MY SAY: Going beyond strategic platitudes
- 24 March, 2004 15:38
Conventional wisdom says that if you’re looking to develop an IT strategy, you start with the business strategy and go from there. On the surface this makes sense, but it almost never works. Business strategies are often vague and downright meaningless. Browse a handful of annual reports, and you’ll see what I mean. Strategic goals such as product excellence, increased shareholder value, growth through acquisition and improved customer satisfaction, don’t say much about what’s in store for the company from a business perspective, let alone what the IT organisation should do.
To create a good IT strategy, IT leaders have to rethink the whole concept of strategy development. Most IT professionals are introduced to the concept of strategic planning by business people, who devise their plans by looking at the marketplace. Business people consider which markets the company will compete in, which products and services they will sell and how they will execute on those plans. That’s great, but it’s very different from the way good IT leaders develop strategy. Let’s assume that a company has the best strategic business planners in the world. These business planners have scanned the market and have developed a fully fleshed-out plan to build and sell products. They even have an excellent operational plan. Even in this unlikely scenario, the business strategy probably won’t tell the IT leaders exactly what they need to focus on.
A Better Way
Recognising this, the IT leadership corners the business people and tries to “extract” more information from them in order to develop an IT strategy. This doesn’t work, either, because the business people don’t fully understand the IT implications of their business plans.
While developing an IT strategy is difficult, it’s worth doing. Instead of looking at high-level business strategies for guidance, IT leaders should be gathering information about key areas of the business in order to determine their strategy. For example, looking at the following areas will tell you more about what’s in store for IT than those business-plan platitudes:
Geographic expansion and corporate virtualisation: Consider how far the IT organisation will have to extend itself in the coming year. Is the company moving into new geographies? If so, how? Also, look at how IT will have to change or evolve to support an increasingly virtual enterprise. Consider the needs and issues that remote employees and disconnected business partners will present to IT.
Governance and compliance: How is the company planning to make key decisions in the future? With a renewed focus on corporate governance, IT decision-making is evolving in many companies. These changes will affect the kinds of IT initiatives that are funded in the coming years. Also consider how compliance with the latest regulatory requirements will influence IT priorities.
Future of the business: How is the business evolving? A company that’s changing from being a manufacturer to being a marketing company is going to see a major shift in its IT priorities. Consider what the IT road map might look like as the business undergoes its transformation. This is also a good time to look at how customer needs are changing and how those changing needs will affect IT.
Business attitude toward IT spending: For the past two years, most companies have been in a cost-cutting mode regarding IT, which has had a significant effect on IT strategies. As the economy improves, consider how business leaders’ attitudes toward spending money on IT will also change. Consider whether the willingness to invest in IT will keep pace with the economic recovery.
IT leaders will still need the help of business executives to develop an IT road map. But they shouldn’t expect the business strategy to miraculously lead them to an IT strategic plan.