Transcript Information Technology Strategic Planning

INFORMATION
TECHNOLOGY
STRATEGIC PLANNING
Edward K. Hong
IT Consultant
Major driving force behind any
business today is change
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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.
IT solutions
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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
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Business drivers
Cost-effective IT solutions to help improve business performance
Identification of a target IT environment to achieve the enterprise’s vision
and goals
Alignment with the business plan and satisfaction of client and senior
management expectations
Specific management processes and practices to establish or improve them
Identification of the most cost-effective way to integrate these processes
Opportunity areas where IT can help the business gain a competitive edge
Identification of actions needed immediately and in the future
Building Blocks to Strategic Planning
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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 assessment
2. Business and IT alignment
3. Initiatives planning
IT strategic plan
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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.
Three building blocks
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Issues and problems
Critical items require fixing
A longterm strategy must plan.
• What are the issues,
problems, and
requirements that IT
must address to deliver
outstanding service to
its customers?
IT assessment
Business and
IT alignment
• Understanding business
drivers, management
expectations, and
customer requirements
for IT solutions is
important.
• Once issues and
business requirements
are understood, the
next step is to
formulate initiatives to
address needs.
Initiatives
planning
Internal IT requirements
Require investments in technology to improve service delivery
new hardware and software
management process improvements.
IT Assessment
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
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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.
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In addition, you should conduct a customer survey to
gauge whether your customers perceive you the same
way you perceive yourself.
A simple way to conduct a self-assessment
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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
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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.
Three building blocks
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A scan of available technologies
will identify possible solutions for
business requirements.
• What are the issues,
problems, and
requirements that IT must
address to deliver
outstanding service to its
customers?
1. Business drivers
2. Management expectations
3. Available technologies
Business and
IT alignment
• Understanding business
drivers, management
expectations, and
customer requirements
for IT solutions is
important.
• Once issues and business
requirements are
understood, the next
step is to formulate
initiatives to address
needs.
IT assessment
The IT strategic plan must reflect business needs.
You must determine what the business needs are.
Initiatives
planning
Business Drivers
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Business Drivers
Some of the common business drivers and
their implications for IT solutions.
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Industry consolidation
Shortage of critical skills
Regulatory uncertainties
Product time to market
Competition
Quality products and
services
• Operational cost reduction
• Customer loyalty
• Revenue growth
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.
Industry consolidation
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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.
Shortage of critical skills
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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.
Regulatory uncertainties
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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.
Product time to market
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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.
Competition
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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.
Quality products and services
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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.
Operational cost reduction
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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.
Customer loyalty
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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.
Revenue growth
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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 ecommerce, can reduce errors and business process
delays in closing customer orders.
Management and Customer Expectations
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Management and
Customer Expectations
Some of the expectations the author has
accumulated over the years.
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Customer focus
Alignment with business
Performance
Innovation
Responsiveness to change
Cost-effectiveness
Access to information
Security
Quality
You can use these
expectations
as a starter set to
accelerate the
interview
process.
Customer focus
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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.
Alignment with business
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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.
Performance
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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.
Innovation
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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.
Responsiveness to change
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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.
Cost-effectiveness
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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.
Access to information
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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.
Security
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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.
Quality
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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.

E-commerce
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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.
Business to business
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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.
Integration
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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.
Mobile computing
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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.
Telecommuting
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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.
Predictive analysis
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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.
Component-based development
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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.
Knowledge reuse
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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.
Security
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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.
IT Business Model
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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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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.
Mission
Goals
Critical
success
factors
Mission
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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.”
Goals
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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.
Ensure customer focus
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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.
Align with business needs
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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.
Leverage technology
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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
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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
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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.
Critical success factors
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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

Customer satisfaction
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•
IT must establish formal partnerships with its customers,
understand their business requirements, and consistently
exceed customer service expectations.
Funding
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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.
Culture change
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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.
Continuous process improvement
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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
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Buy-in from senior management, business units, and
the IT organization is critical to achieving the goals,
strategies, and initiatives outlined in this plan.
Three building blocks
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• What are the issues,
problems, and
requirements that IT must
address to deliver
outstanding service to its
customers?
Business and
IT alignment
• Understanding business
drivers, management
expectations, and
customer requirements
for IT solutions is
important.
• Once issues and business
requirements are
understood, the next
step is to formulate
initiatives to address
needs.
IT assessment
Initiatives refer to the actual work that must be done.
They’re also the key elements that align the IT strategy
with the business.
Initiatives
planning
Initiatives Planning
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
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.
Initiatives Planning
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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.
Technology Strategy Roadmap
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The strategic plan
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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.
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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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THE END
Q&A