Life Cycle (SDLC). 

There are 5 notional gate reviews with associated documentation for project conception, initiation, planning, execution, and launch.

Of course, this can be modified as needed based on the project threshold and governance stringency required and seeks to create strategic alignment with the goals of the organization. 

(Credit Graphic: Andy Blumenthal)

Apples or Oranges

There are lots of biases that can get in the way of sound decision-making.

An very good article in Harvard Business Review (June 2011) called “Before You Make That Big Decision” identifies a dozen of these biases that can throw leaders off course.  

What I liked about this article is how it organized the subject into a schema for interrogating an issue to get to better decision-making.

Here are some of the major biases that leaders need to be aware of and inquire about when they are presented with an investment proposal:

1) Motivation Errors–do the people presenting a proposal have a self-interest in the outcome?

2) Groupthink–are dissenting opinions being actively solicited and fairly evaluated?

3) Salient Analogies–are analogies and examples being used really comparable?

4) Confirmation Bias–has other viable alternatives been duly considered?

5) Availability Bias–has all relevant information been considered?

6) Anchoring Bias–can the numbers be substantiated (i.e. where did they come from)?

7) Halo Effect–is success from one area automatically being translated to another?

8) Planning Fallacy–is the business case overly optimistic?

9) Disaster Neglect–is the worst-case scenario imagined really the worst?

10) Loss Aversion–is the team being overly cautious, conservative, and unimaginative?

11) Affect Heuristic–are we exaggerating or emphasizing the benefits and minimizing the risks?

12) Sunk-Cost Fallacy–are we basing future decision-making on past costs that have already been incurred and cannot be recovered?

To counter these biases, here are my top 10 questions for getting past the b.s.
(applying enterprise architecture and governance):

1) What is the business requirement–justification–and use cases for the proposal being presented?

2) How does the proposal align to the strategic plan and enterprise architecture?

3) What is return on investment and what is the basis for the projections?

4) What alternatives were considered and what are the pros and cons of each?

5) What are the best practices and fundamental research in this area?

6) What are the critical success factors?

7) What are the primary risks and planned mitigations for each?

8) What assumptions have been made?

9) What dissenting opinions were there?

10) Who else has been successful implementing this type of investment and what were the lessons learned?

While no one can remove every personal or organizational bias
that exists from the decision-making equation, it is critical for leaders to do get beyond the superficial to the “meat and potatoes” of the issues.

This can be accomplished by leaders interrogating the issues themselves and as well as by establishing appropriate functional governance boards
with diverse personnel to fully vet the issues, solve problems, and move the organizations toward a decision and execution.

Whether the decision is apples or oranges, the wise leader gets beyond the peel.

>Raising the Bar By Aligning Expectations and Personality

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I always love on the court television show Judge Hatchett, when she tells people: “I expect great things from you!”

The Pygmalion Effect says that when we have high expectations of performance for people, they perform better.

In other words, how you see others is how they perform.

While behavior is driven by a host of motivational factors (recognition, rewards, and so on), behavior and ultimately performance is impacted by genetic and environmental factors—“nature and nurture”—and the nurture aspect includes people’s expectations of us.

Like a self-fulfilling prophecy, people live up or down to expectations.

For example, studies by Rosenthal and Jacobson showed that if teachers expected enhanced performance from selected children, those children performed better.

When people have high or low expectations for others, they treat them differently—consciously or unconsciously—they tip off what they believe the others are capable of and will ultimately deliver. In the video, The Pygmalion Effect: Managing the power of Expectation, these show up in the following ways:

• Climate: The social and emotional mood we create, such as tone, eye contact, facial expression, body language, etc.
• Inputs: The amount and quality of instruction, assistance, or input we provide.
• Outputs: The opportunities to do the type of work that best aligns with the employee and produce that we provide.
• Feedback: The strength and duration of the feedback we provide.

In business, expect great things from people and set them to succeed by providing the following to meet those expectations:

• Inspiration
• Teaching
• Opportunity
• Encouragement

Additionally, treat others in the style that is consistent with the way that they see themselves, so that there is underlying alignment between the workplace (i.e. how we treat the employee) and who the employee fundamentally is.

Normally people think that setting high expectations means creating a situation where the individual’s high performance will take extra effort – both on their part and on the part of the manager.

However, this is not necessarily the case at all. All we have to do is align organizational expectations with the inherent knowledge, skills, and abilities of the employee, and their individual aspirations for development.

The point is we need to play to people’s strengths and help them work on their weaknesses. This, along with ongoing encouragement, can make our goals a reality, and enable the organization to set the bar meaningfully high for each and every one of us.

>Toward A Federal Enterprise Architecture Board

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A Federal Enterprise Architecture Board (FEAB) would provide “teeth” to further implementing enterprise architecture across government.

