IT Strategy Process
– Choose the right starting point
“What is the best approach to creating an IT strategy?” This is a question that I have been asked many times – along with a “What is your best practice strategy template?”. The reality is, however, not that it is not that simple – and there is no specific and final answer.
In this blog post I will share some of my perspectives regarding IT strategy.
Firstly, it is important to acknowledge, that there is both art and science in strategy development. I absolutely love the creative part, where the design of the strategy process is shaped by the many factors that make each organisation unique.
The fill-in-the-blanks template-based strategies does not work and neither does pure academic approaches.
Secondly, the success of IT strategy development is – in my experience – determined by the fit between the:
- IT strategy process
– which must be tailored to the situation and organisation - The needs/capabilities of the organization
– including adequate degree of involvement - Implementation and follow-up
– including ability to iterate the strategy and defining metrics for success
THE IT STRATEGY PROCESS IS COMPLEX
Searching the internet you will find numerous articles, which outlines “five simple steps” to developing an IT strategy. Although the headlines academically may be “not wrong”, they cannot be executed without scoping, design of the (often complex) analysis processes and first and foremost gaining a clear understanding of the objectives of the IT strategy process. I honestly do not understand why major websites such as CIO.com are lend name to this kind of articles.
Anyways, when looking towards the major consulting organisations, like Deloitte, Boston, PA etc. they all have excellent strategy consultants, but even these companies are not publicly sharing how they are working. I think it is partly because of proprietary processes, but mostly because it is a very difficult topic to write anything decisive about. It is much easier to put the IT strategy processes into broad high-level perspective that sounds great in a business context.
However, there are a number of things you can do in order to increase your chances of success.
STARTING POINTS FOR DESIGNING AN IT STRATEGY PROCESS
In this blog post I will share the initial approach for how to scope what kind of IT strategy we are dealing with in a specific company and context – and subsequently how to address the IT strategy process.
IT strategy comes in many shapes and sizes. In order to get started correctly it is important to frame a good starting point.
Reflect upon what you want to achieve with the strategy – why are you looking to develop an IT strategy? Consider which of the following options fits your situation the best.
The six high-level starting points for IT strategy work
There are six high-level starting points for IT strategy work:
- Create a common direction, frames and identity (internally as well as towards the business)
- Enable business growth
- Prepare for innovation, digitation and technology experimentation
- Optimize/adjust cost and delivery
- Perform a focused improvement or solve problem
- Choose the right technologies and partners
The above starting points are vastly different, and even though the wording may vary, it is my experience that strategy processes can be fit into these six boxes. However, it is relevant to note, that one given strategy process, may involve more than one aim.
(If you have a special situation, that is not covered by the categories below, I would love to hear from you!).
“There is no best practice it strategy template!
EXAMPLE IT STRATEGY PROCESS (TYPE 1)
In the remainder of this blog post I elaborate on some of the main points to consider when creating an IT strategy process which aims to create common direction, frames and identity (type 1 cf. the above list).
Triggers may include:
- Changes in business, organisation, staffing, customers, technology
- Pains e.g. regarding collaboration (internally or towards the business)
- Unclear governance and areas of responsibility (internally or towards the business)
- Lack of updated strategy
Strategic drivers to clarify and analyse in the process:
- Business strategy
- Financials (possibilities/restrictions)
- Flexibility (needs in business and IT)
- Competences (limitations, opportunities, challenges)
- Security (measures, needs and trends)
- Technology (opportunities, trends, already made decisions (frames))
- Market (changes, trends, effect on business, effect on IT)
- Legal (compliance, gaps, changes in legislation, trends)
Aims of the strategy process:
- Frame the identity and “DNA” of IT
- Define the governance, overlaps and collaborations points with the business
- Analyse and establish common knowledge of current state
- Define the future state of IT – and how to get there
Involvement:
- Involvement in the process varies a lot depending on organisational culture. As a minimum IT management and key business stakeholders. The less strategy involvement, the more implementation and iterations afterwards.
- Involvement may include external parties such as key suppliers or customers.
IT strategy process
The process varies as much as there are different organisations and different leaders. However, the headlines flow somewhat follows the plan below.
STEP 0: CLARIFY VALUE AND OBJECTIVES
Clarify value to be generated from the IT strategy process and break down scope, aims, involvement and desired outcomes.
Although this is just one line, it is important for the success of the strategy to be quite concrete regarding this, e.g. supported by defining metrics for success.
STEP 1: ASSESS THE SITUATION
High-level analysis and input for IT strategy process design. Typically through workshop(s) with management and key stakeholders.
STEP 2: PERFORM ADEQUATE ANALYSIS
You can analyse forever, the key is to analyse a relevant and adequate extend.
Typically this involves analysis of current plans and strategies, budgets, current project portfolio, and numerous interviews with e.g. business management, it management, key stakeholders in business and IT (and sometimes even key stakeholders from outside the organisation).
Also the existing key principles and operating model must be uncovered.
STEP 3: ENSURE COMMON UNDERSTANDING
This situation often occurs: Everyone involved thinks all have the same picture of the situation – but the reality is that this is rarely the case.
