2. Assign high-performance IT professionals to the business strategy team.
It is critical that you assign IT people who have a good business orientation and think in terms of market share, top- or bottom-line impact, competitiveness, or those passionate about reducing cycle time, so that they can recommend the right IT investment needed to support the business strategy. The IT member should partner with the business project manager and help develop the capital expenditure request (ROI and cash flow impact) with benefits clearly monetized. The IT budget in many cases could be substantial, and it is important that the business project manager have a good understanding of the IT initiative and how IT can enable the overall business strategy.

My most recent assignment was with a global manufacturing company. The company had R&D facilities in India and the USA, manufacturing in China and Mexico, and suppliers from the world over. As we started transitioning our workload to India and China, it became impossible to ensure that all parties were viewing the same design documents and were fully aware of real-time design changes. This required us to completely overhaul the current employee mind-set and the available tools. So, the VP of Engineering pulled together a cross-functional team, including a business-savvy IT person to develop new processes to help address current issues and challenges. As part of this analysis, Product Lifecycle Management software was identified as a critical tool needed to help streamline the business process and provide a real-time view of the product design. In this example, the IT budget was almost the entire cost of the project, at more than 80 percent of the total. The VP of Engineering leaned heavily on the IT mentor to recommend the solution that was most cost-effective for the business.

3. The business sponsor presents the ROI to executive management.
The business project manager working closely with the sponsor should integrate the overall budget estimate requirements at the business strategy level and develop the necessary ROI justification. The IT budget should be just one of the line items, and the benefit resulting from it should be incorporated as part of overall ROI analysis. The business sponsor and the IT leader could consider jointly presenting the budget flow-through and ROI analysis. This will enable the business executives to clearly see the connection between the business strategy and the IT initiative. This approach will also eliminate orphan projects that take on a life of their own without any business ownership and ultimately end up abandoned due to budget cuts.

In this example, the vice president of engineering articulated the cost and the benefits information and presented the capital expenditure request to the president and CEO of the business. I was there to provide him support. Intense discussion on business benefits versus cost ensued, ultimately leading to the consensus that the IT project and business initiative were aligned well and all the possible contingencies had been considered.