INFORMATION TECHNOLOGY STRATEGIC PLANNINGEdward K. Hong

IT Consultant

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Major driving force behind any business today is change The following factors shape today’s business

climate, and the pace of change is quickening. New technologies, more sophisticated

consumers, new alliances, radical shifts in buying patterns, global competition.

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IT solutions

IT solutions must also keep pace, so that they remain aligned with business needs.

Understanding an enterprise’s IT requirements and providing innovative IT solutions are essential to keeping a business flourishing.

IT strategy based on a shared vision with stakeholders is critical to any successful enterprise and requires continual updating.

IT strategy must address 4Business drivers

Cost-effective IT solutions to help improve business performanceIdentification of a target IT environment to achieve the enterprise’s vision and goalsAlignment with the business plan and satisfaction of client and senior management expectationsSpecific management processes and practices to establish or improve themIdentification of the most cost-effective way to integrate these processesOpportunity areas where IT can help the business gain a competitive edgeIdentification of actions needed immediately and in the future

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Building Blocks to Strategic Planning

To address these issues and ensure that the IT strategic plan aligns with business needs, three building blocks are necessary.The three building blocks of strategic

planning The strategic-planning approach ensures that IT initiatives and projects add value to business operations and performance.

1. IT assessment2. Business and IT alignment3. Initiatives planning

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IT strategic plan

An IT strategic plan must ensure that business needs are the driving force for technology solutions.

The plan must keep in mind business productivity and effectiveness, cost reductions, revenue generation, and customer satisfaction.

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Three building blocks

• What are the issues, problems, and requirements that IT must address to deliver outstanding service to its customers?

IT assessment

• Understanding business drivers, management expectations, and customer requirements for IT solutions is important.

Business and IT alignment • Once issues and

business requirements are understood, the next step is to formulate initiatives to address needs.

Initiatives planning

Issues and problemsCritical items require fixing A longterm strategy must plan.

Internal IT requirements Require investments in technology to improve service deliverynew hardware and software management process improvements.

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IT Assessment

To understand whether you’re delivering quality services to your users, you should perform a self-assessment of your capabilities.

Assessment should encompass three major areas: strategy and planning application development Systems management.

In addition, you should conduct a customer survey to gauge whether your customers perceive you the same way you perceive yourself.

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A simple way to conduct a self-assessment

To determine the critical elements in these three areas for delivering good service to your customers.

Decide how important these elements are to the organization and how effectively the organization currently performs them.

The gap between importance and effectiveness should help determine the priority for correcting some of the issues so that the importance and effectiveness ratings converge.

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IT Assessment

All managers in the organization should participate in taking the self-assessment.

Once the results are tabulated, the largest gaps (accumulated to one decimal place) will show the priority of the items to focus on.

These items become initiatives, or projects within an initiative, during the initiative-planning step.

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Three building blocks

• What are the issues, problems, and requirements that IT must address to deliver outstanding service to its customers?

IT assessment

• Understanding business drivers, management expectations, and customer requirements for IT solutions is important.

Business and IT alignment • Once issues and

business requirements are understood, the next step is to formulate initiatives to address needs.

Initiatives planning

The IT strategic plan must reflect business needs. You must determine what the business needs are.

A scan of available technologies will identify possible solutions for business requirements.

1.Business drivers2.Management expectations3.Available technologies

Business Drivers13

Business Drivers

• Industry consolidation• Shortage of critical skills• Regulatory uncertainties• Product time to market• Competition• Quality products and

services• Operational cost

reduction• Customer loyalty• Revenue growth

Some of the common business drivers and their implications for IT solutions.

Not all of these drivers will apply to

your company’s situation, but this list can provide a base to

work from as your business tries to define its critical

elements.

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Industry consolidation

A company must be positioned to assimilate and integrate acquired companies’ IT infrastructures without affecting business users’ productivity.

Your company might need to extend its business systems to accommodate new users and integrate acquired companies’ applications into the existing IT environment.

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Shortage of critical skills

Demand for talented business and IT workers normally exceeds supply.

You must capture IT and business knowledge and distribute it in a reusable form so that new staff can become productive as soon as possible.

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Regulatory uncertainties

Government and industry policy changes affect internal operating procedures and reporting requirements.

Architecting an environment for maximum flexibility is necessary so that your company can assimilate mandatory changes without major rework of the computing infrastructure and applications.

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Product time to market

Getting products and services to the marketplace first can give your company a tremendous advantage in gaining market share.

Providing technology solutions to shorten the product development cycle will get products to market more quickly than those of the competition.

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Competition

Today’s global business environment is dynamic and highly competitive, forcing companies to be more creative in innovating products and in taking a more entrepreneurial approach to business.

IT must build solutions to leapfrog competitive products and services and to provide knowledge workers with the right information at the right time to make informed business decisions quickly.

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Quality products and services Delivering quality products and services

to customers is critical to maintaining customer loyalty.