We have a Federal Enterprise Architecture (FEA) that provides a government wide framework for architecture strategy and planning, but we do not have a FEA Board to govern the subsequent IT investments through capital planning and investment control (CPIC). CPIC is the governance process whereby we select, control, and evaluate new IT investments.

Interestingly, The Federal CIO Council’s Architecture Alignment and Assessment Guide (October 2000) specifically calls for complementary EA and CPIC functions (see graphics).

In this paradigm, the enterprise architecture (EA) informs, guides, drives the CPIC, and in turn the decisions from the CPIC governance process updates the EA planning, so that the EA and CPIC processes are seen as mutually supportive.

In the federal government, we have departmental and agency architectures and boards that serve to plan and govern IT investments at their respective levels. However, as we seek to build greater standardization, interoperability, and reuse across government with IT initiatives that cut across traditional government boundaries driven and guided by the Federal CIO and Federal CIO Council, there is a need for a FEAB to review new and major changes to IT investments.

There would be many purposes for the FEAB.

• Strategic alignment: One would be to ensure strategic alignment not to any single department or agency mission, but rather to the greater federal government strategy and policy. Some examples of this would be data center consolidation, green IT, open government, and more.
• Streamlining of investments: Additionally, the FEAB would assess IT investments to ensure that there is no overlap or opportunities for consolidation of initiatives. OMB performs some of this function today, but a FEAB would augment their capability with IT subject matter experts from across the government.
• Other key benefits: Of course, the FEAB would also look at things like return on investment measures, risk mitigation plans, technical compliance to federal architecture standards and mandates (security, privacy, records, FOIA, Section 508, etc.).

The FEAB would not be a substitute for the EA Boards that provide oversight functions at the department and agency levels, but would provide governance for the largest and riskiest IT initiatives and those that cut across different agencies.

While the OMB currently assesses IT investments using Exhibits 300s and 53s, which include EA assessment questions, the FEAB would provide a governance board made up of cross-cutting governmental IT subject matter experts to vet these business cases from an EA perspective thoroughly and provide recommendations to the Federal CIO Council and the OMB on approval or denial. Therefore, and not unimportantly, the stand-up of a FEAB would add an important human factor to the Federal Enterprise Architecture and make it “real.”

Of course, with a portfolio of some 10,000 IT systems, the FEAB would not be able to govern every new Federal IT investment. Therefore, it would be critical to establish thresholds that would be practical for implementation.

I would envision the FEAB being chaired by the Federal Architect and the board being a recommendation body to the Federal CIO Council and the Office of Management and Budget, Executive Office of the President.

Critical initiatives by Federal CIO Vivek Kundra to effectively manage (i.e. CPIC control phase) IT investments through the Federal IT Dashboard and TechStat sessions would be augmented by the FEAB work to carefully recommend for selection (i.e. CPIC select phase) new federal IT investments.

Together, I see the federal select and control mechanisms of CPIC functioning in harmony to enhance governments IT planning, investment decision-making, and execution. Essentially, the FEA (architecture) and FEAB (governance) on the “front-end” will guide new IT investments, and the IT Dashboard and TechStat sessions on the “back-end” will ensure IT investments are properly progressing for the taxpayer based on cost, schedule, and performance measures.

In summary, the Federal Enterprise Architecture Board would be the governance arm of the Federal Enterprise Architecture, and serve as a support to the IT leadership of the Federal CIO, the Federal CIO Council, and the IT budgetary functions performed by the Office of Management and Budget.

>Decoding Decision-Making

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Decision-making is something we have to do every day as individuals and as organizations, yet often we end up making some very bad decisions and thus some costly mistakes.

Improving the decision-making process is critical to keeping us safe, sound, and stably advancing toward the achievement of our goals.

All too often decisions are made based on gut, intuition, politics, and subjective management whim. This is almost as good as flipping a coin or rolling a pair of dice.

Disciplines such as enterprise architecture planning and governance attempt to improve on the decision-making process by establishing a strategic roadmap and then guiding the organization toward the target architecture through governance boards that vet and validate decisions based on return on investment, risk mitigation, alignment to strategic business goals, and compliance to technical standards and architecture.

In essence, decisions are taken out of the realm of the “I think” or “I feel” phenomenon and into the order of larger group analysis and toward true information-based decision-making.

While no decision process is perfect, the mere presence of an orderly process with “quality gates” and gatekeepers helps to mitigate reckless decisions.

“Make Better Decisions,” an article in Harvard Business Review (HBR), November 2009, states, “In recent years, decision makers in both the public and private sectors have made an astounding number of poor calls.”

This is attributed to two major drivers:

Individuals going it alone: “Decisions have generally been viewed as the prerogative of individuals-usually senior executives. The process employed, the information used, the logic relied on, have been left up to them, in something of a black box. Information goes in [quantity and quality vary], decisions come out—and who knows what happens in between.”

