30
One List to Rule Them All
It's quiz time again: what's the #1 IT project in your company? I'm sure you got that right. Now they get a bit harder: what's the #7 IT project in your company? #10, #15, #25? You're only able to answer these questions if you have a ranked priority list.
Having a written, ranked priority list for all IT projects creates both clarity and alignment. By aligning your efforts toward the #1 project, you significantly improve the chances of succeeding with the work the company has deemed most important. When a person frees up, instead of starting the next project, apply them to the highest-ranked project. This is known as swarming. When assigning staff to projects, put your best and brightest on the top projects. Doing so creates opportunities for your stars, and it further improves your chances of success. As a CIO, your time to attend meetings is limited. Use the ranked list to decide where to spend your time. If a project isn't on the list, don't unintentionally sanction it by attending a discussion or vendor demo on the topic.
A lot of organizations rank priorities. A great example is college football. There are 130 teams in the Division I college Football Bowl Subdivision (FBS). Only four of these teams make it to the playoffs each year. College football uses a ranking system to determine the best teams. This is not unlike your project list. It's easy to get a list of 130 or more items, even in a medium-sized IT Department. An enlightening and fun exercise is to have your executive team independently rank your projects from 1 to 25 the same way college coaches rank teams.
Create Your List
The first step is to list the top 30 or so projects. I'm not talking about your must-do projects, like mandatory upgrades; I'm talking about value-creating ROI projects. We'll get to the “required” projects later.
If you don't have a list, or you have several lists, the IT leaders and PMO can make the first attempt. As I mentioned, everyone probably knows what the top few are. Put those on the list. Then list every project that is in-flight. Common sense would dictate that if a project is underway, it's more important than a project that hasn't started.
Rank Your List
Now we're going to employ a super-simple ranking tool. As you become more advanced, I recommend following a more sophisticated process called weighted shortest job first (WSJF), but let's start here. For each project, estimate the cost and the benefit. The benefit can be net positive cash flow, net income, or EBITDA. Whichever you choose, use the same metric for each project so you can compare disparate initiatives. Now divide the cost by the benefit to derive the relative value. Here's an example:
- Project A costs $100K and delivers $500K. Relative value = 5.
- Project B costs $100K and delivers $200K. Relative value = 2.
- Project C costs $300K and delivers $200K. Relative value = 0.66.
Use the relative value to initially rank the list. Distribute the list to your executive team and ask them to individually re-rank the projects from 1 through 25. Don't accept ties or “they're all number 1” as an answer. There can be only one number one. Also send your business objectives and business strategy documents. This will ensure that the executives consider alignment with business goals while they are ranking the projects.
Create a Standard Deviation Report
Once the results are back, create a standard deviation report. This will show you how far from the mean the leaders are for each project.
As you can see from the example shown in Figure 30.1, everyone agreed that project A is the #1 project in the company. It's a clear winner, and there is no deviation. Project D needs more discussion: the CEO has it at #5, while the CFO has it at #2. When the deviation is zero across all of your projects, you have accomplished complete alignment.
Figure 30.1: Example Project Ranking Worksheet
Communicate Priorities
It may take several rounds to get full alignment on your prioritized project list. Detailed estimates, in-depth ROI calculations, and heated discussions are part of the process. Once it's completed, shout the results from the mountain tops. Email the list to the officers in your company. Remove the numbers first, and then email the list to directors and managers across the organization. It's not a secret where their project is slotted on the list. Post the ranked list on the walls; and for our remote colleagues, post it on a virtual wall. Make it very clear: if it's not on the list, we aren't doing it. No more side projects. If an unlisted project gets started by a rogue executive, put that project near the top of the list, bump everyone else down, and communicate what happened.
Inside the IT Department, review the list in detail with everyone on the team.
