Informing and Energizing Your Investment Process

By Katrina Pugh  |  Posted 08-25-2011

IT Investment Planning: Reimagining the Process

Organizations invest in new IT capabilities to improve a variety of business factors, including revenue, market share, cost-position, security, and reputation. Many go through planning cycles with anguish, re-estimating and realigning dozens of times, using a dizzying array of budgeting methods, such as top-down, bottom-up, MBO-centered, SMART, portfolio-based, and zero-based.

No matter what the approach, IT investment planning is fundamentally a knowledge process. Yes, ego and emotions play in, but in the final analysis, it all comes down to the ability of the CIO and other decision-makers to synthesize information about how each investment will help individuals improve performance.

IT executives ask: How can we go through the planning cycle, get the performance we need, and minimize surprises?  After all, organizations spend hundreds of thousands of dollars and countless hours on figuring out which IT investments to make. Then they spend hundreds of thousands of dollars more - often just a few months later - on revising those plans. And this doesn't even take into account the negative impact of cost overruns or lost customer confidence.

Getting these dollars, and hours, under control requires reimagining your IT investment planning processes.

Investment Planning as Learning

Imagine approaching the IT investment planning cycle as a learning opportunity -- specifically, a transfer of the insights of one generation of projects, support initiatives, or installations (and their internal and external customers) to the next generation.  With this approach, we could learn about:

  • Customer segment needs, vacillations, and adoption challenges;

  • The limitations of core application languages, architectures and hardware;

  • The impact of standards and regulations; and

  • Initiative overlaps that are only vaguely (or protectively) known.

Imagine informing IT investing with minimal searches and white papers, and just a handful of focused conversations. These conversations could be aimed at drawing specific and useful insights into each planning area.

Imagine that your project shifted scope mid-stream because of vendor upgrades or unanticipated accounting requirements. Let's say that in one of these conversations you tell me that those upgrades caused headaches because of the customization the company did, and we were blindsided by the disruption it caused. You also explain to me that the accounting change is part of a set of changes being dictated by a new regulatory environment. Now, I can consider whether those events could apply to my projects before I submit my budget.

It sounds simple enough, right? Yet, for many organizations, this level of knowledge-transfer is far from routine. At best, it happens in a crisis.  Making this type of learning habitual is the purpose of the "Knowledge Jam." Knowledge Jam is a knowledge transfer method designed to ferret out insights by using facilitated conversation. Knowledge Jam entails putting together experts, such as planning or project veterans, with the people in various departments who are responsible for undertaking future investments.

Introducing the Knowledge Jam to Your IT Investment Process

The Knowledge Jam has been implemented at Intel, Fidelity, Hitachi Data Systems, the Institute for Healthcare Improvement and several other large and small organizations. Facilitators select subjects (such as investment sectors, customer segments, or application suites) with Knowledge Jam sponsors (such as budget managers).  Next, facilitators draft an agenda that incorporates representatives from the veteran teams (known as "knowledge originators") and those responsible for undertaking future investments (known as "knowledge brokers").

Facilitators convene members of both groups in a 90-minute "Jam session." The facilitator sets the tone, draws out participants' comments and opinions, and captures and validates ideas in real-time, using projection tools like Webex, LiveMeeting or GotoMeeting. Knowledge brokers then step up and take the knowledge into their planning or practices, and continue to network with the originators.

A Knowledge Jam session falls somewhere between a brainstorm and a panel discussion.  What's unique is that the conversation is directed toward a specific target application. Unlike typical knowledge-transfer methods, such as After Action Reviews and white papers, the Jam is not about capturing content for a repository, on the speculation that it could be relevant to some future unidentified user.  Rather, the focus is on informing projects, processes, products, or organization structures while they are in flight or on the drawing board. It also differs from social forums, where ideas and threads are fleeting. In a Knowledge Jam, the hard-core application of the ideas is part of the process.

Knowledge Jam Disciplines

The three disciplines of the knowledge Jam are:

  1. Facilitation. The facilitator helps select, plan, and coordinate the Knowledge Jam process, getting parties together, helping plan the agenda, providing quality control, and, most importantly, setting a tone of curiosity and respect for the conversation - a tone which invites greater flow of ideas and exploration of their applications. Facilitators model and reward respectful, open inquiry, and discourage defensive, criticizing or protective attitudes.

  2. Conversation. A conversation between those who've run or implemented projects or programs (and even their customers) with those who are shaping, scoring and rationalizing future investments brings out nuance that would never have made it into traditional documentation.  Conversation brings out context. That is, the connective material between the facts, hunches, decisions, rationales, or any of the messy stuff that makes up the art of working in IT.

  3. Translation. Involvement by brokers throughout the Jam gives them a sense of ownership. They re-mix the ideas for their context (e.g., their division, country, project or application). Translation could result in a new project template, a design spec, critical budget line items, or even a marketing protocol. Brokers use change management strategies and collaboration or social media technology (e.g., community sites, Wikis and microblogs) to ensure that the resulting knowledge gets built out, used, and amplified, and that it doesn't stagnate in a repository.

These three disciplines work together to ensure the right content and people are involved, valuable insights rise to the surface, and knowledge gets put to work across cycles of IT investment planning. The facilitation, conversation, and translation disciplines on which Knowledge Jam is founded are valuable dimensions of any planning culture. Facilitation is about matchmaking or boundary-spanning, similar to the idea of "listening posts." Conversation is about being open to the possibility of serendipitous learning - the notion that one team's cost overruns could inform another team's positioning. Finally, translation is kind of stewardship. That is, having the perseverance and garnering the executive support to drive lessons learned into future projects.

Informing and Energizing Your Investment Process

Incorporating the Knowledge Jam into the investment planning process ensures organizations get an accurate understanding of capability gaps, risks, and even the readiness of to accept change.

CIOs who foster all three disciplines - facilitation, conversation, and translation - increase their chances of managing program interdependencies and risks more effectively, adapting their organization more practically, and persevering through obstacles more collaboratively.  And, there's another bonus. The Jam process begins relationships between project veterans and would-be project participants.  These relationships continue into the year and idea-sharing will continue.

Most of us are deep in the throes of our August budgeting process. But there's still enough time to scope some Jams, assign some facilitators, and crank up the Webex or GotoMeeting. When managers fund Knowledge Jams ahead of the investment planning process, decision-making doesn't just react to today's priorities. It's informed by decades of experience. Start today, and you'll create vast improvements in your investment processes for years to come.

About the author

Katrina Pugh is author of Sharing Hidden Know-How (Jossey-Bass, Wiley, 2011), and is president of AlignConsulting, a firm that helps organizations plan business and technology change by channeling insight into action. She formerly was VP of Knowledge Management for Fidelity, Senior Technical Program manager for Intel Solution Services, and held leadership roles at JPMorganChase and PwC Consulting/IBM. Pugh is on the faculty of Columbia University's Information and Knowledge Strategy Masters Program and is on the advisory board of the Knowledge Management Institute of Canada. Connect with Pugh on Twitter and LinkedIn.