The cost of correcting quality problems after delivery directly affects a company’s bottom-line profit.

IT must provide systems to detect quality issues before products are delivered to customers, thus reducing the cost of quality.

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Operational cost reduction

Reducing operational costs is critical to a company’s profitability.

IT will need to quickly and accurately develop new applications to support changes in business processes.

Systems availability, performance, and access to the right information on demand are critical to reducing errors and delays in business operations.

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Customer loyalty

Keeping your customers is critical to maintaining and increasing your company’s market share and profitability.

When customers are satisfied with products and services, a company can market complementary products and services.

IT must provide capabilities for mining customer data to understand customer satisfaction, buying patterns, and propensity to buy, thereby increasing revenue.

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Revenue growth

Growing business revenue is crucial for business health. It’s not enough to just reduce operational cost to improve profits; the business must show new, innovative ways to increase revenue.

IT needs to help the business speed up its product development cycle to get products to market ahead of the competition.

In addition, innovative uses of technology, such as e-commerce, can reduce errors and business process delays in closing customer orders.

Management and Customer Expectations

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Management and Customer

Expectations• Customer focus• Alignment with

business• Performance• Innovation• Responsiveness to

change• Cost-effectiveness• Access to information• Security• Quality

Some of the expectations the author has accumulated over the years.

You can use these

expectationsas a starter set to accelerate the interview

process.

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Customer focus

Foster proactive relationships with customers to ensure that IT is considered a de facto member of each business unit’s team.

IT must clearly understand all customer support requirements and routinely exceed customer expectations in terms of project delivery, quality, and systems reliability, performance, and availability.

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Alignment with business

The IT strategy must align with business directions and priorities so that IT solutions contribute to the enterprise’s success.

This means developing the IT strategy in collaboration with business units so that IT solutions can improve business performance.

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Performance

The IT organization must establish the right measurements so that it can consistently meet or exceed service-level goals, including system availability, systems performance, project delivery, and financial budgets.

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Innovation

IT should innovatively use technology to improve business performance.

Working with business units, IT management should recommend technology solutions to address revenue generation, profitability, cycle time reductions, and staff productivity.

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Responsiveness to change

The IT organization must be responsive and adaptive to change.

It must be able to integrate acquired companies’ information systems into its business systems infrastructure without completely rearchitecting its environment.

This means investing in an infrastructure that gives the enterprise the flexibility to support a broad range of heterogeneous information technologies necessary to meet business objectives.

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Cost-effectiveness

The IT organization must justify all expenditures, showing a realistic ROI in IT infrastructure and business solutions.

IT must also improve its own productivity by minimizing labor-intensive activities and eliminating errors in its delivery process.

IT cost must be competitive to avoid the threat of business units outsourcing their technology solutions to outside vendors.

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Access to information

The IT organization must give business users access to information on demand in user-defined formats.

Information should be integrated so that all relevant information in a given subject area is available for analysis and reporting when required.

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Security

The IT organization must provide secure access to its infrastructure and business systems.

It must prevent penetration into the IT environment by unauthorized personnel, including internal and external individuals with malicious intent.

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Quality

The IT organization must strive to deliver error-free results to its customers. It must establish the structure and processes

necessary to manage and control the IT environment so that changes to the environment don’t affect customers.

IT must be proactive in identifying potential problem areas and correct them before they impact customer productivity.

IT must plan, track, and control its projects so that it can deliver them on time and within budget and satisfy business expectations.

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E-commerce

Electronic communications with customers can increase revenue, improve customer loyalty, and shorten the operational process.

In addition, many e-commerce applications, such as order entry and status checking, can improve internal business productivity by offloading work to customers.

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Business to business

Your company must be able to conduct business online with your suppliers and business partners to speed up the value chain.

Therefore, you must continually find better ways to exchange information with the extended enterprise because vendors and suppliers are critical to reducing cycle time.

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Integration

The integration and interoperability of applications built on multivendor platforms or multiple database environments are the norm

In today’s environment, integration and reuse of legacy functions and data must be easy so that you can avoid incurring expenses to redevelop these functions and data.

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Mobile computing

Providing any-time online information support to employees, regardless of where they’re located, is critical for global organizations.

Employees become more productive because they can access information systems without being connected to telephone land lines or a specific IT worker’s office location.

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Telecommuting

Today’s technology makes it feasible for employees to work anywhere.

By using advanced communication technologies, virtual teams can be effective even if team members reside in different continents and time zones.

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Predictive analysis

The company should use predictive-analysis techniques and tools so that business units can understand trends on the basis of historical information.

This enables proactive action to prevent problems from impacting the business and to improve business performance.

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Component-based development

The pressure to improve delivery of IT commitments will continue to grow as the pace of business changes accelerate.

Organizations must position themselves to meet this challenge. One way to do this is to shorten the

application delivery cycle through reuse of components in building applications.

