To be effective,
linked to the goal
of value creation.
In the conceptual focusing matrix
(see Figure 3), the top-right-hand quadrant is designated “pearls” since it contains the most valuable candidates for
selection. The three other quadrants
are designated “oysters” (valuable yet
hard to crack), “low hanging fruit” (
easily accomplished but less valuable),
and “white elephant” (to be avoided).
This terminology facilitates communication among managers.
Top management takes the final
strategic-gating decision, deciding to
include in the realization portfolio oysters if it views them as having strategic
importance beyond the value-creation
estimate. Likewise, top management
could consider inclusion of low-hanging fruit if it considers it appropriate
for achieving quick successes.
An outside observer might doubt
whether division heads, being eager to
promote their software-solutions requests, would deliberately exaggerate
estimates of value creation. To obviate
this risk, every request for a software
solution must be backed by a business plan (or at least a mini-business
plan). In addition, the division heads
must commit to the anticipated value
creation and consequently include the
derived cash-flow estimates in their
revenue targets. A follow-up mechanism concerning how to achieve these
value-creation targets should be linked
to the organization’s key performance
indicators and incentive systems.
Waste Can Be Avoided
Research shows at least 50% of IT developers’ time is wasted11 due to the
˲ Rework due to incomplete or poorly defined needs and requirements
˲ Rework due to frequent changes
in requirements and scope up to the final delivery stages; most such changes
are not “must have” but only “nice to
˲ Software solutions developed and
delivered but eventually not used (
happens all too often);
˲ Over-specification of requirements
to include functionality and features
seldom or never applied; and
˲Having too many activities assigned to individual developers, leading to wasteful context switching
among activities (bad multitasking).
Waste cannot be totally eliminated but can be reduced significantly
through seven simple managerial practices, or remedies:
The complete-kit concept.e To avoid
waste of IT resources due to rework,
the organization, as a whole, should
adopt and implement the complete-kit concept.
10, 11 Projects should not be
approved for development if their business rationale, requirements, business
plan, or statement of work are only
partial or vague. Likewise, tasks should
not be assigned to individual developers if the requirements/specifications/
design are incomplete or fuzzy. The
content of the complete-kit definitions
for the requirements and specifications is listed jointly by the requesting
divisions and IT personnel.
Since requesting divisions must
provide complete kits of requirements and specifications, they must
understand their needs and the required software solutions. This would
minimize the extent of requirements
changes with resulting rework and
the number of projects developed and
delivered but eventually abandoned.
Moreover, implementation of the
complete-kit concept usually leads to
improved communication and collaboration between business divisions
and the IT division.
Also needed are definitions of complete kits for tasks and activities performed along a project’s life cycle; for
instance, the system-analysis files given to programmers by their managers
must contain a complete kit of information to enable them to do their jobs
properly. Likewise, files given to testers
must contain the complete kit of information to enable testers to complete
their jobs properly.
Scrutiny of software-solution requirements usually reveals a high degree
of over-requirements. Significant
portions of functionality and features
required for a software solution are
nice to have rather than must have.
In many cases IT professionals tend
to introduce over-specification and
overdesign to be on the safe side in
e The complete-kit for a task is the list of all
items required to complete the task without