When it comes to digital, consider your realization horizon

As I meet with executives from enterprises seeking digital enhancement, many suggest that in order to achieve material value from new digital services, offerings and technologies, they need to balance two factors: the pace of the initiative and “the realization horizon.” My previous blog discussed pacing. From there, it becomes critical to utilize realization horizons.

Most classical IT planning is done in annual increments or by selecting a scope and then determining the timelines and resources required for the program or project to be delivered. However, as a chief digital officer at a health insurance provider recently told me, his organization finds classical approaches to the program management office (PMO) and planning to be unrealistic, dysfunctional and often irrelevant when it comes to digital initiatives. I hear this same comment from others who are frustrated with digital plans and results, especially in  organizations employing DevOps or Agile.

A More Realistic Approach to Planning

Instead of basing planning on an annual period or what it will take to deliver a project, digital winners typically work backwards from what can be accomplished within a realization horizon.

The realization horizon is determined by factors such as:

• How much patience key stakeholders have for waiting for a tangible, visible outcome or result.
• How long a core enabling team can realistically stay together.
• How long the executive sponsor will stay interested, engaged and supportive of the initiative.
• How long current management or the organizational structure will stay in place.
• How long before an overwhelming new initiative, such as as a merger or acquisition, diverts attention from the initiatives at hand.
• How long it will take for a realistic segment of the intended users to adopt or become comfortable with the initiative.

Clearly, these factors are made as subjective estimates, often with political implications. A combination of such factors determines the realization horizon; the factors are best developed from the perspective of the initiative’s leadership team as opposed to a single member.

One word of warning: No two digital initiatives have the same realization horizon and may be subject to adjustment as the initiative unfolds. I’ve heard of many examples where the initiative was brought to an abrupt close or was extended as the factors changed.

Working Within the Horizon

Once the horizon has been determined, the scope and expectation are then fit to what can be achieved within that horizon. Getting this right is not a science but an art form that improves over time. The horizon-determined scope then defines what will be the minimum viable product (MVP).

Established expectations and messaging  for business management, users, customers and IT staff are as critical as the deliverable, resources, funding and scope. A realistic view of the supporting enablement factors, such as training, user adoption and underlying system changes that will be needed, are then shaped to fit within the realization horizon.

A New Way of Thinking

The head of digital initiatives at an industrial supplier recently conceded that  he has encountered a strong reluctance by business users and IT people to work this way. “They are used to making sure all aspects of functionality are included as a project work plan is developed. However, we have painfully learned that ‘bad breath is better than no breath’ when it comes to delivering digital-based value,” he explained, noting that his organization previously chased well-planned-out initiatives that never reached  fruition. “Our challenge has now become ensuring that what is accomplished within a horizon is then followed with enhancement – if justified.”

This way of thinking may overlap or be at odds  with  the McKinsey three-horizon approach. I’m not suggesting that using a realization horizon-based approach will work in every case in every enterprise, but the concept is worthy of consideration for those wishing to accelerate their digital progress.