Depoliticize Project 773545 NDX

Depoliticize Project Prioritization With a Decision
Framework
Published 28 July 2022 - ID G00773545 - 30 min read
By Analyst(s): Anthony Henderson, Tina Nunno
Initiatives: Strategic Portfolio Management; Spend Optimization and Supplier Value
Enhancement
Deciding between projects often becomes political as stakeholders

battle for resources to achieve their objectives. This research
highlights how strategic portfolio leaders can lead the way to a
high-quality decision framework and become honest brokers of
empirical decision making.
Overview
Key Findings
■ When decision makers lack or misapply the empirical criteria needed to objectively
make trade-offs between competing initiatives, the scenario often devolves into
politicking and power plays.
■ Digital business and innovation introduce new digital technologies with greater risk
and more uncertain return, further increasing tensions in the decision-making
process.
■ Relationship-based decision making proves to be even more fragile and inefficient

as various executives enter and leave the enterprise, thus requiring a more effective
alternative.
Recommendations
Strategic portfolio leaders responsible for project prioritization and strategic portfolio
management must:
■ Neutralize politics by first identifying decision making that is more politically driven
than empirically based.
Gartner, Inc. | G00773545 Page 1 of 22
This research note is restricted to the personal use of heberto.azuarasa@anahuac.mx.

■ Introduce a structured and objective decision framework for technology investments.
Ensure the decision-making framework is simple to use, yet nuanced enough to help
frame the range of potential initiatives and IT investments.
■ Apply the decision framework by demonstrating to executives where digital

technologies fall within the decision framework and how they relate to the rest of the
IT portfolio of investments.
■ Institutionalize the decision framework through a set of principles that will sustain
quality decision making through business and executive transitions.
Strategic Planning Assumptions

By 2025, 70% of digital investments will fail to deliver the expected business outcomes,
due to the absence of a strategic portfolio management (SPM) approach.¹
By 2024, half of enterprise program management offices (EPMOs) will have the ability to
rapidly sense and orchestrate changing conditions and become the central nervous
system for the enterprise.¹
Introduction
Business executives often find it challenging to select and prioritize initiatives that will
help the enterprise be successful. The 2022 Gartner CEO and Senior Business Executives
Survey indicates that over 85% of respondents will continue or accelerate their digital
investment pace in 2022 and beyond. 2 This will require making sound investment
decisions in the midst of a tumultuous business environment, while optimizing
constrained resources. This means that executives cannot rely on instinct, habit or
nonempirical data, which are all more likely to lead to suboptimal investment decisions.
They must discern between those initiatives that have a potential, forecastable yield
(value) and those that do not. They must also decide how to balance the initiative
portfolio across priorities and stakeholders, testing the decision-making skills of even the
enterprises with a high portfolio management maturity.
Numerous challenges can render these efforts more political than empirical. Strategic
portfolio leaders charged with instituting a disciplined approach to prioritization will often
have to make tough decisions with a high potential for political difficulty. A number of
these challenges are highlighted in Note 1.

SPM leaders have a critical role to play in sidestepping politics and leading the enterprise
toward better decision making. According to the 2021 Gartner State of the EPMO Survey,
most EPMOs are sponsored by the CEO, the board or the chief strategy officer. 3 The top
three strategic goals of EPMOs include:
■ Driving value realization and maximizing returns on investments
■ Providing ongoing change leadership to help the enterprise absorb disruptions
■ Optimizing performance and processes across the enterprise
Each of these goals are paramount for improving decision making. Strategic portfolio
leaders must take a structured prioritization approach to optimize their decision making
and drive portfolio management efficiencies. They must ensure that decision makers can
make sound, well-informed choices when they meet.
Strategic portfolio leaders should use the decision framework outlined in Figure 1 to help
depoliticize the prioritization process.
Figure 1: Prioritization and Decision Framework
All investment decisions require a foundation in business value and outcomes. The model
in Figure 1 shows investment principles based on both. This structure will help strategic
portfolio leaders communicate investment trade-offs and patterns to their business
partners, facilitating better decision making.⁴

Analysis
Neutralize Politics by Identifying Its Presence in Decision Making
Strategic portfolio leaders can use Table 1 to help them identify possible scenarios that
indicate when the enterprise has fallen into political decision making. Some of the leading
indicators include the use of political techniques, phrases or implied statements.
Table 1: Political Decision-Making Scenarios

(Enlarged table in Appendix)