A non-structured decision-making processes: “Decision-making has rarely been the focus of systematic analysis inside the firm. Very few organizations have ‘reengineered’ the decision. Yet there are just as many opportunities to improve decision making as to improve other processes.”

The article’s author, Thomas Davenport, who has a forthcoming book on decision-making, proposes four steps (four I’s) organizations can take to improve this process:

Identification—What decision needs to be made and which are most important?

Inventory—What are the factors or attributes for making each decision?

Intervention—What is the process, roles, and systems for decision-making?

Institutionalization—How do we establish sound decision-making ongoingly through training, measurement, and process improvement?

He acknowledges that “better processes won’t guarantee better decisions, of course, but they can make them more likely.”

It is interesting that Davenport’s business management approach is so closely aligned with IT management best practices such as enterprise architecture and capital planning and investment control (CPIC). Is shows that the two disciplines are in sync and moving together toward optimized decision-making.

One other point I’d like to make is that even with the best processes and intentions, organizations may stumble when it comes to decision making because they fail into various decision traps based on things like: groupthink, silo-thinking and turf battles, analysis paralysis, autocratic leadership, cultures where employees fear making mistakes or where innovation is discouraged or even frowned upon, and various other dysfunctional impediments to sound decision-making.

Each of these areas could easily be a discourse in and of themselves. The point however is that getting to better decision-making is not a simple thing that can be achieved through articulating a new processes or standing up a new governance board alone.

We cannot delegate good decision-making or write a cursory business case and voila the decision is a good one. Rather optimizing decision-making processes is an ongoing endeavor and not a one-time event. It requires genuine commitment, participation, transparency, and plenty of information sharing and collaboration across the enterprise.

>Leading Through Planning

>Recently, I was reminded of two pointers in developing an effective IT strategic plan:

1. Strategic planning is about leadership and setting direction—There is an interesting saying with respect to this that the manager ensures that you do things right, and the leader ensures that you do the right things. The strategic plan, including the vision, mission, and value statements are about leadership establishing and communicating what the ‘right thing’ is. An effective metaphor for this is that the manager ensures that you climb the ladder, but the leader ensures that the ladder is up against the “right” wall.
2. Strategic planning goals, objectives, and initiatives have to be aligned and actionable —that means that you need to set the strategic plan elements at an appropriate level of detail and in cascading fashion. One way to do this is to navigate up and down between goal, objectives, and initiatives in the following way: To navigate to a higher elements of the plan hierarchy, ask why. Why do we do XYZ? To navigate to lower levels of detail and specificity, ask how. How do or will we do XYZ.

Together, these two guidelines help to develop an IT strategic plan that is both effective in terms of goal setting and organizational focus as well as at the appropriate levels of detail and alignment to be truly actionable.

>Executives, One Foot In and One Foot Out

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The last thing any executive should be doing is getting caught up in the weeds of management. The executive needs to lead and define the organizational strategy and the management team needs to execute. The executive is the link between what needs to get done (stakeholders’ needs) for the stakeholders and getting it done (management execution) through the organization’s people, process, and technology.

How does the executive perform this linking role?

Not by looking myopically inside the organization, and not by jetting around the globe shaking hands and kissing babies. Peter Drucker said “ The chief executive officer (CEO) is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers. “

In Harvard Business Review, May 2009, A. G. Lafley the CEO of Proctor & Gamble see’s that the CEO’s job is to “link the external world with the internal organization.”

The executive is the bridge between inside and outside the organization. And by having one foot in each, he/she is able to cross the artificial boundaries and bring vital stakeholder requirements in and carry organizational value back out.

Lafley breaks down the CEO’s role into four key areas, which I would summarize as follows:

• BUSINESS SCOPE: Determining “the business we are in” and not in.  No organization can be everything to everybody. We need to determine where we will compete and where we will withdraw. GE’s Jack Welsh used to insist on working only in those markets where GE could be either #1 or #2. Drucker’s view is that “performing people are allocated to opportunities rather than only to problems.”
  
• STAKEHOLDER PRIORITIZATION: “Defining and interpreting the meaningful outside”–this is really about identifying who are our stakeholders and how do we prioritize them?
  
• SETTING THE STRATEGY: Balancing “yield in the present with necessary investment in the future.” Genuine leaders don’t just milk the organization in the short term, but seek to deliver reasonable results immediately while investing for future performance. Lafley states “We deliver in the short term, we invest in and plan for the midterm, and we place experimental bets for the long term.”
  
• ORGANIZATIONAL CULTURE: “Shaping values and standards.” Lafley argues that “the CEO is uniquely positioned to ensure that a company’s purpose, values, and standards are relevant for the present and the future.” Of course, the culture and values need to guide the organization towards what matters most to it, to meeting its purpose, and satisfying its stakeholders.
  

