In previous articles we have argued that strategies should be focused, specific and meaningful in order to live and generate value in the organization. We have defined a strategy as “a plan designed to achieve a long-term or overall objective under conditions of uncertainty” and have elaborated on the fundamental components that should be in any strategy. Additionally, we have explained that in order for an IT strategy to be successful, we have to make allowances for human nature and human behavior.
In recent articles we have touched on the importance of having a good business understanding of strategic work and looking at it as a whole. In this article we elaborate on what we mean by having a holistic approach to business, the advantages it offers as well as an example of what it means in practice.
What is a holistic business perspective?
Our definition of a holistic business perspective is an approach in which you actively respond to the business as a whole, while also focusing on the development and strategic planning of a particular sub area.
The figure below illustrates three important components of a holistic business perspective.
Internal & external situation
This the actual reality of the business, which is relevant in the specific context. It can have to do with circumstances related to the business model, the marketing position, finances, infrastructure, resources and employees. Moreover, it is often relevant in relation to external circumstances, such as new technology, new trends, a new competitive environment or new legislation.
Business aims & ambitions
These are the overall and long-term goals and ambitions of the business. This can be goal setting in regard to growth, new markets, efficiency enhancement or other changes in the business model. This usually has to do with goals with great complexity, and a long time horizon that requires strategic planning and prioritization.
Strategies, plans & projects
This includes the entire portfolio of relevant strategies, plans and projects that are found in the business at the given point in time. This could include strategies, projects and key action areas that are interrelated, that affect each other, or that draw on the same resources and budgets.
What are the advantages of a holistic business perspective in strategic planning?
There are three considerable advantages in having a holistic business perspective when drafting strategies in the IT department.
- Enhanced value generation: By ensuring that the IT strategy supports the activities and strategic objectives of a business, the strategy will simultaneously support the value creation and performance of the business. You might say that the strategy is a good business case.
- Synergistic effects: Mapping out the coherence between the strategies, plans and projects provides an opportunity to ensure that the different strategic activities support each other and pull in the same direction. If this is not possible somehow, or if there are conflicts between different strategic activities, it would be possible for management to change priorities.
- Execution: Strategies that are not implemented and used are a waste of time, money and capacity. By weighing the strategy against the organization’s other activities, resources and plans, it is possible to prioritize and thus ensure that the most important initiatives are carried out. In the end, it could mean that a strategic plan, or the execution of it, is postponed, or that the level of ambition is reduced, or that it is given up completely.
Incorporating a holistic business perspective in strategic planning
The figure below depicts how a holistic business perspective that offers valuable input to strategic work. This is just a general example and is by no means comprehensive.
“Developing a new sourcing strategy for IT is an important operation that should be prioritized.
The company is considering whether to develop a new IT sourcing strategy. With the holistic perspective shown above, we can gain insights from the following examples.
Where is it possible to improve value creation?
The sourcing strategy can support the goal to reduce costs and mitigate the problem of attracting IT staff. At the same time, the strategy can take into account expectations around buying out competitors.
Where are the synergetic effects?
The strategy for IT architecture already frames the architectural principles for the purchase of new solutions for the organization. The IT architecture strategy will thus strengthen the sourcing strategy when it sets the framework for the solutions and services to be purchased, and vice versa. The sourcing strategy boosts the execution of the IT architecture strategy, as all purchases are controlled and consolidated.
How can the execution be assured?
It is apparent that many resource-intensive activities take place in parallel, while at the same time, there is a bottleneck in the IT department. This means that attention must be directed to whether there is a need to shift priorities or make a change in existing plans in order to ensure the capacity required to establish and implement the new sourcing strategy.
Basically, the scenario described above indicates that developing a new sourcing strategy for IT is an important operation that should be prioritized. At the same time, attention must be given to the allocation of the available resources. This may seem like an ordinary conclusion, but in the real world, businesses often launch strategies or strategic projects which they do not have the resources for, or which conflict with other initiatives in progress.
We hope that this article has given you inspiration for reflection in the lead-up to your next strategic initiatives.
About the authors
Kristian Sørensen is CEO & Sr. Principal at IT ADVISORY. As a trusted management advisor and IT strategy expert, Kristian helps organizations set structure and direction for strategic initiatives and projects. Reach out to him at firstname.lastname@example.org.
Sune Dybdal is Ass. Partner at IT ADVISORY. Sune is a business-oriented digital consultant and strategic advisor. Sune is an expert at facilitation, change management and behavioral design. Reach out to him at email@example.com.