Strategic IT planning is central to establishing the IT vision and, more importantly, the vision of how IT will propel the business (or government agency) forward. It’s one of the seven basic competencies every CIO and IT organization should master to bring value to the business.
However, mention “strategic” to IT professionals and the conversation will mostly turn to security, cloud, business intelligence, and various platform and network developments. Sure, IT’s roles in the business underlie the conversation, particularly in issues such as flexibility, enhanced user experience, competitiveness, and the like. The truth, though, is that most of this “strategic” conversation is about issues of IT “supply” — how the IT organization will effectively develop and provide leading-edge and strategic means for supplying the business with IT services and achieve operational excellence doing it. This “supply” view tends to look inward to the IT organization and the technologies, services, and management processes it embraces. This narrow view does not account for the tumultuous business conditions and global turbulence facing every business and government organization.
Perhaps surprisingly, strategic IT planning should be primarily business focused, not IT focused. The planning process focuses on how the IT organization (and CIO) effectively addresses the business “demand” for IT. It addresses IT’s business-facing capabilities to transform and support transformative change to the business organization. That is, the details of IT “supply” are secondary; the effective and operationally excellent delivery of IT is assumed to be within the capability of IT in the normal course of IT management.
Strategic IT planning produces two important outcomes:
- The primary outcome is the vision of how IT will be used to produce business impact. This results in documenting how information and IT will be used by the company or government agency for enhancing competitive or mission performance, transforming business and IT, and supporting operational excellence.
- The second outcome, though second as well in importance, is the vision of how IT will be supplied to the company or agency to achieve the vision for how IT will be used. This includes the implications for infrastructure, platforms, strategy (cloud?), and organization.
In addition, a strategic IT plan provides a roadmap to how IT resources will be invested in the next one to three years — a combination of operating and capital budgets.
Strategic IT planning identifies exactly what business management intends to do in the business and then offers strategic opportunities for making it possible to do those things using information technologies. This involves a simple set of things to do. However, the key to this is more difficult than it may appear — engaging the business in the discussion and conversation. Fleshing out what the business is about and what management is intending to do is much more than simply looking at annual reports or planning documents. It’s the conversation with business that’s critical.
What is interesting, though, is how powerful this is. A strategic IT planning process, by engaging business, will produce enormous dividends in a common vision about business objectives and about the role IT plays in achieving it.
The following is highly simplistic but shows the outlines of the basic ideas. Consider a home-appliance manufacturing company. The company designs and sells middle-of-the-road products for large retail chains, which in turn market and sell the appliances to the public under their own brand name.
The Vision for How IT Will Be Used
Simple questions establish this vision.
- What does management intend to do? Answer: broaden the number of retail chains to which they sell their appliances.
- How do they intend to accomplish this? Answer: (1) target their product development/design on the specific retail-chain requirements (as ascertained by analyzing current retail customer sales patterns), (2) create industry-leading customer service capabilities; and (3) track sales behaviors to support objectives 1 and 2.
- How do they intend to use IT to accomplish this? Answer: capture complete customer, sales, and warranty information and apply it in product development (focusing on customer wants/needs) and customer services (focusing on tailoring customer service to customer needs).
In effect, the strategic IT plan outcome is agreement on how IT will enable business management to achieve their business vision.
The Vision for How IT Will be Supplied
Equally simple questions address the IT supply vision.
- What are the strategic supply requirements? Answer: establish industrial-strength, large-scale warehouse and analysis capabilities for the use of managers in product development/design and customer services.
- What are the infrastructure and IT resource requirements? Answer: provide the network and platform (perhaps cloud-based) capabilities required; provide analysis and training capabilities.
If you examine most strategic IT plans, you will find IT supply answers: how “cloud” will be used, the impact of new technologies, and the means for consolidation and cost management. Interesting, but secondary. Over two-thirds of the effort put into the strategic IT plan should be about the business and what management wants to accomplish; only one-third should be about how IT will do that.