So you have an IT strategy and you have your year-on-year plans in place but you are just not delivering the pace of digital transformation your business needs. Sound familiar? If so, you may want to consider incorporating horizon planning into your IT planning processes.
Traditionally, companies have developed 5-10 year technology strategies to support their organisational transformation cycle and then utilised normal planning and budget cycles to implement the strategy. However, like farmers, IT executive teams are beginning to realise that they must broaden their focus to simultaneously harvest the current crop, till the ground for next season, and investigate new crops for the future.
In an IT context, the three horizon cycles can be considered in the following context:
Run cycle– managing operations in the current fiscal reporting period
Change cycle – onboarding the next generation of agreed enhancements and technology solutions
Transform cycle – designing the future technology solution to support the organisations strategic direction
Realising investments in the transform horizon and moving them through the change horizon to operating in the current cycle is critical to the successful delivery of digital transformation that is closely aligned to and enables organisational priorities and outcomes. This can however be difficult to achieve with the traditional organistaional planning, reporting and budget cycles focusing on the current fiscal year. In addition, governance and risk frameworks are also often structured around the current fiscal year and often have difficulty adjusting to the needs of horizon planning cycles.
Critically, freeing up funding from the run cycle to invest in the change cycle is also essential to successfully transitioning the transformation agenda into operations. Again, this can be easier said than done in the context of annual budgets and reporting, and without the governance and oversight of an enterprise investment board who is able to take a view beyond that of the transform cycle.
It is also important to ensure that your operating model supports each of the cycles across run, change and transform. Often, run managers are asked to also take on the change agenda whilst the R&D of the transform cycle operates independently. Implementing an operating model that equally recognises, values and supports the run, change and transform cycles creates an eco-system that allows for and encourages interaction between each of these cycles both in the planning and their operation. In this way, run is able to adapt to the change agenda and the transform agenda is able to inform the change agenda, creating a more integrated, cohesive planning cycle.
