Oct 042011
 

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:

  1. 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.
  2. 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.

An Example

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.

Conclusion

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.

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Bob Benson

Bob Benson is a Fellow with Cutter Consortium's Business Technology & Digital Transformation Strategies practice. His consulting features business value, effective IT application development, consulting methodology development, IT infrastructure planning, and facilitated planning.

Discussion

  3 Responses to “Strategic IT Planning: Get the Business of IT Right”

  1. avatar

    Thanks Bob – an illuminating article though one which I think does little to alleviate confusion about the terminology we use to communicate our intent, and how we then go about describing and documenting the what, how, when and why.

    In my opinion, resolving this dilemma often comes down to agreeing the definition of and relationship between Mission, Goals, Objectives, Strategy, Execution, and Tactics.

    Sure, a few of these terms are interchangeable – but most are not, and in my experience this sequence demonstrates the cascading cycle of co-dependence twixt WHAT and HOW.

    So, in that context I’d like to propose a counter argument which says that Vision is not the outcome of the IT strategic planning process, but rather the driver of it.

    In general the IT world seems to have no clear position on what ‘strategy’ is (and what it isn’t) – however rather than trot out the traditional definitions I’m going to try to correctly place Strategy is the Plan-Act cycle and thereby show what an effective Strategy is dependent on and, equally so, what depends on Strategy to be effective.

    For example, how often have you heard the saying that “… the REQUIREMENTS are the WHAT and the DESIGN is the HOW …”; yet we also know that one person’s Requirement (as output) are another person’s Design criteria (as input). And so it goes for every stage from Mission through to Tactics.

    Equally so, if Strategy can be equated to How, then it also holds true that there needs to be an effective strategy for selecting the right What at least as much as there needs to be an effective strategy for deciding the corresponding How.

    Anyway, here’s how I see it …

    MISSION
    A mission is a over-riding, long-term end result or achievement.

    Or, put another way, a Mission Statement is usually the non-financial uber achievement which the CEO sets for his organisation.

    Objectives, Goals, Strategies, Executions and Tactics may all engaged to achieve the Mission, but the Mission is the simplest way of describing the target state of what the organisation most wants to achieve or be known for.

    The mission is always a What and never a How, and is often interchangeable with a Vision statement in that it has a future-state orientation. As a general rule, to avoid confusion, an organisation should choose either a Mission or a Vision, but never both lest it be unsure which has primacy.

    OBJECTIVES and GOALS
    I think Objectives and Goals can be used interchangeably because both describe the end point(s) to which all subsequent actions are directed.

    So, although Objectives (or Goals) describe the desired end state, they are not necessarily the final achievement … that’s still the Mission.

    And, like the Mission, Objectives & Goals are also Whats not Hows, and in many ways these are just more detailed components which together make up the Mission. Typically a number of complementary Objectives & Goals will be required to achieved the Mission, but there is usually only one Mission.

    STRATEGY
    Strategy is How to achieve an Objective, Goal (or even a Mission).

    It is a thoughtfully constructed plan, or method, or series of high-level actions that must be employed to achieve a result.

    Because Bob’s article focused on IT strategy development it’s probably worth identifying what (good) strategists actually do. Strategists focus on devising schemes and plans and courses of action to achieve a desired result. Whilst strategist excel at the How, typically they also have a very good grasp on the What and Why (and the Why Not), and many times also the When (because as ever good cook knows, timing is everything).

    EXECUTION
    Executions are what delivers the Strategy.

    This is definitely a How type activity – though in this context the input Strategy is considerer the What.

    Although execution is more about doing than formulating, critical thinking is still a vital success factor since Execution disconnected from an appreciation of what the Strategy is trying to achieve will stymie even the best laid plans and tend to divert effort away from delivering the intended outcomes.

    TACTICS
    Tactics are the devices or actions necessary to achieve a larger purpose.

    They are definitely about the How, but are typically expressed on a smaller scale and in this sense Tactics are to Strategy what Objectives are to the Mission.

    So, when we say that someone is a good tactician, we mean they are good at giving effect to the strategy which, if results matter, is actually the most important activity of all.

    With all that said, I’m sure many will still continue to confuse Objectives with Strategy due to an ingrained belief that strategy drives everything else (which is a mistake I think Bob has made in his own article).

    Equally so I’m sure many will continue to assert that being strategic implies something is large, important, and long-lived and that being tactical implies something is small, ephemeral, and operational – rather than seeing each as a cascading series of co-dependencies.

    As the Chief Technology Strategist for a national government agency it’s quite apparent that whilst words like strategy and strategic are now used so frequently they risk becoming meaningless, it’s still often the case that the intent behind the strategy remains obscure.

    In closing I will therefore pose you the question of why strategic nuclear missiles are considered ‘strategic’. As in, what mission do they fulfil, and what exactly is the strategy? In my experience it’s not what the majority suppose – however once the mission is understood the strategic means of achieving it (ie: the How) makes a great deal more sense. Hint – it’s got nothing to do with the technology which is merely a means to the end (though hopefully not literally).

  2. avatar

    Thanks for your thoughtful argument. I do think things are somewhat different in government, where decision-making is significantly more complicated because of all the layers and stakeholders. And in this context, titles may matter.