Strategic portfolio leaders must recognize that stakeholders do not always employ these
tactics out of ill intent. Most often, they utilize them because they lack a viable decision-
making alternative. The decision-making executive team may simply lack a language or
framework to make the investment decision in any other way. Moreover, if the executives
feel strongly about the potential investment, they may use the political tools in their
arsenal rather than other, more level-headed options.
We recommend that strategic portfolio leaders introduce decision-making frameworks

(see Figure 1) to diffuse these tensions. Frameworks are durable and less reliant upon the
players, unless there is a significant executive turnover. Once the organization agrees on a
framework, a stable executive leadership tends to help sustain and maintain it.
Improve the Quality of Executive Decision Making by Introducing an

Objective Decision Framework
Strategic portfolio leaders can help diffuse these political challenges by introducing a
decision framework that enables the executive team to objectively test the accuracy or
relevance of potentially political statements and tactics. The 2020 Gartner CEO and Senior
Business Executives Survey shows that only 38% of CEOs rely on clear decision
frameworks and principles to guide their decision making and to resolve disagreements
among the executive team. The remaining respondents use methods such as
socialization, trusted advisors and delegation. 5
While no framework will serve every purpose, a decision framework will still neutralize
politics if the parties involved are confident that they have explored all reasonable
empirical approaches before making a judgment call.
The decision framework should utilize common financial criteria that executives are
familiar with, and therefore comfortable applying: revenue, cost and risk. This is more
nuanced than the traditional “single line of the balance sheet” approach, as it can utilize a
broader set of elements related to business outcomes to help the executive team evaluate
IT investment decisions. Since the model covers more IT investment decisions, there are
fewer gaps for the stakeholders to fill with political maneuvering.
The four investment categories are:
■ Competitive differentiators
■ Commodities and operations
■ Infrastructure and compliance

■ Innovation and game change
The first step in creating a politically neutral decision framework is for the stakeholders to
agree on the various categories, the financial criteria that apply to them, and which
investments belong in each category.
The four suggested framework categories and their applications are described in detail as
follows.
For Competitive Differentiators, Invest to Grow

Proposals in this category help the business grow top-line revenue and enhance the
reason why customers choose to buy an enterprise’s products or services. Applying this
literally means that, when an enterprise approves initiatives in this category, they will
increase, or apply to, the revenue forecast for the business. Organizations in the public
sector that generate revenue through taxes, fees, memberships and other means can
apply this category in the same way as commercial enterprises. Non-revenue-generating
public-sector entities or not-for-profit organizations should consider labeling this category
“strategic differentiators” or “mission enhancements” to describe initiatives that deliver
their key mission capabilities and services.
The overarching investment principle for competitive differentiators should be to invest as

a means of growth. A wide variety of technology investments can contribute to revenue.
Investments will vary depending on the competitive approach of the enterprise.
Political Challenges
Potential investments in this category are often exciting to enterprise leadership. As a

result, executives are often too quick to approve potential growth investments without
subjecting them to appropriate benefit analysis and forecasting.
In risk-averse cultures, executives are often biased against investments that challenge the
status quo or current way of doing business (typically, innovation and game-changing
initiatives). They may refuse to believe that any technology investment can contribute to
revenue growth and may have an overly simplistic view that all technology is simply a
bottom-line expense.
As a result, strategic portfolio leaders should help the executives understand how to apply
standard growth-oriented investment principles and metrics to initiatives in this category,
and help them compare potential IT-related growth opportunities more objectively.

Decision-Making Criteria
■ If the executive team dismisses technology simply as a bottom-line cost, the

competitive differentiator portion of the decision framework can help them think
about specific IT investments as potentially contributing to enterprise growth.⁶
■ At the other extreme, a stakeholder may make the politically ambiguous assertion,
“This is strategic, and we can make a lot of money if we invest in this technology.”
Strategic portfolio leaders can neutralize this with a rigorous benefits forecast that
translates “strategic” into “revenue-generating” and helps forecast how much money
will be made and when (through business case analysis, modeling software, or the
like).
Actions to Neutralize Politics
While revenue forecasts can be challenging to do accurately, strategic portfolio leaders

should make sure that the math or the logic of the forecast makes sense for the executive
team to proceed with the investment. If neither the math nor the logic makes sense, then
the investment will not yield revenue, or it may belong in one of the next three categories.
For Commodities and Operations, Productivity and Cost Management

