- 1Developing a New Strategic Planning Process
- 2Start Fresh with a New IT Roadmap
- 3Strategic Planning Software: Moving Beyond Spreadsheets
- 4Strategic Planning: How to Build a Roadmap to Transformation
- 5Strategic Management as Usual Is Inadequate Today
- 6IT Strategic Planning: Managing Change in the Realm of Digital Transformation
CIOs: Leading the Way with IT Strategic Planning
De fyra centrala komponenterna i en strategisk planLäs vitbok • De fyra centrala komponenterna i en strategisk plan
Enterprise Architecture: Essential for Digital Transformation
Se varför övervägande av Enterprise Architecture i den strategiska planeringen hindrar insatser för digital omvandling från att gå i fel riktning.Read the article • Storskalig arkitektur
Digital transformation, disruptive technologies and constant change are redefining the role of the CIO and the IT organization as a whole. The CIO is in a position to lead digital transformation, transitioning IT from a cost center to a value center, leveraging IT strategic planning to answer the what, why, and how for the business. McKinsey says, “IT needs to facilitate innovation while delivering on their promises to reduce costs and drive strategic outcomes.”
CIOs and IT leaders must work together and partner with the business, focusing on how best to invest in technology that will enable, support, and empower digital transformation. IDC forecasts worldwide spending on digital transformation will reach $2.3 trillion by 2023, with a five-year annual growth rate of 17.1%.
Technology leaders will inevitably play a critical role in helping the company leverage this transformation to:
- elevate the customer experience
- mitigate risk to ensure proper security
- become more agile about change
Since IT strategic technology investments underpin the company’s strategic objectives, then IT strategic planning serves as a business-aligned IT roadmap that provides clear strategic direction and priorities. The planning process is vital to realizing the right set of outcomes. As CIO points out, “It is important to ensure tight integration with the business strategy.”
How IT and Business Strategies Align
The business and IT are inextricably linked. There is no difference between business strategy and IT strategy.
CIOs must step outside of the IT organization and understand what is important to business leaders to deliver value and drive growth. The IT plan must consider current and future business objectives, as well as remain adaptable as priorities change.
McKinsey’s 2018 IT strategy survey found that leading IT organizations are much more likely than others to have the CIO “very involved” with shaping the business strategy and agenda. Clearly, the business strategy cannot succeed without supporting it with the right technology investments. Effective businesses will prioritize technology during the IT strategic planning process and with every strategy discussion.
What Is an IT Strategic Plan?
The result of the IT strategic planning process is to develop a roadmap for how business objectives will be achieved. It outlines the technology and resources required to drive business outcomes, understanding that funds must be prioritized and directed to the highest-value investments, within resource constraints.
Ultimately, the IT strategic plan impacts how well the enterprise performs because technology is what lays the foundation for innovation, growth, and consistently creating value for the customer.
The IT strategic plan answers the questions of:
- what technology investments are needed to achieve specific business objectives
- what internal and / or external resources are required
- how success will be determined and measured
The IT strategic plan enables the realization of organizational change. Digital transformation must include four key elements:
- Clear prioritization across silos
- A big-picture view and a pragmatic view
- The enabling of agile execution
- Understanding the impact of disruptions – quickly
The Need for IT Strategic Planning
During periods of change, developing a strategy that adapts and embraces change is vital. Without an IT strategic planning process or the ability to respond to change, disruptions can cause delays that prove difficult to recover from.
The strategic plan is the roadmap on how to achieve business objectives. McKinsey is clear: “Strategic planning is approached as a dynamic process that allows teams to be agile and adjust resources (people and money) where needed.”
As critical as strategic planning is, there seems to still be a disconnect. Gartner reports that only 23% of CIOs rated their organizations as effective or very effective at business strategy and planning, and only 29% rated their organization as effective or very effective at IT strategy and planning.
When executed properly, as a continual and iterative process, IT strategic planning enables the organization to:
- rapidly respond to change
- stay focused on high-value programs
- reduce costs by funding the right technology for digital transformation
IT strategic planning also considers the current and desired future technology state to hone security and risk management practices as well. Forrester says one of the biggest security drivers today is the changes in how people work, forcing IT to take a hard look at how they purchase and deploy new devices to enable a remote workforce. Changes in remote workforce policies demand the adoption of new security technologies, all of which must be part of the planning process.
One of the biggest benefits of IT strategic planning is that it allows for enterprise cost optimization to drive costs out of waste areas and redirect those funds to more valuable investments. The planning process helps the enterprise become more efficient, transparent, and streamlined with its funding.
Finally, because IT strategic planning involves the entire enterprise, it promotes cross-functional communication and collaboration to better understand:
- The customer – changing wants, needs and expectations, as well as their current experiences and areas to improve
- The market – changing landscape, competitive context, and opportunities to increase market share
- Innovation progress – bottlenecks and gaps that hinder growth
- Investment priorities – the impact of investments across the portfolio and changing priorities
- Disruptive technologies – artificial intelligence, machine learning, the cloud, IoT apps, mobile, social, and analytics
For all of these reasons, the need for IT strategic planning is evident, however, there is yet one more driver. Fortune 500 companies and government agencies that make it a priority report experiencing a return on their investment as high as 700%.
Stages of the IT Strategic Planning Process
Stakeholders must follow an organized process for IT strategic planning to yield an actionable plan. There are four phases to the process, building on one another to inform decisions.
1. Discovery Phase
During the discovery phase, the CIO and IT leaders will work with business units to identify issues and opportunities, as well as obtain cross-enterprise buy-in. Because the IT strategic plan supports business pursuits, it is important to understand the business strategic goals, objectives, and relative priorities.
