IT transformation necessitates strategic technology investments; however, determining which investments to make and when can be complicated by internal politics and competing priorities.
Government agencies face even higher stakes when it comes to IT investment decisions because of limited resources, ongoing budget constraints, and a critical mission to serve the public. Because digital transformation in the public sector has accelerated in recent years, agencies must continue to modernize IT to achieve goals such as digital service delivery, business process automation, stronger cybersecurity, and data-driven decision-making.
But on their path to progress, agencies should be weary of making ill-informed IT investment decisions. Here are the three most common mistakes they should avoid—and how to prevent them from happening in the first place.
Mistake #1: Too many IT projects
Many organizations attempt to boil the ocean by attempting to do too many things at once, but this is a recipe for underinvesting in projects that are likely to produce meaningful outcomes and overinvesting in projects that have no measurable impact.
According to a McKinsey analysis, 50 percent of products run over budget and schedule. At the same time, technical debt consumes up to 20% of an organization’s technology, so there aren’t enough resources to begin with for modernization projects. This is why it’s so critical for agencies to identify a few key strategic priorities early on and then align technology with these objectives—not the other way around. This also harnesses all the organization’s energy and focus into a few critical areas, rather than spreading its resources and budget too thinly.
Mistake #2: Internal pressure from the loudest voices
Too often, organizations make IT investment decisions not based on data or end-user feedback but rather on the opinions of a handful of key stakeholders or leaders. However, adopting an outside-in approach will benefit agencies more in the long run.
More private and public sector organizations are steadily embracing design thinking and human-centered design, which puts customers at the center of program and service design. Agencies should make an even more concerted effort to seek out and incorporate employee and constituent feedback before they make IT investment decisions, because this can help to inform their technology prioritization strategy.
Agencies need to collect qualitative and quantitative data from an array of internal and external users to clearly define the problem before seeking solutions, rather than basing their IT investment decisions on the sensibilities of a select group of stakeholders. Otherwise, they risk wasting taxpayer dollars on technologies that quickly become obsolete and don’t actually drive a better employee or constituent experience.
Mistake #3: Focusing on efficiency at the expense of outcomes
What this tells us is that many IT projects aren’t actually focused on driving specific outcomes but have broader aims like increasing efficiency or reducing costs. However, agencies can’t focus on output at the expense of outcomes.
Outcomes often tie back to an organization’s larger vision and mission, rather than check-the-box tasks or line items. Before government agencies invest in a technology solution, they need to clearly understand their “why”—what impact do they hope to make and what measurable difference do they hope to deliver for constituents? Agencies need to work backwards with their desired end goal in mind. They can then use this as a framework to make the right IT investment decisions.
How to Avoid IT Investment Mistakes: The Value of Strategic IT Portfolio Management
While incorporating design thinking, user feedback, and data can all be valuable in guiding agencies’ IT investment decisions, adopting a strategic approach to IT portfolio management can also help them make better technology decisions.
A strategic approach to IT portfolio management, supported by a comprehensive IT portfolio management platform, enables agencies to clearly see how their current systems, tools, and applications advance or hinder their strategy and goals. It allows them to achieve holistic visibility across their IT landscape to better understand how data and assets within their ecosystem interconnect, the business processes they support, the impact of potential IT changes, and how to appropriately plan and manage IT investments to maximize the impact of their organizations.
A comprehensive IT portfolio management solution supports this practice by providing the real-time data and reporting agencies need to keep track of changes in their IT environment, break down silos within their organization, and move toward a true enterprise architecture model that better aligns IT and the business.
To accelerate the pace of innovation within government, agencies can’t just adopt technology for technology’s sake. They must establish a strategic vision and harness technology as a tool to enact this vision. With a strategic approach to IT portfolio management and a platform that provides complete visibility into their IT estate, agencies can bring together their business and IT strategies to modernize their operations and drive true transformation.
Speak with one of our experts today to learn how to avoid IT investment mistakes.
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