Page 20 - BENTLEY SYSTEMS PR REPORT - APRIL 2024

Categorizing and Optimizing Your Firm’s Project

Portfolio
The next step is to categorize your IT/digital spending and optimize your project
portfolio. Not all spending is created equal. A good model that has been in use for many
years is run, grow, transform – or run-the-business (RTB), grow-the-business (GTB),
and transform-the-business (TTB). RTB spending is essential for maintaining the
current operations and performance of the IT systems and services. GTB spending
aims to enhance existing capabilities and improve the effectiveness of IT processes and
solutions. TTB spending focuses on creating new capabilities and enabling new
business models and opportunities through innovation and digital advancement.
You might also hear this referred to as efficiency (RTB), effectiveness (GTB), and
transformation (TTB). You need to optimize your portfolio by balancing these three
types of spending, based on the business strategy, priorities, and current digital
maturity. You also need to identify and eliminate any redundant, obsolete, or low-value
IT spending that does not contribute to the business goals. This will free up funding for
digital investment. The more innovative you need to be, the more you need to spend in
GTB and TTB, and therefore the less in RTB and eventually GTB. For instance, you
might currently be at an 80%-10%-10% split between run, grow, and transform, but
might seek to drive to 60%-20%-20%. These are goals you should set in conjunction
with stakeholders across the business to ensure alignment.

Adopting a Value-based Approach to IT Investments
Understanding where your current spending is and where you want to spend will lead
you to step three, which is all about adopting a value-based approach to IT/digital
investment decisions, rather than a cost-based or technology-based one. This means
that each IT line item, digital project, or initiative is evaluated based on its expected
value to the business, in terms of revenue growth, cost reduction, customer satisfaction,
competitive advantage, or strategic alignment.
You also need to consider the risks, costs, benefits, dependencies, and trade-offs of
each option, but cost is only one consideration and not the main one. Use a rigorous
and transparent methodology for assessing and prioritizing investments, such as
business case analysis, return on investment (ROI) calculation, value realization
tracking, or portfolio optimization. Involve the relevant stakeholders in the decision-
making process, such as the business sponsors, the end-users, the technical experts,
and your vendors and strategic partners.

https://techitupme.com/5-steps-to-balancing-it-cost-containment/