2. Analysis & Funding Phase
The analysis and funding phase in IT strategic planning give leaders the opportunity to analyze stakeholder feedback; perform a SWOT analysis; and understand options and make tradeoff decisions with scenario planning. HBR says, “Strategy, at its most basic level, is a set of choices and trade-offs about where an organization will invest, compete, and win. Most executives struggle to understand the implications of not making effective trade-offs.”
Once leaders align IT goals and objectives with those of the business, they must assess the required resources in terms of people, technology, and funding. If any one of these resources is insufficient, the strategy must be revised, or other priorities adjusted. Continuous planning and funding aligned to strategy create necessary financial controls focused on results and answers “what are our desired results and how much should we plan on investing to obtain them?”
3. Execution Phase
The purpose of the execution phase in IT strategic planning is to define the deliverables and outcomes as they relate to the business objectives, as well as discuss dependencies, risk mitigation and sequencing. Now is the time to outline and further prioritize long-term and medium-term IT goals and objectives, and then build a plan with a roadmap that connects strategy to the investments and outcomes that will drive transformation.
Include a budget, timeline with milestones, roles and responsibilities, and KPIs with measurement timelines. All must be then communicated to and aligned with the groups involved.
4. Measurement and Review Phase
Finally, the measurement and review phase offers the opportunity to benchmark success and create a feedback loop that informs decisions about whether the plan needs revision. The plan can be adapted based on what’s been learned, change, shifts in strategies, or other influences that impact whether the current strategy deserves continued funding. IT strategic planning is continual and iterative, ensuring it is always relevant and the guiding force behind all work.
IT Strategic Planning Use Cases
IT strategic planning has many use cases. Below are three of the most common scenarios where proper planning reaps benefits.
Transformation and Optimization
When it comes to transforming and optimizing the enterprise, IT strategic planning enables enterprise architects to support business and technology leaders on their varying transformation and optimization initiatives. It allows leadership to get a comprehensive, big-picture view of those transformations.
IT strategic planning enables architecture and technology teams to be integrated into the organization as valuable contributors to initiative planning that drives strategy to delivery. For instance, enterprise architects can work with portfolio managers to create what-if scenarios that account for changes in funding, considering impacts and tradeoffs in technology implementation and capability enhancements.
IT strategic planning
- drives comprehensive scenario-based investment capacity planning
- analyzes and allows for adjustments to funding to make sure there is room for investments
- visualizes transformation technologies side-by-side to inform investment decisions with risks and trade-offs considered
Assessing and Managing an Evolving IT Portfolio
IT strategic planning enables IT leaders to engage in informative conversations about their portfolio inventory, including dependencies and risk assessments. Feedback loops can be established during planning and execution activities to understand the business impacts of investments. This serves to help leaders make decisions about investments, how best to direct funding, and how those investments impact the portfolio and business.
Reliable data informs decisions about whether to replace, sustain, decommission, remediate, re-platform, consolidate, or enhance an application. It also gives executives insight into the cost and benefits of the new transformational state being recommended.
For enterprises focused on innovation, IT strategic planning enables enterprise architects to drive innovation and answer “how do we innovate?” It consists of several steps:
- Current state analysis and problem discovery
- Idea voting and ranking
- Reporting and analytics
- Decision and direction
- Impacts of change and investments
Qualitative analysis reveals what might be a good investment, while quantitative analysis identifies inadequacies and opportunities to innovate. By leveraging ideation to collaborate with internal and external stakeholders on future technology and investments, enterprise architects play a pivotal role in helping the business focus on developing high-value strategies.
What IT Strategic Planning Is Not
Gartner says that IT strategic planning is not the process of developing strategies that “only end up gathering dust on a shelf.” Instead, it must communicate how the business will prioritize investments and execute, compete, and lead.
Make no mistake, this is not a list of desired financial investments or technologies. IT strategic planning assesses what investments and technologies will achieve business goals while also considering the impact of funding them.
No one should go into the planning process with the goal of coming out of it with a perfect annual plan. The objective is to stay focused on what matters and not get tactical. The IT strategic plan must be a dynamic framework that allows for team autonomy to deliver and embraces change.
Some of the most common pitfalls in the planning process are to be too ambiguous and create unachievable goals. The plan must be detailed with IT outcomes required to achieve business outcomes, going so far as to assign roles and responsibilities with clear goals and timeframes. These are not lofty goals that have little chance of success because of a lack of resources or corporate alignment, but ones that may be ambitious but attainable.
IT Strategic Planning Is the Playbook
IT strategic planning shouldn’t be a dreaded practice. CIOs and IT leaders can’t afford to be nearsighted, focused on the day-to-day thinking instead of where they want to take the business. IT strategic planning is the game plan of how your organization will reach its objectives and ensures all decisions have a guiding north star.
While the process requires full attention from across the enterprise, it keeps everyone working together to drive measurable business outcomes. It allows business units to be more agile, autonomous, focused and accountable, and ensures investments and funding are in line with what matters most. With effective planning, there will be fewer roadblocks which leads to faster time-to-market, greater innovation and an enterprise that is more resilient to change.
IT strategic planning offers an integrated portfolio view that connects strategy to delivery, serving as the catalyst to realize strategic objectives for growth, innovation, and operational efficiency. With a standardized process in place, IT is able to break down strategic initiatives to deliver value incrementally, get feedback, and deliver again. As an integral part of the business, IT plays a critical role in digital transformation, impacting the top and bottom lines, and driving the company forward.