Developing an IT strategy that is understood and accepted by the business and IT practitioners is a major challenge for many businesses. A lot of effort is invested in developing an elegant strategy, the future state architecture is sound and the board is pleased. Still, beyond one or two new projects, the strategy fails to get traction and there is large gap between the strategy and quality of the results.
Unlike most strategy consultants Kogekar Consulting have extensive experience in execution planning. We have helped clients create IT strategies that are well understood and effectively executed. Here we summarise key learning from our experience – how to plan an effective IT strategy and engage stakeholders.
Creating an IT strategy that is understood and effectively executed by the stakeholders has been a difficult challenge in many IT Groups. This is rarely acknowledged but results in a lack of adoption or operationalization. There are many reasons for this:
- Focus of the strategy tends to the board or C-level team, which make the document too high level for the typical middle manager whose support is needed for implementation.
- Strategists and architects, who focus on big ideas, typically drive strategy development and complex concepts. These concepts are difficult to execute, thus they appear to be disconnected from the on the ground realities of IT. Practitioner involvement can provide a different type of thinking, which enhances the abilities to execute the strategy.
- Strategy needs to take account of people and operational realities. Often there is little effort made to engage with stakeholders like key business managers, IT middle managers and experts during the strategy development process. Lack of engagement further reduces their buy-in. However, these stakeholders are absolutely essential for bringing realism and ‘owning’ strategy execution.
- Few understand that a good strategic planning process also requires the utmost attention to the ‘hows’ of execution. It’s substance and detail must come from people who are closest to the action and understand their customers, resources and capabilities.
- Many strategies underestimate the effort required to create the new organisational capabilities. Strategies also fail to provide a framework for identifying and developing talent – at all levels – talent that is needed to execute the strategies.
- One key aim of the strategy is to establish a direction and state ‘how we shall operate”. The specific programs and initiatives get all the attention, and overshadow the underlying philosophy.
The successful execution of the strategy requires that not only the board and senior executives of the company approve the strategy. But also, other stakeholders like department managers, project leaders and key support staff understand the strategy and are clear about their role in the execution. Strategy execution requires going down from a 50,000 ft to may be 50 ft level. This requires identification, prioritisation and implementation of very specific actions. Many organizations don’t realise the contribution practitioners can make to a realistic execution planning.
Strategy planning is a great opportunity for engaging stakeholders. It provides a process to understand how well IT is supporting the business, where the business is headed, how the business and technology landscape is changing and what we must do to improve our effectiveness. It is also an opportunity to communicate, “what we shall do differently” because if nothing changes, the new strategy becomes just a piece of paper.
Strategy Development Process
The strategy process is a four-step process:
1) Where are we now?
2) How is the business/ IT landscape changing?
3) Where do we want to be?
4) How do we get there?
- Where we are now? is a comprehensive analysis of the current state of IT in the organization including, what IT does well, how well IT supports the business, how our costs and services compare with others, how flexible or adaptable we are, what the major risks and shortcomings are? Understanding where we are and how we got there is critical to a sound strategy. In this conversation, input is sought from the business leaders, process owners, IT architects, managers and specialists.
- How is the business / IT landscape changing? This step is to understand the drivers of change. Often technologists focus only on technical changes e.g. SOA and not other areas. Changes to the business operating conditions and business strategies are an essential driver. Changes in the competition, their strategies and investment programs, and the advent and industry adoption of new technologies are other change drivers. Emergence of new third party services and service providers can also change the IT landscape. Change in regulation such as GST, anti-money laundering or email discovery create yet another change dimension.
- Where do we want to be? Understanding of the current situation and the changing landscape leads us to choices about the desired future state. Stakeholder perspectives are important here as well. How can we best support the business in the future? What capabilities are needed? What do IT staff wants? These multiple perspectives the shape the future state. They will determine shape of the future organization, the technology architecture and what competencies are needed.
- How do we get there? Sub-strategies and roadmaps, which move the organization from the present to the future form the migration, plan. Organizations often become too focussed in the migration plans and tend to forget the underlying reasons or principles that guide the migration.
Key Lessons for IT strategy development
- IT strategy requires strong sponsorship and participation by the CIO or the IT head. Enterprise strategies driven by head of architecture or other such functional heads have limited chance of success. Support from other C-level executives is necessary for a strong business engagement.
- It is a mistake to consider IT strategy development as an exclusive ivory tower exercise. Design it as a participative process, allowing stakeholder engagement. Identify key stakeholders at the start of the process.
- Strategy / planning managers in business and in the CFO’s office can provide great input on business strategy.
- Business process owners and project managers can provide input on the current state and help with a realistic migration plan
- IT managers and key specialists need to be convinced that the strategy addresses their challenges and is realistic. Getting buy-in from key opinion leaders helps greatly with the credibility of the strategy credibility in the eyes of the troops.
- Teams respond well when treated in a mature manner. Allow their manager to lead the communication/ feedback sessions.
- IT centric strategies don’t work. There needs to be a strong linkage with business strategy (written or unwritten).
- Current state analysis often focuses on architecture and technology issues and ignores organisational capabilities, risks, people and leadership issues. Understanding current service and project delivery capability would provide a stronger foundation for strategy.
- IT strategies tend to be too ambitious, hoping to achieve a major turn around in technology, people culture and processes in a relatively short time frame. Considering legacy systems and COBOL have been in place for nearly 40-50 years, one has be realistic about organization’s ability to change. Focus the effort on critical improvement drivers.
- The need to develop people capabilities is often forgotten in the rush to new applications or technologies. But without the right people these new technologies will not deliver to their potential.
- Strategy defines where we want to go. It must be followed by an operating plan, which defines the path, the one-year goals, programs and initiatives. If the operating plan is not based on realistic assumptions, there is little chance of success.
- Including guiding principles for architecture and operating models in the strategy allows greater clarity and provides guidance to the entire organization. Otherwise only the teams working on new projects are engaged in the strategy.
- Use of strategy themes and distinguishing high priority items from others will provide flexibility in implementation and allow adjustment as funding and priorities change over time.
- Use of balanced scorecards for managers and team helps track the implementation progress on a number of dimensions.
If you would like help with your IT strategy development or more information, please contact us.
Kogekar consulting has assisted banks, insurance companies and other major organizations to develop strategic plans, roadmaps and architectures. For these we integrate the strategy development steps with stakeholder participation and communication activities. Our approach moves the strategy development process out of the ivory tower and increases the organizations buy-in and improves adoption.