A colleague of mine used to say: “There is nothing like data, that can kill a good discussion”.
The analysis is the data.
The results are to be documented in a concise manner that can be communicated and read independently. Furthermore, the strategy process must ensure that the analysis results are used to secure a common understanding/picture across all relevant stakeholders that participate in the process.
I have often encountered that various stakeholders has vastly different pictures and ideas of the given state of things. In other words: When the observations/interpretation of symptoms is different, so is the possible diagnosis and it is impossible to gain fellowship about the planed treatment.
Typically the analysis for this kind of IT strategy output can be summed up in the following headlines:
- Description of current state
- Pains
- Needs
- Opportunities
- Strategic drivers
STEP 4: SEEK CHALLENGE AND INSPIRATION
Based on the current state it is often well worth it to be shaken up and getting some outside inspiration.
Be disturbed and challenged in your thinking and perception!
This can e.g. be through a session with companies which overlap on processes or technology. Or where business complement, but do not compete. E.g. retail in fashion does not collide with retail banking, but mutual inspiration is certainly a possibility. Or getting inspiration on creating breathing ground for innovation across cultures by masters of mediation. Or learn about latest research at a university… and much more.
The possibilities for inspiration are endless, but remember – it is not mandatory.
STEP 5: FRAMES AND DIRECTION
Where we are going must be aligned with how we are getting there – and vice versa.
It varies a lot from organisation to organisation, how to approach this. It depends upon the given situation and it is always an interactive process to find the right match.
However, an approach could look like this:
(A) Clarify current frames and guiding policies of the organisation (the important and relevant ones only of course)
(B) Determine the future desired state (you may call it the vision). Some like this to be very high-reaching and ambitious. I vote for ambitious but definitely realisable. If the future state is not rooted in reality, there is a very high risk that the strategy will look good on paper, but will contain fluff and be difficult to implement.
A sanity check can be to develop OKRs for the future state. OKR = Objectives and Key Results. The system is implemented as a management system in Google and is recently elaborated in the book Measure What Matters by John Doerr. To gain a quick overview see this blog post or watch Doerr’s TED Talk (10 min).
(C) Develop guiding policies for reaching the desired state. Basically that is framing the execution and direction, so that it is clear (at a high level) what is within the boundaries of the strategy and how do we approach it — especially how we utilize expertise, technology, innovation, organisation, geography etc. to “win” by playing according to the strategy.
This sounds simple but it often takes several iterations to get right.
When done right, the guiding policies “become” the strategy; i.e. they will be the reference points from the entire organisation working commonly towards the future state.
(D) Develop themes/tracks to reach future desired state.
Here we are getting closer to execution. Which areas need work in order to lead us to the future state. Does the guiding principles support the themes? There need not be an 1:1 overlap or complete coverage. But the direction and execution of all themes must be supported by at least one guiding policy.
A further step is to ensure the strategic drivers, pains, needs etc. should to a wide extend – for the prioritized areas – are covered by the themes.
(E) Create goals for each theme.
Verify they correlate with the overall desired future state; and consider making OKR(s) for each theme to test that it all makes sense.
STEP 6: ROADMAP, BUDGET AND METRICS
The steps above yields the playing field of the strategy – and now comes the easier part: Develop a high-level roadmap, and identify and prioritize coherent actions/projects that will lead towards the future states within each theme.
Ensure transparency regarding budget, and design clear metrics for success and as a basis for follow-up pr. theme.
It may be relevant to add more details to the immediate projects – but at this state, that should be straight forward.
STEP 7: FINALIZE DOCUMENTATION AND VISUALS
Although documentation is an integral of the above steps, the last part of the process typically includes preparation of the IT strategy pitch to business and organisation. This may include compiling slides covering key parts of the strategy, and – if at all possible – a one-pager highlighting the strategy.
If the strategy cannot fit into one or two visual pages, there you need some rework.
STEP 8: IMPLEMENTATION AND FOLLOW-UP
From the entire history of both computing and management consulting, one thing is clear: Implementation (or lack thereof) can kill even the best strategies, initiatives or technologies.
Design a dedicated process for implementation of this specific IT strategy, including:
- Process for follow-up both high-level and within the organisation
- Governance that cover how to incorporate the adjustments to the strategy, that may become obvious when implementation starts. (Note: Is the guiding policies spot-on, strong and relevant, then they tend to stay fixed over time although the other content may change)
For strategy implementation to succeed, managers must be able to buy-in on the strategy, and clearly communicate the guiding principles, goals and “local impact” to the employees. I.e. what’s in it for me? for us? and why does it matter what I do?
I find that implementation plans gain the highest degree of success if they become quite concrete and that managers take their responsibility for implementation to the top of their agenda. I recommend assisting managers in understanding the strategy in-depth, give them adequate sparring by e.g. making OKRs and concrete plans for the themes that affect their departments.
PERSPECTIVE
The above process outlines an example of 8 steps for the “Type 1” IT strategy – namely the “Common frames, direction and identity”. But as mentioned, it is really an iterative process and no two organisations are the same – and thus the process always varies.
I will share perspectives on how to approach the process of the other types of IT strategies in later blog posts.
