Wednesday, May 1, 2013

How to Weave IT into Corporate Strategy

IT "strategy" should be an integral component of business strategy.

Most companies have no effective strategy. That is mostly because organizations lack focus and clarity on what they do. Rare business is ready to cognize itself and achieve self-consciousness (develop a strategy), and perhaps its leaders are also a lack of self-reflection upon who they really are. Thus,  this is not because of business - this is because of human nature. In order to reach higher business maturity, how to craft a good corporate strategy and how to weave IT into a business strategy to deliver high performing result?

1. Craft a Good Business Strategy 

The strategy defines the desired objective and communicates what will be done, by whom, how, for whom, and why the output is valuable. Of course, IT should be a part of the strategic planning process, so that the organization can take advantage of trends in IT that would accelerate the strategic advantage of the firm.

  • Effective strategies may come in all shapes and sizes. For some organizations, the entire strategy may simply be a high-level roadmap with key initiatives and target dates. In others, it can be a book that addresses every imaginable avenue. Importantly, execution is part of the strategy, in order to effectively execute strategic initiatives; three major things must be managed; content/context, resources, and process. In large organizations, these three things fit in enterprise architecture, program management, and organization design functions respectively 
  • The strategy is never just high level: Implementation details are the next few levels into the process. Strategy hologram - enough structure to see what it is all about, but leaving the details to the people that are on the ground implementing the business initiatives derived from the strategy efforts. Strategy frames the boundaries of action, and allows a specific set of actions to ensure effectively performing the defined strategy - this should be part and parcel of the strategy process.     
  • Strategy, and its agent, enterprise architecture, are building a sprinkler system; a systemic process for operating in a consistent, defined operation in line with executive intent. Business leaders define the operational box that the company works within - the strategy. They define WHAT initiatives they are willing to fund to get there. WHAT <--> HOW transition is simplistic, but extremely powerful abstraction, key to many things;
    requirements <--> implementation
    Strategy <--> Execution
    Architecture <--> Design
    Enterprise Architecture <--> IT "architectures" (design)
    Executive Management <--> line management
    Building Architect <--> Engineers  
  • Strategy to Execution: The organization's strategic plan should be closely integrated with its execution plan so that the strategy doesn't just sit on the shelf collecting dust until next year's plan.The execution plan includes detailed metrics, dashboards, links to the budget, a competency gap analysis and intervention plan, communication, and reinforcement plan, and individual action plans that tie each employee's annual actions in alignment with the organization's strategic plan. 

2. What’re Missing in Strategy 

The lack of Information strategy may come from lack of a corporate strategy to work from, resulting in best guesses for IT delivered work, or substituting attempts to solicit requirements from the functional business areas, and translating that into IT efforts in a vacuum, a process fraught with peril. 

  • Lack of “strategic bone” in a number of IT organizations is because:
1) In many companies, the IT leadership is promoted for very tactical skill sets
      2) Many IT organizations are entire order-takers
      3) Many organizations don’t have a business strategy either.
      4) Many IT organizations overly emphasize the alignment angle on IT strategy.
   5) Many organizations do not allow their IT departments to work on strategies
6)  Many people in IT leadership avoid having a strategy because they feel that it is a constraint
7)  Many organizations have tried creating a formal strategy, it fails for the reason above or very frequently because the they don't have the ability to understand when their actions are in accordance with the strategy or not. 

  • The whole process of creating an IT strategy, independent of the corporate strategy process, exacerbates the need to perform the business IT alignment. Most companies may have a strategy' on paper, but in all likelihood don't even look at it. It's an even bigger challenge today because companies are still trying to 'feel their way' through these economically stressful weeks/months - possibly years and any kind of strategic business thinking seems to be taking a back seat to simply keeping things together. You always have to have the business strategy that will include the mission/vision/values as well as objectives and strategies to achieve them. Once that is developed, THEN you can develop an IT strategy that supports it.  
  • Having an information-based strategy requires people to think really ahead. How you design something will make a huge difference in the future when you start wanting reports and stats or flexibility. Many executives are either not interested in that process or annoyed by the questions and digging needed to get to what they are trying to accomplish. Never mind an information strategy (not exactly sure what information that would be...), particularly since modern companies have little to no regard for institutional knowledge. 
  • Many companies miss the strategy for how they use technology to manage the business of the business vs. just managing the business. Is the business model scaling the right way to achieve the strategic objectives? Are there things that can be done to direct more cash towards development activity, besides just re-allocating budgets and cutting headcount? Most companies are lacking a holistic strategy for how they use technology to drive their business, and it's the information management strategy that most often goes unmanaged. 

3. How to Weave IT into Corporate Strategy 

With information & technology interwoven into business strategy, IT will re-integrate into the business, becoming one of the functional organizations, delivering business initiatives derived from corporate strategy, as one of the many functional organizations in the business, not an island unto itself. Such effort will just be one that is appropriate to the organizational maturity and culture. 

  • IT "strategy" should be an integral component of business strategy: Vision statements have longevity; Missions are more temporal: technical, tangible, measurable statements and a functional strategy is organization's specific implementation of corporate strategy as well, not a self-serving, empire building set of "cool things to do". If any organization develops strategy at the function level independent of direct and specific dependencies on corporate strategy, they are doing a disservice to the company. And if these implementation strategies are not coordinated across these functional organizations, then EA has failed its primary function. 
  • Information Strategy must be updated from time to time based on the current business requirements. Or if any advanced technology is driving the business, then it happens on the other way round. IT is driving the business, depends on the industry, as well as a benchmark in the similar industry. A good strategy will 1) know WHAT to do 2) know WHEN they were done and 3) know WHAT constitutes success, which, ideally, coincides with done. Kennedy's moon mission statement is the benchmark; they knew what had to be done, by when, and what constituted success.  
  • The strategy frames effective constraints which are not only a facilitator but a requirement to value-driven innovation. Having constraints provides guidelines for creativity by providing anchors to explore from. It also frees you up from having to do a lot of base research on topics that don't add a lot of values but are necessary to move forward. If creativity is essential and how does one encourage creativity in IT services organizations. To be creative, one needs to understand and challenge the routine. And any new thought needs to be further challenged. All hard works (not the manual kind), require the application of mind and body.  An effective information strategy could open up opportunities to address the very possibility. 
  • CIOs can provide extensive value to corporate strategy, transcending their IT-as-a-business role, and having a seat at the big table. CIOs need to become less technically focused (but not less technically literate), and far, far more business focused and business literate. And not just knowledge of a particular company, but knowledge in business concepts in general. CIOs have a unique opportunity; as IT is the one organization that touches every initiative, every functional organization, every business unit. By becoming integral to coordinating these initiatives inside and OUTSIDE of IT. A strategic CIO can lead his/her organization to become a competitive differentiator. 
Overall, when IT is woven into corporate strategy, it can create strategic value for the company such as reduce the amount of time it takes to innovate new product; improve the product transformation process - make it faster, better, cheaper; improve the ways services are delivered to end customers; improve information management practices,  and a set of derived business initiatives (as well as metrics - typically balanced scorecard) needs to be determined in order to measure performance result.


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