    But I think you have it upside down. My objective in this short note is not “terminology” – it’s the idea that Strategic IT Planning ia about how IT will help management to succeed. You will note that the very first thing I mention is “What does management intend to do” ? This is much more powerful an idea than “mission” or “strategy” or “objectives” … because it defines exactly the directions and actions that management intends to take. It is from this that the second thing is “How exactly will they use IT to do it ?” This is the IT Use Vision: how it will be used by the organization and its management. And this is the nub of it: gaining agreement on what IT will contribute. This is the essence of vision.

    And – by the way – I am puzzled about how “objectives” come in front of “strategy” (if I’m to use that vocabulary.) How did those objectives get determined ? What informed that decision ? Again, it’s “what does management intend to do.” Also – your point is that vision drives things; again, I ask, how exactly does that vision get agreed to? Again, I say – Vision is based on what management intends to do. Unless management intends to do something, who cares?

    My point is like yours — that the titles themselves (mission, strategies, etc.) are essentially meaningless. As an aside — most organizations have wonderful mission and strategy statements, but seldom actually do anything about them. They don’t lead to things they actually intend to do.

    So — the ultimate point I’m trying to make is that using words that no on agrees on (and you make that point very well)doesn’t get us anywhere. Focusing on management’s intentions – and how IT is to be used -does.

    Again, thanks for a stimulating comment.

  3. avatar

    I was immediately drawn in by the allure of a headline which (at last!) stated that “Strategic IT Planning [should be about] Getting the Business of IT Right”.

    However, having read the article I find it doesn’t really match the promise of the headline because it seems more concerned (yet again) with the business of the business rather than the business of IT within the business.

    Interestingly, and this is the point which modern commentators on strategy seem most loathed to admit, surely every organization wants and expect (and needs) the primary concern of their IT division to be on delivering excellent IT – because if they’re not doing that, who is?

    IMHO, anyone who suggest that this shouldn’t be the primary objective of the IT division should be shifted to a position where they can do less damage because delivering efficient, effective, and fit-for-purpose IT is surely the one activity for which no one else is competing – so why shouldn’t that be the primary concern of the IT strategy? Let’s face it – if the core business were running a philharmonic orchestra would you really want the IT division devoting 2/3rds of its IT strategy to orchestrating the orchestra. I think not!

    Of course that doesn’t mean that the conversation between business and IT leaders should be dominated by geek speak (it most definitely should not; in fact, there’s no reason to mention cloud, service oriented architecture, or any other IT fashion); but neither should understanding the core business become the all-consuming concern of IT leadership.

    Strictly speaking, the IT division only needs to know sufficient about the business to deliver on its mission – which, as previously stated, should always be to deliver efficient, effective, and fit-for-purpose IT. And, as a complementary but secondary activity, it can also outline opportunities for business leaders to ponder and potentially invest in.

    By way of an example, do you honestly want brain surgeons to be overly concerned with bed-side manner or business relations? No, you want them to be totally focused on the very latest life saving techniques and technologies.

    Mind you, someone still has to run the medical practice and watch the balance sheet – but that should no more be a brain surgeon than it should be the CIO or CTO or CKO.

    So, by definition, I’d have thought it was pretty obvious that an IT strategy should, first and foremost, be about IT, and about the business of running the IT division, and about how what IT does aligns with and support the business and helps it prosper — no more, and no less.

    But that focus on IT doesn’t imply a blinkered approach because an effective IT mission and supporting strategy can only be developed with a thorough understanding of what the (core) business is and also its driving forces as expressed through the business mission, objectives, and strategies.

    The point I’m trying to make is that perhaps IT should mind its own business (and by that I mean tend to the business of delivering IT); and equally so, core business units should also mind their own business.

    Naturally that doesn’t preclude the formation of a strong symbiotic relationship between core business and the various service elements which support it, but that necessary familiarity should be a guide not a distraction to delivery efficient, effective, and fit-for-purpose strategies whether those be for IT, HR, Finance, Sales, Marketing, Recruitment, or whatever else helps run the business.

    And even if the core business were IT – rest assured that the business strategy needed to run a successful IT business is quite different to the IT strategy which supports it. Ask someone who’s worked for any of the big 4 software houses and they’ll tell you there’s a massive difference between the business of developing and marketing software, and the IT strategy required to help run that business successfully.

    In summary: To take the lead of a previous commentator, IT divisions would do better to develop co-dependent IT missions, objectives, strategies, and tactics which are expressly designed to help that IT division become the very best IT division it can be, because in so doing they really are helping the core business to be the very best business it can be.

    As for your suggestion Bob that an IT strategy is about “Fleshing out what the business is about and what management is intending to do …”.

    I agree that some fleshing out is always required, but isn’t it really the responsibility of business leaders to clearly and unambiguously communicate their wishes to the various delivery divisions on which their business success depends, rather needing for that to be tease out?

    In this regard perhaps IT leaders should stop beating themselves up about not being sufficiently business savvy, and commentators should stop inferring that CIOs (and indeed all IT professionals) are only concerned with technology; and instead all IT practitioners should be exploring ways to encourage (and expect) their counterparts in business to step up to the plate and become a bit more IT savvy.

    Now wouldn’t that be a refreshing change!

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