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II. Articulating a Strategic Framework

Articulating Goals and Strategies

Having evaluated readiness for change, the steering committee is ready to establish goals and strategies to guide the project teams and investments. One methodology for framing the development of such goals and strategies is conducting a gap analysis.

In essence, the steering committee at this stage must understand how much change this project will introduce to the institution in order to set priorities and develop programs that will mitigate the potentially negative effects of the change. The failure to assess realistically the gap between the desired "future state" and the "current state" will result in overlooking important areas of risk and needed investment.

Conducting a gap analysis

A gap analysis is neither difficult nor expensive. It can be as simple as the illustration provided in Table 2. This example is clearly polarized to highlight areas where extreme differences between the current and future environments can occur. Each of the gaps defined in this process can be narrowed through the development and deployment of different project goals and strategies.

Developing the gap analysis, then setting goals and developing strategies to reduce the likely gaps, will help the project sponsors and other members of the steering committee develop realistic priorities and assess the realistic resource requirements associated with this project.

Assessing resource requirements to close the gap

Once the gap analysis has been performed, it is important to attach resource requirements to the elements identified in the analysis -- that is, the areas of needed investment that fall between where the institution is and where it wants to be -- to ensure realistic goals and strategies. Resource requirements include, but are not limited to, the following components:

One-time development costs. One-time costs may include software acquisition or development, hardware procurement or upgrade, training of system users and administrators, the opportunity costs of staff dedicated to system design and implementation, the hiring costs of any outside consultants for development, and other specific project costs.

Skill development. In addition to the initial training required for users and systems administrators, there will be an ongoing need for training of users of the financial system. These costs can be managed to a large extent depending on the characteristics of the system solution that is selected. For example, a financial system that has hundreds of screens that must be navigated, in which each screen has many codes, will require much more ongoing training investment than a system that has a minimal number of screens and reports, with each screen and report organized intuitively, and which includes context-sensitive, online help facilities and integrates well with applications that are already in use at the institution.

Computing infrastructure. The new system will possess different performance attributes and will generate new patterns of use at the institution. These changes will consume different amounts of the institution-wide computing infrastructure. Planners of new financial information systems will need to forecast those incremental infrastructure consumption costs early in the planning process.

Other ongoing expenses. Other miscellaneous costs include those associated with post-implementation maintenance (who and how), replacement of hardware downstream, future development expenses, and so forth.

A key concept associated with assessing resource requirements is that of life-cycle costing. Too often, project planners focus attention on a variety of one-time costs, such as hardware and software acquisition, training, and the like. Experience shows that these costs, while significant, are often the smaller elements of total project costs when they are viewed in light of the useful life of the technology being considered. Hardware and software depreciation, network upgrade management expenses, software maintenance, and a variety of recurring expenses must be accounted for in the communication of project resource requirements. The failure to look at costs on a life-cycle basis can put projects at risk by understating true costs.

The steering committee is charged with overseeing institutional investments in this project, but is not typically responsible for the detailed costing of planning alternatives that are to be evaluated. Its role at this stage of the project is to identify the various cost categories that are likely to characterize projects of this kind and to help identify where large categories of cost are likely to fall. If training costs are likely to be felt strongly by deans and department heads, then either strategies must be developed to finance these costs, or advance warning must be issued to ensure that downstream funding surprises do not erode institutional support for the project.

Goals and strategies should relate strongly to the vision and principles developed by the steering committee in the earlier stages of the planning process. Table 3 provides an example of how goals and strategies can be linked to the principles that have been established.

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