Caroline Weese Case Summary

In the case, Caroline Weese, the CIO of North American Financial, was in a bind with the head executives and it was her time to present to them her justification of the IT budget. The executives didn’t see the value in the IT investments after pouring millions of dollars into it, and was looking to Caroline to answer the problem. Caroline had great IT management that followed every standard that ensured IT processes were efficient, cost effective, and on par with industry regulations, but had no way to prove to the executives the rate of return on the investments. She admitted that it was IT’s responsibility to for the quality of work, its timely delivery, and its cost, but they are not responsible for monitoring which projects will deliver the most business value. She told the executives that they are going to have to work together to ensure that the business is investing in the right projects and delivering benefits. This resulted in the agreement on an IT
Investment Committee, which included both business and IT executives, and was responsible for the design and implementation of a detailed investment process that is integrated throughout the bank in time for the next budget cycle.
The first step in this process is to design a detailed method of project categorization and prioritization.
It was stated in the case that the total IT budget for new development work was allocated by business unit, which worked reasonably well at the business unit level but not for NAF as a whole. In prioritization meetings, leaders would argue for their own particular cause and focus on their own needs, not on NAF’s overall strategies. When designing the process, the IT investment committee should partner together and prioritize the projects based on the principles that were set by Caroline, Matt, and their team. The projects should be prioritized based on how close they are aligned with the enterprise’s strategies and the ROI of the project. They need to determine which projects are eating at the current IT budget and eliminate them to fix the application clutter. This would allow them to distinguish which ones do not need fixed and which ones need reviewed that could possibly reduce operating
costs.
The next task is to create a comprehensive and holistic governance of IT spending and benefits delivery at all levels. Instead of dividing up the IT budget into business units, the executives need to take a enterprise strategy towards the budget and incorporate the business as a whole. First, the executives would have to identify the enterprise business objectives and then develop strategies that align with the overall objectives. Once the strategies are identified, the business can now create a road map and include major policies and standards that help guide them to their objectives. Since they have already prioritized the projects, they can allocate the correct amount of the IT budget to the correct project. At this stage, consolidation between business and IT is a must when developing strategies and making decisions that will best benefit the business on all levels.
The last task is to create an annual IT planning process that provides transparency and accountability for all types of IT spending and that creates an integrated and strategically aligned development portfolio. One of the problems that arose was that once a project was approved, everyone focused on on-time, on-budget delivery and never questioned whether the project was still necessary or was still on track to deliver benefits and moved on to the next project. They need to develop a rolling budget cycle that is updated annually and revised quarterly to ensure that they are capturing data that allows for them to determine the value that the projects are bringing. This will allow for the business executives to be able to view the value of IT in terms of ROI. Once they understand the value of each project and how the new IT budget is set up, they can now contribute and also be held accountable for the delivery of the projects.