To me, the Drucker-Lafley view on the CEO as a bridge between boundaries inside and outside the organization, can be extended a step down in the organization to other “chief” roles. The CEO’s vision and strategy to deliver value to the stakeholder to the role is fulfilled in part by the chief information officer (CIO) and chief technology officer (CTO). Together, the CIO and CTO marry needs of the business with the technology to bring them to fruition. Within the organization, the CIO is “outward” facing toward the needs of the business and the CTO is “inward” facing to technology enablement. Together, like two sides of the same coin, they execute from the IT perspective for the CEO.

Similarly, the chief enterprise architect (CEA), at the next rung—supporting the CIO/CTO, is also working to span boundaries—in this case, it is to technically interoperate the organization internally and with external partners The chief enterprise architect works to realize the vision of the CEO and the execution strategy of the CIO/CTO.

The bridge the CEO builds links the internal and external boundaries of the organization by defining stakeholders, scope, business strategy, and organizational culture. The CIO/CTO build on this and create the strategy to align business and technology The CEA takes that decomposes it into business, information, and technological components, defining and linking business functions, information flows, and system enablers to architect technology to the business imperative.

Three levels of executives—CIO, CIO/CTO, and CEA, three bridges—inside/outside the organization, business/technology sides of the organization, and business process/information flows/technologies within. Three delivery mechanisms to stakeholders—one vision and organizational strategy, one technical strategy and execution, one architecture plan to deliver through technology.

>IT Planning, Governance and The Total CIO

>See new article in Architecture and Governance Magazine on: IT Planning, Governance and the CIO: Why a Structured Approach Is Critical to Long-Term Success

(http://www.architectureandgovernance.com/content/it-planning-governance-and-cio-why-structured-approach-critical-long-term-success)

Here’s an exrcept:

“IT planning and governance undoubtedly runs counter to the intuitive response—to fight fire with a hose on the spot. Yet dealing with crises as they occur and avoiding larger structures and processes for managing IT issues is ultimately ineffective. The only way to really put out a fire is to find out where the fire is coming from and douse it from there, and further to establish a fire department to rapidly respond to future outbreaks.”

>IT Planning, Governance and The Total CIO

>CIOs are consumed by day-to-day tactical/operational IT issues and firefighting IT problems, and as a result, there is a lack of focus on IT planning and governance—two of the biggest problems facing CIOs today.

ISACA, an organization serving IT governance professionals, conducted a survey consisting of 695 interviews with CEO/CIO-level executives in 22 countries, and published the results in IT Governance Global Status Report 2006.

Here are some of the amazing findings from this study.

Firefighting predominates: “Organizations are suffering from IT operational problems…only 7% of the respondents experienced no IT problems at all in the previous year…Operational failures and incidents…are mentioned by approximately 40 percent of respondents.”

IT’s alignment with Business is weak: Only 56% of the organizations surveyed “understands and supports the business users’ needs.”

Strategic Planning is underrated by CIOs: “More than 93 percent of business leaders recognize that IT is import for delivering organization strategy…Somewhat paradoxically, general management perceives the importance…slightly higher than does IT management.” In fact, in the public sector, IT was viewed as a commodity versus strategically by 47% of respondents!

IT governance is lagging: “CIOs recognize the need for better governance over IT,” to align IT strategy and manage risks. Yet, “when asked if they intend to do or plan IT governance measures, only 40 percent replied in the affirmative.”

Liza Lowery Massey, who previously served as CIO of Los Angeles, says in Government Technology, 9 July 2007:

“Establishing IT governance up front is the No. 1 thing I would do over in my career. IT governance is crucial to a CIO’s sanity.

Further, Liza wrote in Government Technology, 14 April 2008:

“Now when I help my clients implement IT governance, I see the benefits firsthand. They include shrinking your IT department’s to-do list, achieving IT/business alignment, putting teeth into policies and standards, and focusing departments on business needs rather than technology. My work life would certainly have been smoother had I set up governance to address these issues instead of trying to handle them all myself.”

CIO Magazine, 1 November 2006, has an article by Gary Beach, entitled “Most CIOs Fail to Convince Top Management That IT Can Transform Business.”

In this article, Gary notes that the rate of investment in IT is half the rate of corporate profit growth, and he asks why?

Certainly, the failure to align with business, and effectively plan and govern IT is hindering CIO’s ability to succeed.

The unfortunate result, as Andy McCue reported in Silicon.com on 26 April 2007, is that “CIOs and the IT department are in danger of being relegated to the role of support function because of a lack of vision and technology innovation.”

The answer is clearly for CIOs to “stabilize the patient” and get out of firefighting mode, and allocate sufficient time, attention, and resources to IT planning and governance. Only in this way will CIOs effectively align IT with business requirements, solve genuine business problems, innovate and transform the enterprise, and fulfill the strategic role that the business is looking for from them.