Cumulative Total
Instead of starting with an annual budget and then seeing which projects will fit into that budget, list your projects on a spreadsheet in priority order, add the estimated cost of the project, and then add a cumulative total column. Create the list regardless of the budget. When the budget is established, simply draw a line at that point on the cumulative total. If you get more funding, move the line down, and the next project is included. If you get less funding, move the line up, and the lowest-ranked project will simply move into next year. Update the cost numbers monthly as actual results occur and more accurate estimates are created. This process will ensure that you never go over budget (in total) and that if you are tracking ahead on your budget, you will be prepared to take on the projects that were previously below the line.
Operationally Required Projects
Every company, regardless of industry, has a series of projects that are must-do and projects that are should-do. Must-do projects usually involve regulatory requirements. If you are required to send a new report to the federal government starting on January 1, creating that report becomes a must-do project. Should-do projects include things like upgrading an unsupported operating system and cyber-security initiatives. You really should do these projects; however, you don't have to. It becomes a risk management exercise.
In both cases, these are projects without a return on investment. I list these projects on a separate tab in the priority list and call them operationally required (OR). OR projects are reviewed and approved by the OR subcommittee. This committee consists of the CIO, the chief counsel, the controller, and the CFO. If you have an internal audit team, I recommend inviting them to the meeting, but their rules of impartiality mean that they shouldn't get a vote.
The OR subcommittee's job is to rank and prioritize these projects and indicate which ones are must-do. OR projects take precedence over all ROI projects. Label the first line of your priority list “operationally required” and bring the total approved forward. This becomes the starting amount in the cumulative total column. Every company needs to fund its must-do projects. If funds are tight, this may be all you do this year. Each should-do project needs to be evaluated based on the risk of not doing it. Going off support on a minor system may be worth the risk to the company. After funding the OR projects, the remaining investment funds will be dedicated to ROI projects.
Be Ready for Line Jumpers
People are smart, and if the formal process doesn't get their project on the list, they will deploy tactics to cut in line. Table 30.1 shows some of the common themes used to cut in line and my response to each of them.
Table 30.1: Responses to Line Jumpers
| Tactic | Response |
|---|---|
| This is a departmental project, not an enterprise project. | We have one list for our entire company; every project that requires IT resources is included. |
| My project is not considered a capital investment, so it should be excluded. | We evaluate all projects based on their merits, not the accounting treatment. |
| This project is important to the CEO. | Good news, then; she's on the priority committee. |
| This project is small; it shouldn't go on the list. | We have a mechanism for handling small items within larger approved projects. |
| My project is a must-do project. | Bring it to the OR subcommittee. |
| My project has no ROI, but we should do it anyway. | Ask the CEO for an override—the CEO has the final say on the list regardless of the ROI. |
If other executives have not bought into the process, they may approve a project regardless of the priority. If an unapproved project gets started, immediately put it as number one on the list, and let everyone know there is a new number one. Remember, all in-flight projects have a higher priority than every not-started project. If not, then why are you working on it? Talk to the executive and reaffirm the importance of the process. Let the other executives know that the line-jumper has delayed their projects. Hold an off-cycle priority meeting to discuss the impact. Over time, buy-in will improve, and line-jumpers will understand and support the ranked list.
Moving Forward
Once the list is created, it becomes easy to maintain. Hold a quarterly priority meeting and adjust the rank as necessary. Once a project is started, it can no longer be re-ranked. This causes thrashing, rework, and unwanted productivity killers. Compare the list to waiting in line for a roller coaster. You can bribe your way to the front of the line, or you can slip to the back. You can ask your friend to let you go ahead, or you can let your friends go ahead of you. You can even chicken out and ride the Ferris wheel, instead. However, once you sit in that seat and strap yourself in, there is no way off the ride until it is finished. There will be scary moments and moments of joy—when the ride is over, you'll feel elated and ready to conquer the next one.
Projects are like roller coasters, with ups and downs. With a ranked priority list and a solid WIP limit, we're ready to strap in and get our projects completed successfully. In the next chapter, we'll cover methods and processes to ensure that IT is doing everything it can to maximize value creation for your company.