These capabilities help run the business, but may not be visible to enterprise customers.
They may not impact a customer’s choice to do business with the enterprise or purchase
its products. Proposed projects in this category support business functions that primarily
impact the bottom-line costs or efficiency. IT-related spending in this category often
increases productivity, creates efficiencies and helps the enterprise save money in the
lines of business. However, customers may also benefit from the efficiencies through, for
example, on-time delivery.
In organizational cultures that perceive themselves as entrepreneurial, executives may

have little patience for efficiency initiatives and dismiss investments in this category
outright. Few mainstream executives understand the complexity of IT costs, and how
making IT investments in the near term can significantly reduce operational costs for the
enterprise in the future. To counter this, strategic portfolio leaders must focus the
executive team on how effective operational investments will impact the balance sheet
and enterprise productivity, now and in the future.

The investment principle for the commodities and operations category is “control costs
and drive productivity.” Enterprises should strive to manage costs in this category just
enough to ensure sound operational health and efficiency. Executives may think of this
category as the “good-enough internal services” category. As these investments do not
necessarily drive customer engagement, any money spent in this category above the
minimum required for sound operations is money that cannot be invested elsewhere to
help grow the business. The strategic portfolio leader’s objective should be to help the
decision-making executives understand what sound or good-enough commodity IT looks
like for the enterprise.
When evaluating potential investments in this category, the primary focus should be on
efficiency metrics such as cost savings, productivity and cost avoidance in the financial
analysis of benefits over time.
Strategic portfolio leaders should partner with infrastructure and operations (I&O)
leadership peers to conduct an analysis that will provide the insight needed to categorize
cost and productivity investments into two groups:
■ Investments that impact the cost structure for IT
■ Investments that impact the cost structure for the rest of the business
Then, these investments should be further categorized into:
■ Investments that reduce operational costs in real terms (either immediately or over
time, through cost avoidance)
■ Investments that increase productivity but do not contribute directly to the margin
(see Figure 2)

Figure 2: A Framework to Manage Cost and Productivity
In the commodities and operations category, the most useful criteria include:
■ Reduction in the cost of IT or business operations. These measure reduction in

existing expenditures.
■ Investments to improve productivity of IT or business operations. These criteria

focus on investments that create productivity in other parts of the business and
reduce future spending.
For more detail, see Note 2.

Strategic portfolio leaders can neutralize politics around commodities and operations
project proposals by helping the enterprise adopt an expanded decision framework
around cost savings. By helping executives distinguish between IT investments that
reduce costs in the near term, and investing in IT to drive productivity in the long term,
strategic portfolio leaders can depoliticize bottom-line discussions and create better
decision outcomes.
For Infrastructure and Compliance, Assess and Manage Risk

Infrastructure and compliance investments share functional and financial characteristics
that make them particularly challenging decision situations for decision makers.
Infrastructure comprises the core physical structures required for the enterprise processes
to function. For example, an enterprise with a long history of underinvesting in
infrastructure will accumulate significant technical debt and business risk as a result.
According to the 2021 Gartner I&O Leaders Survey, 57% of I&O leaders view technical debt
as one of their biggest challenges (sum of top 5 ranks), second only to insufficient skills
and resources. 7
Compliance includes the core regulatory data, processes and structures required for the
enterprise to be allowed to function. Highly regulated industries will spend significantly on
risk-oriented technologies. Enterprises with weak decision making in this category are
likely to have an unacceptable degree of business risk, as they may experience continuity
challenges or incur fines from government regulators.
Strategic portfolio leaders often struggle with executive teams who inadvertently misapply
cost and growth metrics to infrastructure, which are well-intended but not relevant.
Executives are uncomfortable with these categories, as they tend to be less
knowledgeable about these more technical investments. As a result, they may take an all-
or-nothing approach. They may approve all potential investments in this category and risk
overspending. Or they may approve little to nothing, believing that so long as nothing bad
appears to be happening, they are saving money. In reality, they are likely accumulating
significant potential risks.
The investment principle for project proposals for infrastructure and compliance should
be to calculate and manage risk. The only reason any enterprise invests in them is
because if they do not, negative events may occur. This can include everything from fines
for noncompliance with regulations to poor system performance or security breaches
going undetected.⁸

