An IT organization found itself overwhelmed with unchecked demand coming from both its clients and internal projects. It needed to better manage the process by which new work was taken in. The CIO also wanted to better align IT with clients' business strategies by setting the right priorities.

Instead of addressing demand management and alignment through business-driven resource-governance processes, this CIO put Martha in charge of a "Governance" group. Her responsibilities included business relationship managers, demand management (deciding priorities among proposed projects), and project portfolio management (a project management office, PMO).

Other groups were responsible for project delivery and ongoing services.

Under the executive were the following groups:

• Martha, governance: customer liaisons, demand management, project portfolio management
  
• Applications, project delivery
  
• Infrastructure engineering and operations

Conflicts of Interests

Martha faced many conflicts of interests:

Martha had the authority to decide project priorities. Since not all benefits are measured to the point of calculating accurate returns (ROI), she couldn't just go by the numbers. So she had to judge the merits of clients' projects. This conflicts with her business relationship management role which attempts to be on clients' side of the table. Will clients be open and trust the people who will later judge the merits of their requests?

Similarly, judging internal projects proposed by peers undermines the service orientation that's expected in her project management function, which is supposed to help peers deliver those projects.

And since Martha's job was to limit demand to available resources, will her business relationship managers be aggressive about seeking new high-payoff opportunities (which makes limiting demand more difficult)?

Also, the business relationship managers help some clients discover new opportunities. Will projects that other clients define on their own (without this group's help) get fair treatment when it comes to setting project priorities?

And will that discovery process (which should be business driven and unbiased) recommend services as well as projects, despite the bias toward projects coming from Martha's project-management function?

By the way, some high-payoff opportunities may be urgent. The project-management function isn't going to like these disruptions to its well-planned project schedule.

Bottom Line

When you build conflicts of interests into people's jobs, you don't get excellence at both. You don't even get an appropriate balance of the two.

A better answer is to focus each group on a single objective, and then resolve the conflicts through explicit dialog and teamwork among them.

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