Dos and Don'ts of IT Strategic Planning

CUMagazine.com
April 6, 2009 | COMMENTS

If the best-laid plans often go astray, can we expect any better of plans that try to predict our growth, competitive landscape, and technology requirements three to five years from now? Those are the ambitious goals of IT strategic plans—plans that are frequently threatened with obsolescence by technology changes and economic upheaval even before the ink dries.

While many companies have created formal IT strategies in recent years, chaotic times make it necessary to routinely take a strategic view, according to International Data Group's CIO Web site.

All IT strategic-planning primers start with the same instruction: Imagine your desired future state. With that vision, chief information officers (CIOs) can then analyze the present state, compare the two to identify gaps, and start to draw a road map for reaching the goal. Prioritize projects, analyze risk, and predict the likelihood of changes in the industry and technology—all are well-established steps in strategic planning. But that simple recipe masks some of the complexities of the process.

Here is a list of five common errors in the IT strategic-planning process, and tips on evading those land mines and creating a plan that works.

1. Don't start with the business plan. The first direction typically parceled out for writing an IT strategic plan is to start with the business plan. But that's misleading advice for two reasons.

First, those who wait for the business plan to hit their desks are starting too late. Even at organizations that do formal business-strategy planning, the CIO needs to participate in the creation of that plan rather than waiting for it. CIOs play a crucial role in counseling executive leaders about new business possibilities opened by technology. If the CIO doesn't fill the function of advanced technology scout, the competitors' CIO will, giving your competition a huge advantage.

The second problem with the "start with the business plan" mantra is that even formal business plans are often incomplete for IT purposes. Business strategies are typically written at a high level. They frequently talk about markets, sales-and-distribution channels, and growth targets, but rarely address how the company gets its work done. Business process is a place where IT can drive vital change and add enormous value.

2. Listen down as well as up. CIOs report a variety of methods for making sure that the wishes of the board and management team are reflected in both plans and execution. At one company, every IT project is sponsored by a senior vice president and business sponsor. While the senior vice presidents don't micromanage these projects, they're aware of the budget requirements and reasons for each, which keeps the company's top leadership involved in the IT group's strategic planning.

However, another equally important reminder about gathering other input also applies: Don't forget the rest of the employees. Line-of-business employees can offer honest feedback on what's working, what's failing, and what's missing. That information can feed back to make stronger prioritization decisions in the strategic-planning process.

Just as important as the actual feedback, though, is the message that inclusion sends throughout the company. Business employees get one of two messages from IT: either that IT listens or that it doesn't. Soliciting input from employees in various functions, and then using it in the planning process, communicates the former.

3. Don't sweat the details. IT strategic plans need to be written with an appropriate level of detail, which fulfills two requirements. One is that it should allow enough flexibility so that the IT group will be able to change implementation details without rewriting the strategic plan. The second is that the plan will be comprehensible to non-IT executives.

Another approach is to divide the strategic plan into two sections. One describes applications or solutions for particular business units or functions. The other section pertains to infrastructure requirements, software upgrades, and architectural detail. That further shortens and simplifies the reading for business-line folks, who can focus on the solutions section and pass over the architecture if they so choose.

4. Don't let it collect dust. The worst strategic plan, of course, is one that sits in an unopened binder on the CIO's shelf.

One firm has a formal communication process for rolling out its three-year plan: All IT employees are required to read the plan, which is posted on an intranet, and are required to take a 10-question quiz on its contents. Many business-side employees read the document too, and some go so far as to complete the quiz.

Furthermore, all IT projects are tied back to the strategic plan, and all projects of more than $250,000 are continually evaluated to ensure they're hitting designated milestones. That's where the senior vice president executive sponsorship kicks in. Top leaders receive a monthly "stoplight" report with each project assessed as red, yellow, or green depending on its progress. The color assigned to each project is the result of independent evaluation by three groups: the business-side group that requested the project, the finance group, and IT's project-management office. Those progress reports are discussed at short monthly meetings focused strictly on concerns.

5. Don't cast the plan in concrete. Plans are necessary, but plans change. Contingency planning and scenario planning are two underappreciated and necessary steps in writing an IT strategy. Contingency plans, both short- and long-term, should be worked out in advance with the business heads. One example is how to rank-order expenses, in the event that circumstances force a cut of, say, 30%. The process helps solidify business alignment and support, and can help the CIO tease out weaknesses in the budget beforehand instead of being blindsided in a downturn.

Scenario planning simply means creating plans for reacting to specific possible future events outside the company—so-called "game-changing events." One common event that nearly every company should plan on involves competitive mergers and alliances: What happens if you're the area's number one, and number two merges with number three?

It's hard to foresee every contingency in an unstable world. But by avoiding these common mistakes, building a well-balanced plan, and using it to guide the IT group's execution, CIOs will be ready to take on whatever disruptions the future brings.