In the infrastructure and compliance category, leaders across business and IT, including
strategic portfolio leaders, should consider forecasting in each of these categories as
appropriate:
■ Operational risk — Potential losses from operational failures of the company due to
technological infrastructure failure and the systems and processes that rely on the
infrastructure.
■ Legal risk — Potential costs and exposure related to litigation from security and
privacy breaches, or a failure to deliver contracted products and services.
■ Compliance risk — Potential government fines or business interruptions as a result

of compliance or noncompliance with relevant industry laws and regulations.
■ Reputational and market risk — Potential brand impact of incidents and failures, as
well as potential loss of consumer, investor, partner and employee confidence.
Classification into these categories can help translate risk into business terms that are
more palatable for executives.
Elements of the risks above are conceptually quantifiable; one can forecast the likelihood
of the risk manifesting, the potential financial impact of an incident, and the costs
associated with preventing or mitigating it. However, quantifying any of these risk
variables with any degree of certainty remains difficult.
The decision-making value here is in the qualitative conversation about risks, rather than
in the quantitative certainty of the forecasts. A common political tactic for stakeholders is
to dismiss calculated-risk discussions outright, due to their inexact nature. Strategic
portfolio leaders should strive to engage in discussions around acceptable and
unacceptable levels of risk, given the enterprise’s strategies, objectives and environment.
These discussions can reveal interdependencies and risk areas that demand greater
attention, due to previously unforeseen relationships with other risks. Failing to have
calculated-risk discussions can leave the company vulnerable to a domino effect of risk
events. Executive teams that engage in these challenging discussions will make higher-
quality decisions than teams that take an “all or nothing” approach or apply the wrong
criteria to the decision.
For Innovation and Game Change, Experiment and Write Off

Innovations that require corporate investment are high-risk investments with potentially
high returns, offering competitive advantage, significant top-line revenue or strategic
value. Such investments represent “good risk” for the enterprise and ensure that it stays
ahead of the competition. Many digital investments begin their life cycles in the
innovation category. Enterprises that do not innovate risk are easily overtaken by their
competitors. Strategic portfolio leaders can support innovation by helping create a set of
guardrails.⁹
Political Challenge
These investments are some of the most politically sensitive in any enterprise. This is
largely due to the lack of a shared definition of “innovation.” Decision makers and many
executive teams react to innovation proposals in ways ranging from extreme risk aversion
to recklessness. Some enterprises view innovations as anything they haven’t done before,
no matter how mainstream the technology. Other enterprises view innovation as new
technologies that they are able to patent, or new digital platforms to disrupt their industry
and others. Risk-averse cultures will shut down anything resembling innovation, while
entrepreneurial cultures may allow risk to the point of recklessness.
Strategic portfolio leaders can defuse innovation politics by fostering a shared enterprise
definition of innovation investment, and applying sound decision criteria at each stage of
the innovation’s development. 10 A core investment principle for innovation is to
“experiment and write off” individual innovation experiments, while managing the entire
innovation portfolio for success. This is similar to a venture capitalist approach to
innovation investment.
The owner of the innovation portfolio (like a venture capital portfolio) does not care which
innovations succeed, although the initiative owners do. The innovation portfolio owner
might write off individual initiatives and investments but, overall, wants the portfolio to
succeed through the ones that do make it.
We recommend that strategic portfolio leaders apply the principle of “buy future options”
when evaluating innovation project proposals. This language is relatable to finance
specialists and reflects what innovation investment and experimentation are about:
buying the company the option to act in a certain way or invest in one of the other three
portfolio categories in the future, as it now understands a new idea, opportunity or
technology. This option would not be available to the company if it had not invested in the
experimentation. This also captures the fact that options do not always work out.

In the innovation and game change category, strategic portfolio leaders should apply the
following criteria:
■ Overall innovation budget decisions — Enterprises should budget only as much

money for this category of investments as it is willing to lose. As innovation
investments are high-risk, and return is uncertain to unlikely, they are often made in
small amounts relative to other investments, and incrementally. One major exception
is in enterprises that compete heavily on the basis of product innovation. However,
even these enterprises tend to parse innovation experiments into incremental steps
to help manage risk.
■ Individual innovation project forecasts — Here, enterprises should forecast all

benefits for initial innovation investments as zero. This makes it clear to executives
that innovation investments, such as digital, are purely experimental in nature and
are designed to help the enterprise learn so that in the future, it can develop the ideas
that demonstrate promise.
■ Target success rate — Some companies agree on a percentage of success that

reflects their appetite for risk. For example, eight initiatives out of 10 moving to
deployment would mean the initiatives were probably not very aggressive; whereas a
success rate of two out of 10 would enable more ambitious projects.
■ Development of promising innovations — Here, enterprises should apply return on

innovation investment once an innovation demonstrates promise. This helps the
enterprise measure the overall efficiency of its innovation or R&D program by
calculating the return on innovations that develop into products, versus innovations
that are ultimately written off.
■ Evolve criteria as the innovation experiments mature — Innovation experiments that

show promise will shift the investment framework to a new category. Most often,
they will shift to competitive differentiators. When the innovation investment shifts
to this category, all of the related decision criteria should also shift and apply. Over
time, competitive differentiators evolve into commodities, and then into
infrastructure. At each point in the investment’s evolution, the investment criteria
should shift appropriately until, eventually, the enterprise ceases to invest in the
technology in favor of a new one.

