The goal for creating five-year strategic planning is in place to focus long term effort and vision though The rate of change in any market is increasing, so it's unwise to assume the 5-year plan will not change once it's been created. A good long term strategic planning should embrace three “C”s: Context, Cascade, and Creativity.
IT strategy is an integral part of business strategy, CIO must consider business relevant factors in order to create effective strategic planning to well align business vision and strategy, more specifically, what are key factors in such five-year IT strategic planning?
1. The Most Important Factor Is the 5-Year Business Strategic Plan
First and foremost, to have an effective "IT Strategic Plan", you must first have a clear and usable "Business Strategic Plan".
- The most important factor is the 5 yr. strategic plan for the business. Without that, you can't do proper business-technology alignment. The five-year goals for the business will be high-level, descriptive only in terms of revenue, market position, gross margin, etc. Ideally, the executive team will work backward and plan year 1 (with better certainty), year 2 (with somewhat less certainty) and year 3 (with the best of intentions). Year 5 is only out there as a target everyone is trying to hit.
- Clarify business visions: The IT manager and business stakeholders should work together so IT has a clear picture the desired state. What does revenue look like? How has the business model evolved? What is the desired position in which markets? If these things aren't clear, then there should be no planning for a 5 year IT strategic plan. The goal is to review the plan EVERY year for relevancy and increased clarity
- Predictive Questioning: What's going on in the market? Where are my suppliers headed? Where are my competitors headed? And most importantly, where are my customers headed? You must ask 'why' enough times to uncover the negative factors that create a divide between the vision/strategy of the desired future and the current reality. This builds the foundation for an IT strategy
IT organization as a whole can be considered "critical" to the business, but with defined and proven Business Continuity/Disaster Recovery plans, criticality of IT is relevant as it relates to the varied business needs (emergency or not). If there is a solid strategic plan for the business, then the following factors need be considered:
2. Current IT Maturity and Capability
- Functional Maturity and Capability. Do the functional areas in each part of the business have what they need to achieve the 5-year business plan? In IT: What things are in place that will enable the business strategy? What can be done to strengthen them? What things are in place that will inhibit or endanger the business strategy? What can be done to minimize them? Are the right skills in place? Are costs in line with the 5-year plan?
- Five "WHYs" Reality Tree: The first question to answer is "why are we here?". Current reality trees ascertain the forces creating the current state and thus constraining programmatic efforts to attain the desired state. A detailed description of the current situation including current policies/procedures/ practices, values, and resources associated with the current reality. Participants in the planning must ask probing questions to get deep down to the underlying or “root causes” that brought IT to its current state. Some “roots” are problems - others are strengths. Both should be explored. The success to executing a current reality tree is to ask the key question” “Why …?” You build your Reality Tree with asking enough 'why's to get to the root.
3. What is the IT Organization's Capacity for Change?
If radical changes are needed, does the change management structure exist internally to deliver on that? If not, I should be looking for a partner or possible acquisition target.
- Assess IT Capacity to Change: What will change about the business over the next 5 years in order to achieve the strategic plan? And what are the impacts of those changes on IT? Higher transactional volumes? Heavier investments in product development? Does the business need to make decisions faster?
- Gather as Much Input from all the business groups and departments including adherence to industry standards, approach to human resources showing support of overall organizational growth or shrinkage (follow industry ratios), and sourcing alternatives, with an in-depth understanding about organization's capacity for change.
- Figure out The Gap between "Now" & "Future": IT managers need coaching in strategy and aligning their tactical roadmap to the business strategy. That said, two techniques to consider for align or acknowledging and fixing misalignment are the "current reality tree" and "negative branching". In essence, it is a matter of figuring out "where are we now" and "where we want to be".
4. What Could Cause Business to Fail?
Brainstorming scenarios for failure in the future helps everyone be clear about what we don't want to happen and what we can do to avoid it.
- First: You have to take into account the evolution of tech, and what/if/how it would affect your company. Some companies are more tech-forward than others, and if you're setting policy, you're going to have to set a level of comfort that you'll be okay with. Setting test parameters, roll out procedures, etc.
- Next, you must acknowledge undesirable affects of what IT is doing wrong, what IT is not doing or how the current reality is not aligned with the business strategy. Uncovering the under desired effects allows for negative branching - the cause and effect and the underlying intervening or missing actions to be addressed.
- Every manager must be capable of using the problem-technique of 'the 5 whys' to have great root-cause troubleshooting techniques for both managerial and technical matters. Five WHYs Reality Tree Scenario:
2) Why is it poor? Well, the staff performance is sub par and response is disorganized.
3) Why do we have sub-par performance from our staff? Training is inadequate.
4) a. Why is training inadequate? Priorities are always changing.
4).b Why is service response disorganized? Supervision is infrequent and not measured.
5) a. Why do we not measure performance? We don't have processes in place.
3) Why do we have sub-par performance from our staff? Training is inadequate.
4) a. Why is training inadequate? Priorities are always changing.
4).b Why is service response disorganized? Supervision is infrequent and not measured.
5) a. Why do we not measure performance? We don't have processes in place.
5. Looking at the Risks, what Should the Business Do?
- IT must have authority for solutions and action. Without this, inaction and floundering in the current state will prevail. Once the data points are collected, we must determine the time/quality/cost values that will guide us to prioritize the work effort for IT. Getting peer reviews and feedback from stakeholders will start to formulate the IT strategy.
- Linkage of Business & IT Strategy: Once the action plan is assembled, cascading or waterfall MBOs of the business strategy should directly map to IT efforts. Any action by IT without linkage to a business target needs to be re-examined. After assessing the risk, and ensuring budget, resources, etc., are in place, can also tactically plan how they will maintain pace with the corporation's progress (or even one step ahead).
There're an art and a science in crafting a strategy, "strategy" is not scary, it's not academic, and it's not overly weighty. “Less is More”, CIO’s strategy plan should be no more than 10 pages, and when the non-tech CxO reads it, he or she should say "Ah ha! So that's what IT is going to do over the short term and long term perspective!"
0 comments:
Post a Comment