Companies are investing more in transformation efforts. According to Deloitte, companies spend an average of 7.5% of their revenue on digital transformations. How do CTOs decide which areas of the company to focus on first? How do they develop the right portfolio of initiatives to drive meaningful change today and in the future?
Prioritization is a main challenge for most transformation offices. Although many initiatives are worth undertaking, companies have limited resources and can’t support them all. CTOs have the delicate responsibility of achieving as much as possible, while selecting projects with high probability of success.
Below is our guide to helping Transformation, Strategy, and EPMO teams rank and prioritize initiatives with practical considerations in mind.
Accurately Assessing Resources
Keeping Projects Realistic
Transform Realistically by Accurately Understanding Resources
The first key step in ranking and prioritizing potential investments is understanding all the options under consideration. (See our guide for Identifying Potential Initiatives here.)
Once you understand what’s on the table, along with their business cases, the next step is to review each program or initiative to add deeper real-world contextual data. For example:
Are timelines realistic?
Are budgets sensible?
Can you achieve this initiative with the human capital currently available?
When considering budgets and potential financial impacts, business leaders must understand forecasted value delivery timelines. For example, a valuable market expansion may require an initial investment, but if you don’t have the requisite cash on hand to support such an investment now, the initiative is not immediately viable. In this case, even though the initiative could significantly increase the bottom line, you’ll need to deprioritize–or free up cash from other places to support it.
CFOs and CTOs are well versed in tracking financial resources, but employee bandwidth is a commonly overlooked resource. A company may be considering implementing a new feature that could drive $20M in revenue, but if the company only has 50 engineers who are already committed to other projects, there won’t be enough available working hours to complete the new feature. As 90% of tech leaders say recruiting and retaining tech talent remains difficult, the issue of human resources is not a trivial matter. CTOs must judiciously allocate their team members’ working availability as a resource to accurately forecast timelines, track progress, and ensure alignment across departments.
Leveraging historical data in this phase is extremely helpful: Ambitious team leads may have great confidence a certain product can launch within two quarters, but your historical data may show that your average time-to-market for new offerings is 36 months.
Choosing Projects That Are Culturally Achievable
When planning projects, it can be tempting to focus only on “hard values” — costs, revenue, potential savings, etc. A less easily measurable resource is also required to implement projects: employee burnout. For transformations to be successful in the long term, they need to be sustainable in terms of money, labor, and morale.
Many of the top reasons business leaders reconsider their investments are cultural, according to Forbes:
Misalignment with the company’s mission and values
- Decreased strategic appeal
- Internal team conflict
- Missed project deadlines
As one of our customers noted, “We have to manage the innovation pipeline. Even if we could move faster, we can’t ask our customers to change their behavior too much or too fast.”
When considering new initiatives to undertake, transformation leaders should allocate resources with employee burnout and morale in mind. Solve these culture-killers by prioritizing projects with measurable ROI, deep connections to a company’s vision, and achievable milestones. When executives focus on projects that are realistically achievable, employees are more likely to stay engaged and perform well–removing costly churn risk.
How Shibumi Helps You Rank and Prioritize Ideas
Ranking and prioritizing ideas effectively sets Strategy, Transformation, and EPMO leaders and their teams up for success. While many high-impact ideas may be proposed, selecting the right mix of ideas that can be successfully achieved is of paramount importance.
Shibumi lets you capture every idea from across the enterprise, build its business case, and rank and prioritize them, including with built-in “what if?” scenario planning. Shibumi helps ensure your portfolio of strategic investments is achievable with the resources you have–financial and non-financial. Shibumi flags these constraints from the outset, so you’re always set up for success.
One New York-based telecommunications company used Shibumi to help rank and prioritize hundreds of cost transformation efforts. The company had the ambitious goal of implementing a zero-based budget (ZBB) program, which meant that every single project had to justify the resources it used. Shibumi helped the company focus on projects that were realistically achievable and directly supported its ZBB goal. The company was able to eliminate unnecessary costs and realize more than $10B in savings company-wide.
If you’re ready to see how Shibumi can help you maximize your transformation potential in the context of your available resources, request a free demo today.