The key to depoliticizing innovation investment decisions is applying the right criteria at
the right time. Executive teams devolve into conflict and faulty decision making when they
inadvertently misapply ROI criteria to innovation investments, or seek to eliminate
innovation investment risks entirely, rather than discussing appropriate risk levels for their
enterprises relative to business outcomes.
Apply the Decision Framework

Once a decision framework is devised, strategic portfolio leaders, IT steering committees
and decision makers can apply it in a number of ways.
1. Holistic Planning
The decision framework can serve as an anchor to neutralize politics at virtually every
stage of project prioritization and investment planning. You can use it to:
■ Categorize existing work — Take the current list of initiatives in progress and work
with peers and executives to agree on which work efforts fit into each of the four
categories.
■ Rate the existing projects — Review the relative health of the portfolio, tagging
projects collaboratively as red, yellow or green based on whether they are still fit for
purpose. 11
■ Categorize any new requests — Either as part of the prioritization process or as each
new request comes in, decide which category the initiative belongs in. Then apply
the criteria associated with that category to the proposed investment.
■ Compare the new requests with the existing portfolio — Note whether or not the
new requests fix problems in the existing installed base and make it more strategic,
or add only new complexity, costs or risks.
■ Compare the new requests with available resources — Estimate the amount of IT
(labor and funding) available for new investments. Then create target amounts or
limits of investment for each portfolio category to further guide decision making.
This technique can prevent or neutralize political pressures on IT staff based on
unrealistic expectations.
2. Executive Communications

The decision framework is, first and foremost, a communications tool to help key
stakeholders and leaders understand and optimize investment patterns. Therefore, it is
not essential to categorize every investment with 100% precision to see a representative
pattern. Strategic portfolio leaders should strive for relative accuracy, in the range of 80%,
when applying categorizations. This will help them successfully drive portfolio
discussions and avoid indecision.
Strategic portfolio leaders should involve the CFO heavily when defining the financial
element of the decision framework. This can help create a consensus with finance on the
decision criteria behind each investment category. The criteria can then be used for
everything from individual executive discussions to business case proposals. They are
essential success factors in applying framework management successfully in the long
term.
Close collaboration with finance will also diffuse politics by ensuring that the financial
analysis is viewed as consistent with the enterprise’s overall investment model, rather than
as a separate model created by IT. Consistency in the financial model will ensure greater
ease and accuracy in making decisions, forecasting benefits, tracking success and
reporting on benefits realization.
3. Portfolio Management
There is no optimal investment percentage for each portfolio category, either by industry,
region or enterprise maturity. The percentage of investment in each category will vary,
depending on how an enterprise competes, and the current health of its portfolio. For
example, an enterprise that has underinvested for several years in one category, such as
commodities, may find itself in a crisis situation and may need to divert a large
percentage of investments to the commodity category until the situation is corrected. Over
time, a portfolio approach can help prevent crises from occurring by ensuring the presence
of a more holistic and optimized treatment of investments that is aligned with the
enterprise strategy.
Additionally, industries that are becoming heavily digital, such as media, publishing and
retail, may find that they will need to invest more in the innovation and competitive
differentiator categories than other industries. The key to finding balance for the
enterprise is determining whether the investment pattern suits the enterprise’s needs.

Institutionalize the Decision Framework Through a Set of Principles That
Will Sustain Quality Decision Making
Each of the four decision framework categories has a primary investment principle, as
discussed previously. As the executive team adapts to using an empirical framework,
strategic portfolio leaders can add decision principles to each category to further diffuse
political decision making. These principles can go beyond assessing individual initiatives
merely on financial merit.
Effective principles are decision criteria that detail specific desirable investment behaviors
and indicate why those behaviors matter to the enterprise. They indicate strategic choices
that the enterprise leadership has made to help create a targeted, optimized portfolio.
Strategic portfolio leaders can use the list in Table 2 as examples of investment principles
and criteria they can customize to fit their specific enterprise and decision-making needs.

