Gartner, Align Thyself

To spark communication between IT and the business units atGartner and get them thinking about companywide strategy,Stanco introduced elements of what he would later callproject-based budgeting. The project-based budgeting processconsists of a three-tier advisory council in which IT andbusiness-unit leaders from around the world participate inthe project planning process. There's also a formal proposalsystem requiring project sponsors to tie project goals tocorporate strategy, prioritize projects based on criteriaderived from corporate goals, and generate a return oninvestment and total cost of ownership analysis afterlaunching projects. Paolillo and Stanco both point to theGBIS, or Gartner Business Information System, an analysisprogram designed to help managers control profit and loss,as an example of a new tool developed using Stanco'sproject-based budgeting methodology.

One of Stanco's first steps toward establishing that processwas to appoint strategic business partners (SBPs) from theIT side to each business unit and establish a review processto vet and approve projects under $100,000 that are limitedto one business unit. The SBPs and business unit leadersdiscuss project merits and have the power to give them thegreen light. By summer 2000, in time for fiscal 2001 budgetplanning, a three-tier advisory council was in place. Thishierarchy included a council for larger projects thatassembled senior business and IT managers from around theworld.

To ensure that project proposals are tied to companystrategy, the lead project sponsor, who can be from IT or abusiness unit, fills out planning templates that identifythe goal the project is supposed to facilitate. One of theadvisory council members then prioritizes the project in a“stack ranking,“ using criteria weighted according to therelative importance of the project goals. For example, sincegrowing research revenue and profitability are paramount,those projects will end up on top of the stack.

A key component of this methodology is its flexibility, saysPaolillo. If the company needs to reconsider strategic andcorporate priorities midyear, then the top-level advisorycouncil can rework stack rankings and reprioritize projectsusing a new or reweighted set of criteria.

Digging Out, Part II: Getting Aligned