2.5. Developing Your IT Strategy
Let's recap for a moment. We looked at the importance of aligning IT strategy to corporate strategy and even suggested you might be able to do one better by developing IT strategies that further the corporate strategy, taking it to the next level. Then, we looked at corporate strategy and tools you can use to unearth the strategies in your company. Sometimes they're written down and easy to find; other times you have to reverse engineer some information to figure out what the corporate strategy is. You're doing this because you want to make sure IT efforts are lined up in the same direction that the company's headed. Next, we looked at business strategies that come from changes in the external market and how these integrate into corporate strategies. At a high level, the corporation has strategies and business strategies, so too does the IT department. Finally, we looked at ways you can begin to figure out what your IT strategies might be.
At this point, you should have some ideas regarding what your IT strategies should be. However, you may still be pondering these questions. Take all the information you have and see if you're missing anything. Any big, crazy ideas you'd like to throw in the pot? Thinking big at the strategic level is good. You can always dial it back into reality later, but we tend to miss opportunities for innovation when we think too small. If Microsoft had said, "We'd like to be the operating system running on business desktop computers throughout the U.S." they would have missed the enormous opportunity to be on desktops in homes and in businesses all over the world.
After you've generated your ideas on what your IT strategy could look like, decide which ideas are truly innovative, play to your strengths and minimize (or mitigate) your weaknesses. Decide which ideas will help drive the company forward toward its strategic goals. Begin to look at these ideas in a more concrete way and discard any ideas that seem truly unreasonable or outside the realm of possibility, but do this very carefully. Sometimes innovative ideas are scrapped because initially they may not be well formulated or well articulated. While we can't always see the future clearly, pondering big,"impossible", innovative ideas can lead us to unexpected strategies that are feasible either near- or long-term. Sometimes it's just a matter of perspective.
Next, we're going to discuss several methods you can use to sort through your ideas on IT strategy. You can use all of them or just some of them. If you have a method you prefer, feel free to use it. Again, the idea is not to overwhelm you with processjust the opposite. By giving you several different methods you might use, you can pick and choose those that fit best with your business or your way of seeing things. It's not an exhaustive review of methods, just a few that are relatively user-friendly that can generate a sense of order and clarity when trying to put together your IT strategies.
One method of looking at strategy ideas (potential strategies) is to use a grid with four quadrants, each with a different risk and reward (payoff) level. This commonly used planning method provides a more tangible method of placing ideas with regard to risk and reward and you can begin sorting out which ideas are worth pursuing and which are probably not. The grid is shown in Figure 2.2
Figure 2-2. Risk-Reward Grid
Clearly, when you're assessing both the potential payoff and the potential risks, you want to aim for the "sweet spot" where you get the greatest payoff for the lowest risk. However, there are times when you might select projects with a lower payoff and less risk or a higher payoff and more risk. Things are relative and though it would be nice if all projects fell neatly into these categories, there are always judgment calls you'll have to make. If you begin by sorting your ideas into these four quadrants or sections, you should get a clearer picture of how your ideas fit together. If you're looking toward big, innovative ideas, you're usually going to have to look in the high payoff/ high risk category. Remember that innovative use of technology can create a competitive advantage, but these days it's typically not a long-term advantage. Keeping that in mind will help when evaluating risk and reward so you can choose your projects wisely. If you don't have the final authority to pick and choose strategies or project ideas, categorizing projects according to risk/reward will help decision-makers sort through ideas and will underscore your business savvy with folks who are likely to notice.
Once you've developed your short list of ideas, approaches, and directions, look at the broader market again. How will these ideas fit into what is happening now and likely to happen in the future? If you're not looking ahead, you're going to be blind-sided by something, so make sure you look into the short and long term to see what is likely to occur. If you fail to take into account what's happening in the market (which, as you recall, drives business strategies or how you run the business), you're missing a large portion of the picture. If you fail to address market issues when you present your project ideas to decision makers, you'll undermine your credibility.
When you've moved all these puzzle pieces around, you should have an excellent start on your IT department's strategic direction. How you record it is up to you, but you should write it down, save it and print it out so you can look at it every day. You may want to boil it down to a few key words or phrases so that when you glance at it on your wall, cubicle, or computer monitor you instantly remember to align everything you do to these strategies. Next, you need to build a bridge between your strategies and your day-to-day activities through developing business strategies and an operational plan.
2.5.1. Moving From Strategy To Operations
For many, it's easier to just jump in and start doing things than it is to step back and strategize first. The dot-com bubble of the late 1990's proves that point. Many companies were built on great ideas or technological possibilities, with the belief that operations would follow. Not so. Numerous online startup companies at the time approached the market with a cool website and maybe even innovative technology, but no operational plan that might have addressed supply chain management, distribution channels, or delivery methods. What investors and dot-com companies alike learned was that operations do not just naturally follow strategy (the word strategy is used loosely here because it's clear in retrospect that some of the dotcom companies lacked a coherent strategy).