Table 2: Sample Investment Principles and Criteria
As mentioned earlier, investments will often move from one category to another over time.
An investment that begins as an innovation will move to the competitive differentiator
category, should it be successful. Competitive differentiators can become commoditized
when others in the industry adopt them, leveling the playing field. Eventually, many
commodities will transition into infrastructure and then transition out as other
technologies ascend.
Organizations should monitor investments as they move from one category to the next to
ensure the style of decision making changes as well. So, as investments move from
competitive differentiators to commodities, for example, enterprises should ensure their
decision criteria and principles for those investments shift as well.

The key to optimizing this decision framework is adjusting the categories and criteria to
suit the enterprise’s needs. Strategic portfolio leaders should carefully assess the abilities
of the enterprise and its executive team to turn away from politicking and absorb new
decision criteria. If the enterprise has a long history of politically driven decision making,
or is under significant stress, these new decision criteria should be introduced
incrementally, and more should be added over time as the team successfully adjusts.
Evidence
¹ Predicts 2022: Shift Toward Strategic Portfolio Management to Enable Organizational
Agility
2
2022 CEO Survey — The Year Perspectives Changed
3
The 2021 Gartner State of the EPMO Survey was conducted between September and
October 2021 among 159 EPMO leaders from North America, EMEA and APAC across
industries and enterprises with $500 million or more annual revenue. The primary
objective of this research is to help aspiring, transitioning and current EPMO leaders
understand the typical reporting structures, goals and activities for existing EPMO groups
as well as the broader ecosystem in which they operate.
⁴ See Case Study: Responsive Portfolio Management Decisions for Business Leaders
(ElevenShift*).
5
2020 Gartner CEO and Senior Business Executive Survey: Gartner conducted the 2020
CEO and Senior Business Executive Survey from September through December 2020 to
examine CEO and senior business executive views on current business issues, as well as
some areas of technology agenda impact. Gartner qualified and surveyed 444 business
leaders via an online survey (n = 362); an additional 70 surveys were done by telephone
interview, and 12 were self-administered paper surveys. All respondents were screened for
active employment in organizations with greater than $50M in annual revenue.
Disclaimer: Results of this survey do not represent global findings or the market as a
whole, but reflect the sentiments of the respondents and companies surveyed.
⁶ See Create a Culture of Smart Spending.

7
The 2021 Gartner Annual I&O Leaders Survey was conducted online from 14 June
through 25 June 2021 to track burning issues for I&O leaders and learn where they are
prioritizing their investments over the next year. It also sought to explore investments in
cost optimization and innovation strategies. In total, 96 Research Circle members
participated, of which 71 were IT leader members, 22 were CIO members, 2 were customer
service and support (CSS) members and 1 was a CFO member.
⁸ See Optimize Portfolios Amid Change Using Gartner’s Risk, Value and Cost Optimization
Model.
⁹ See Jump-Start Your Innovation Journey With a Customizable Innovation Framework.
10
See Successful Innovation Begins With the Business Strategy: Use Business Objectives
and Goals to Start Your Innovation Journey.
11
See Tool: Framework to Score, Evaluate and Prioritize Projects Easily.
Note 1: Decision Making Challenges

The following table provides some of the typical challenges that render prioritization
efforts more political than empirical.

Table 3: Typical Decision-Making Challenges
Note 2: Key Metrics for Commodities and Operations

Investments
Commodities and operations investments may save money by reducing the cost of
operations. Strategic portfolio leaders should consider the investment’s potential impact
on the following metrics:
■ IT or business spending. Savings may occur through a reduction in complexity,

consolidation of IT and related business processes, a renegotiation or reduction in
software licenses, a change in vendors for better contracts, and/or changes to the
sourcing model.