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Knowledge reuse

In today’s IT world, expertise is often in short supply. Consequently, you need to capture expert knowledge in the organization and leverage it by making it readily available and comprehensible to less-experienced personnel.

Once captured, this knowledge can minimize the pressure to find skilled personnel, especially when experts leave the organization.

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Security

With public access to some of the company’s systems, extra precaution is necessary to prevent inadvertent access to confidential data.

In addition, viruses, worms, and hackers are constant threats to the security of IT systems.

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IT Business Model

In addition to addressing technology issues and solutions, goals should also address how to interface and interact with stakeholders.

The IT business model provides the high-level technology direction for the company. It’s the basis for formulating the strategic-plan initiatives.

Critical success factors

Goals

Mission

The IT business model consists of IT’s mission, goals, and critical success factors, which are based on business drivers, technology drivers, and customer and management expectations.

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Mission

The IT organization’s purpose is to support the enterprise’s business plans and meet or exceed customer expectations.

IT must work collaboratively with business units to help achieve business goals.

Therefore, the mission statement should say something like, “Improve business performance through innovative IT solutions.”

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Goals

A company’s goals are the broad, longterm results it wishes to achieve, to support its mission.

Examples of goals that the entire IT organization should buy into include the following. Ensure customer focus. Align with business needs. Leverage technology. Maintain industry-recognized processes. Ensure service quality and continuity.

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Ensure customer focus

IT must recognize the importance of “the voice of the customer” by listening and communicating effectively and trying to understand the customer’s business and priorities through joint planning and close collaboration on initiatives.

It must also act as the catalyst in providing innovative technology solutions to solve business issues.

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Align with business needs

IT must understand business strategic goals and initiatives so that technology strategies and initiatives can help achieve business goals.

Technology investments must deliver added-value results by improving business performance.

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Leverage technology

IT must strive to be the “go to” organization for technology issues within the business.

It must achieve breadth and depth in its technology skills set so that there will be few questions IT can’t answer.

By using advanced or existing technology, IT must design innovative ways to improve productivity and business performance.

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Maintain industry-recognized processes IT must continually refine and improve

infrastructure and project management processes.

Processes require continuous improvement because the environment in which they operate is constantly changing.

Environmental factors such as customers, infrastructure, governance, automation tools, adherence issues, and organizational reporting influence processes.

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Ensure service quality and continuity Ensure that IT services are responsive,

reliable, stable, and available and that they meet or exceed customer performance expectations.

IT must proactively identify potential problems through metrics and trends before they impact service to customers.

IT must also protect and recover computer assets from malicious destruction and from unforeseen disasters.

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Critical success factors

CSFs influence whether IT can achieve its stated goals. CSFs are normally point-in-time items, meaning they can change depending on the criticality they have on the current business and IT environments.

The environment keeps changing, so CSFs may also change accordingly. Some CSFs that could affect a strategy’s implementation include the following: Customer satisfaction Funding Culture change Continuous process improvement Buy-in to a clearly articulated strategy

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Customer satisfaction

• IT must establish formal partnerships with its customers, understand their business requirements, and consistently exceed customer service expectations.

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Funding

As long as there’s a demonstrable value to the business, funding must be available for technology initiatives. The business must explicitly define priority-setting criteria to help IT formulate its initiative plans.

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Culture change

IT must focus on providing better services and communications to customers by instilling a sense of urgency, ownership, teamwork, responsibility, and pride in daily activities.

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Continuous process improvement IT must continually improve its

management processes so that it can deliver responsive, outstanding service to its customers.

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Buy-in to a clearly articulated strategy Buy-in from senior management,

business units, and the IT organization is critical to achieving the goals, strategies, and initiatives outlined in this plan.

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Three building blocks

• What are the issues, problems, and requirements that IT must address to deliver outstanding service to its customers?

IT assessmentInitiatives refer to the actual work that must be done.They’re also the key elements that align the IT strategy with the business.

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Initiatives Planning

Initiatives are long-running programs that create business solutions and internal IT

improvements on the basis of business drivers, customer and management expectations, and the gaps identified through the self-assessment.

that could continue for several years. The strategic plan should identify multiple

projects for each initiative—each having its own scope, costs, schedules, and deliverables. All projects within an initiative should contribute

to achieving that initiative’s goals.

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Initiatives Planning

Because organizations have limited resources, you should prioritize the initiatives on the basis of value returned to the business. This will require developing a high-level

business case to rank the work, slotting lower-priority items for later years.

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Technology Strategy Roadmap

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The strategic plan

It’s the end result of the three building blocks just discussed.

Developing a strategic plan in this manner can help ensure the alignment of business needs and IT activities.

Benefit the enterprise in several ways. provides a clear roadmap for important items. everyone will be “rowing” in the same direction. business financial team will have a high-level view of IT

funding needs each year. This is a great way to motivate user departments to buy

into the strategy because they’re intimately involved in the strategy development process.

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Q&A

THE END