In order to maximize a business's chances for success, strategy should drive operations. In order for that to happen, though, you must first do the following:
It's relatively easy to list these items and a bit more difficult to do them. Let's talk about these six key elements briefly.
18.104.22.168. Develop a Corporate IT Strategy
We've already discussed corporate strategy and corporate IT strategy at great length, so we won't reiterate that information here. In order to translate strategy into operations, you obviously have to start with a strategy. We'll assume you have one based on the material presented earlier in this chapter.
22.214.171.124. Translate Corporate and IT Strategy into Tangible Terms
Your job as IT manager is to take that corporate strategy and begin to define the details of how the strategy will be accomplished. Again, this is the translation from strategy into operationsthe where we're headed into the how we'll get there. Some companies like to define two separate stages: implementation and operations. Using this model, implementation is how you achieve strategic objectives and operations are the ongoing maintenance activities of these implementations. However, we're going to talk in relatively simple terms: strategy and operations. Someone has to develop plans as to how strategic objectives will be met. Your opportunity as the IT manager (or part of the IT team) is to look at how IT and technology can play a part in achieving strategic objectives. A good starting point is to look at each strategic objective and ask (and answer), "How can IT (or technology) support this objective? "You can also ask, "What IT current or new activities would support this strategy best?"
126.96.36.199. Implement Operations that Support IT Strategy
This might seem incredibly obvious, but it's worth stating. Once you figure out what the strategy is and you've defined ways you can accomplish those strategies, you need to ensure that work efforts actually support the strategy. It's not uncommon to find companies that have defined strategic plans and who have even taken the time to translate strategy into operational plansand then proceed to ignore them. They take on projects or perform work that doesn't align with the strategy. It's a good idea to step back from time to time to ensure your efforts are aligned with where the company is headed. Otherwise you could find yourself, your department, or your job headed out into left field all alone.
You'll also need to figure out your priorities. In an ideal world, we could manage "triorities" (translation: "Do these three things first.") but in truth, we must prioritize. Part of the trick is in knowing which criteria to use for prioritizing. Do you do so based on how closely something fits with the strategy or which will have the most impact on strategy? Do you choose based on that which is least expensive or involves the least risk or that which can be accomplished most quickly? These are decisions you'll need to make and your company may have guidelines to help you through this process. If not, sit down with your boss and say (in essence), "Here are all the things we need to do, here are the things that align best with corporate strategies. Here is what I think our priorities should be, what do you think?" Also be aware that despite your best efforts, your plans (short or long-term) could end up being tossed aside for a completely new direction or new set of priorities.
Unfortunately, change sometimes happens quickly and quietly at the top of the organization and can take a while to filter down to you. Changes that impact your planning may require you to re-think your strategies, which can be discouraging. However, if you have strategies, priorities, and plans, you're certainly better off than if you didn't. And, you're more likely to get noticed (in a good way) from top executives when you are well prepared and understand that planning, prioritizing, and flexibility are all important skills for business.
188.8.131.52. Align Resources with Prioritized Operations Efforts
Once you have your priorities figured out and agreed to, you have to align available resources with those priorities. Resources include people as well as tools, technologies, and funding. Companies are dealing with finite resources, so making sure the right resources are applied to the right projects and other efforts is important to ensure success. As we'll discuss later in this book, applying the right resources to the right tasks is an important element of IT project management, so proper resource allocation will be a theme you'll hear more about.
184.108.40.206. Define Performance Indicators that Support IT Strategies
The adage "You get what you measure" holds true here. Once you've defined what you're going to do to support corporate strategies, you need to define performance metrics that support those strategies. It's often good to get those involved with the delivery (operations) involved with defining those performance indicators because they know what is reasonable and what is not. They can also alert you to inherent problems with chosen performance indicators that you might not spot immediately.
220.127.116.11. Manage Change
The final element is managing change. Though a thorough discussion of change management is outside the scope of this book, it is important to discuss it briefly here. Change is a constant factor in any plan. Although you should avoid constantly changing or re-evaluating the strategic plan, the operational plan (also known as the tactical or business strategy) should change to address changes in the marketplace. Companies that cannot respond effectively to change are at a significant disadvantage, especially if their competitors manage change well. Revising operational plans and business strategies as market and competitive forces dictate is important. As the saying goes, "Manage change or it will manage you."There are additional elements of change management and we'll discuss some of those elements later in the book when we discuss how projects create change and how to communicate and manage that change.