■ Fixed-asset turnover ratio. In addition, consider the initiative’s impact on variable
costs versus fixed costs in IT and other departments — for example, a shift to cloud
computing or SaaS.
■ IT and non-IT staff spending (average cost saved per staff hour). This may be
through labor arbitrage, such as creating a shared service center in an area with
lower labor rates, or outsourcing functions when lower-cost outsourced staff are
available.
These investments may also benefit the enterprise by improving productivity. Some
common productivity metrics include:
■ Inventory turnover
■ Days’ sales of inventory
■ Asset turnover ratio
■ IT and non-IT staff productivity (In this case, the productivity yield equals the
average staff cost per hour multiplied by the number of hours of productivity gained.
An enterprise may gain this by implementing technologies, such as robotics,
algorithmic analysis and artificial intelligence, as staff augmentation.)
Document Revision History

Depoliticize Project Prioritization With a Decision Framework - 15 October 2020
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Table 1: Political Decision-Making Scenarios
Political Tactic Example
Territorialism: This happens when decision makers focus on turf rather than ■ Budgetary territorialism: “It is my money or budget, so I will decide what
decision quality. While territorial observations may be factually accurate, they to do with it.”
neither add value to nor inform the quality of the prioritization and IT
■ Line-of-business territorialism: “It is my business unit or product and my
investment decision in discussions.
objectives, so I will decide.”
Status: Statements about status, such as tenure and hierarchy, imply ■ Tenure status: “I have been here for 20 years and know what I am talking
knowledge. But when technical knowledge is relevant to the investment about.”
decision at hand, these statements are often a political tactic.
■ Expert status: “I have three degrees, and therefore, I know what is best.”
■ Hierarchical status: “I am the line-of-business president, so I know what is

best.”
■ Invocation status: “This is important to the CEO (and I may or may not
have spoken with the CEO about it).”
Exaggeration: These extremely negative or positive statements are designed ■ Negative exaggeration: “If we don’t do this, we will risk going out of
to elicit strong emotions, rather than explore fact. They are often political business or missing our financial targets.”
tactics because they do not use objective data to support their extreme
■ Positive exaggeration: “If we do this, we will make a tremendous amount
assertions.
of money or dominate the competition.”
Gartner, Inc. | G00773545 Page 1A of 7A

Attack: This political tactic usually combines one of the above tactics, with an ■ Feigned-offense attack: “Are you implying that I don’t know what I’m
offensive maneuver against the individual questioning the investment talking about?”
decision. This emotional diversion is designed to neutralize the individual
■ False customer attack: “I am the customer, so I am always right. You are
asking questions, rather than help the enterprise make a high-quality
not making me happy.”
decision.
■ All-in-one attack: “You are just an IT person and a service provider, and
should do what I tell you to do.”
Ambiguity: This approach applies elevated terminology, but minimal to no ■ Qualitative ambiguity: “This investment is important, strategic, critical or
quantitative data. When enterprises base decisions on such ambiguous essential, so we should do it.”
statements or on “trust,” rather than empirically testing the vague assertions,
■ Quantitative ambiguity: “If we do this, we’ll make or save a lot of money.”
this is a strong indicator of politics.
Source: Gartner (July 2022)

Table 2: Sample Investment Principles and Criteria
Investment/Decision Category Investment Principle Behaviors/Actions
Competitive Differentiators Invest to Grow ■ Insource development when skills are available,
to protect competitive capabilities.
■ Centralize differentiating capabilities that drive

synergies for the entire enterprise.
■ Localize capabilities that provide competitive

advantage to one business unit only.
■ Invest heavily in security and disaster recovery,

relative to this category.
■ Limit access to differentiating data to

employees with a legitimate use.
Commodities and Operations Productivity and Cost Management ■ Outsource the implementation of these
investments and redirect in-house IT resources
to competitive differentiators.
■ Centralize into shared services to take

advantage of economies of scale.
■ Avoid centralizing when existing local systems

are less expensive than new standardized
solutions.

■ Invest moderately in disaster recovery
capabilities, relative to this category.
■ Standardize commodity data and minimize

duplication.
Infrastructure and Compliance Assess and Manage Risk ■ Move infrastructure to the cloud when risks can
be better managed by vendors.
■ Centralize investments in this category to

enhance monitoring capabilities and to mitigate
risk.
■ Comply with all regulations without exceeding

industry average IT spend on compliance.
■ Ensure that the CIO and IT will be the primary

decision makers for infrastructure investments.
■ Reserve a resiliency fund to cover unplanned or

uninsured security breaches.
Innovation and Game Change Experiment and Write Off ■ Limit the innovation budget to a specific
percentage of revenue to manage financial risk.
■ Centralize and formalize management of the

innovation budget, but decentralize idea
creation.

■ Work with vendors that are strategic to the
enterprise to develop innovation capabilities.
■ Limit the resources, time and effort that

associates can invest in innovations to manage
risk.
■ Apply all innovation principles to digital

investments to help manage risk.

Table 3: Typical Decision-Making Challenges
Key Challenge Examples
Decision drivers: Internal and external pressures can complicate decision ■ Operating model drivers, such as balancing local versus enterprise needs
making and increase tension. Resolving these healthy tensions in an optimal
■ Financial drivers, such as reducing costs versus growing the business
fashion is neither easy nor obvious.
■ Risk drivers, such as reducing enterprise risk versus being innovative
■ Business model drivers, such as brick-and-mortar revenue versus digital

revenue
Decision approach: Every enterprise has a preferred cultural approach to ■ Inclusion approach: Consensus-driven versus autocratic
decision making. If the enterprise’s preferred approach to decision making
■ Process approach: High process orientation versus ad hoc
does not fit the nature of the decision, then tensions and politics increase.
■ Risk approach: Embracing enterprise risk or risk-averse
■ Data approach: Empirical versus instinctual
Decision criteria derailers: Many executives struggle with knowing what the ■ The “one size fits all” approach to criteria, which applies one set of criteria
appropriate data and criteria are to analyze IT investment decisions. While to all decisions, regardless of fit
there is no one ideal set of criteria, applying the wrong criteria and data to a
■ Relationship-based criteria, where who is asking is more important than
decision or, in some cases, using no data at all can lead to decision errors.
the quality of the request
■ Historical criteria, such as “we have always done it this way”

■ Nuisance criteria, where those who shout the loudest or create conflict are
prioritized
Decision authority derailers: Many different stakeholders are impacted by IT. ■ Hierarchical authority, where the enterprise favors the traditional
Often, decision-making authority regarding IT investments is dispersed organization chart over expertise
throughout the enterprise, with many different executives or leaders
■ Legalistic authority, where legal or audit departments dominate over all
authorized to make IT-related purchase decisions, regardless of their relevant
other considerations
knowledge of technology and how to extract value from it.
As a result, decisions may be made by those who hold power and authority, ■ Bureaucratic authority, where process considerations dominate over all
rather than those who have potential expertise in the subject matter, which other considerations
may lead to decision errors. ■ Ad hoc authority, where decisions belong to those who make the decisions
rather than those who have explicit authority to do so

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Depoliticize Project Prioritization With a Decision

Deciding between projects often becomes political as stakeholders

■ Relationship-based decision making proves to be even more fragile and inefﬁcient

Gartner, Inc. | G00773545 Page 1 of 22

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■ Apply the decision framework by demonstrating to executives where digital

Strategic Planning Assumptions

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■ Driving value realization and maximizing returns on investments

■ Providing ongoing change leadership to help the enterprise absorb disruptions

■ Optimizing performance and processes across the enterprise

Figure 1: Prioritization and Decision Framework

Gartner, Inc. | G00773545 Page 3 of 22

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Table 1: Political Decision-Making Scenarios

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We recommend that strategic portfolio leaders introduce decision-making frameworks

Improve the Quality of Executive Decision Making by Introducing an

The four investment categories are:

■ Commodities and operations

■ Infrastructure and compliance

Gartner, Inc. | G00773545 Page 5 of 22

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For Competitive Differentiators, Invest to Grow

The overarching investment principle for competitive differentiators should be to invest as

Potential investments in this category are often exciting to enterprise leadership. As a

Gartner, Inc. | G00773545 Page 6 of 22

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■ If the executive team dismisses technology simply as a bottom-line cost, the

Actions to Neutralize Politics

While revenue forecasts can be challenging to do accurately, strategic portfolio leaders

For Commodities and Operations, Productivity and Cost Management

In organizational cultures that perceive themselves as entrepreneurial, executives may

Gartner, Inc. | G00773545 Page 7 of 22

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■ Investments that impact the cost structure for IT

Then, these investments should be further categorized into:

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■ Reduction in the cost of IT or business operations. These measure reduction in

■ Investments to improve productivity of IT or business operations. These criteria

For more detail, see Note 2.

Actions to Neutralize Politics

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For Infrastructure and Compliance, Assess and Manage Risk

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■ Compliance risk — Potential government ﬁnes or business interruptions as a result

Actions to Neutralize Politics

For Innovation and Game Change, Experiment and Write Off

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Gartner, Inc. | G00773545 Page 12 of 22

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■ Overall innovation budget decisions — Enterprises should budget only as much

■ Individual innovation project forecasts — Here, enterprises should forecast all

■ Target success rate — Some companies agree on a percentage of success that

■ Development of promising innovations — Here, enterprises should apply return on

■ Evolve criteria as the innovation experiments mature — Innovation experiments that