Creating and Using Effective IT Strategic Plans

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Creating and Using Effective IT Strategic Plans

Louis BoyleVice President

Gartner Executive Programs

Most Organizations Have IT StrategiesThat Look Like This

Store Systems

Daily ReportsSystem

ReplenishmentSystem

DC Order MgtSystem

DC Billing

Corp Stk File

DistributionSystem

RSU Central

A10 - Order Routing

A11 - RS Inventory &Sales Month End

Reporting

POS Sales Rpt

Perp Inventory

WarehouseBilling

RS Merch(RSMS)

Acct/Bookkeep

Stock Mnt

A12 - Model Quantity

Store File

A1 -Credit Card Apps

DealerSettlement

Sears PymtSystem

DB2 Mkt Info

Credit CardSystem

A2 - Credit Plan Mnt

A3 - Return CheckApps

Equifax, Martel,Checkfast or

Input of Texas(3rd Party)

Retail Store

Rebuy Dept

Telecom Dept

A5 - Prepaid Cellular

Customer

TPS History

A6 - BANCTEC

A9 - RS StorePerpetual Inventory

Promo Order

Multi-Mkt Price

JournalingSystem

National Parts

A13 - Srvc Cntr PhyInv & On-line Recaps

A14 - POSSales Processing

A15 - RadioShackReplenishment

Order Routing

Service CenterPOS

DATAAPPLICATIONS

A16 - Service CenterReporting

Srvc Cntr Tbls

A17 - Stock Mnt

Fran Store

Comm System

Intern’l Stores

A18 - Merch Pricing

A19 - Merch PromoPln

VSAM Stock,Store or

Control Files

A20 - RS Buyer SalesPlanning /Proj Sys

A&A Import/Export

A22 - Web StoreLocator

A23 - Service CenterWeb Locator

A26 - Answers Online

A29 - Corp Elec Msg

A30 - RS One-Each

A31, A45 - ServicePlan Price Cntrl &

Tranmt

Service Center

A33 - RS Srv PlnSrv Cntr Cust Mnt

A34- Srv PlnsAmercican Bankers

AmericanBanker Assoc

A37 - Srvc PlnDisplay

Contract Srvc

Printer

A38 - Srvc Pln CnfrmLetter

A39 - Srvc Pln Rnwl

A40 - RS Validationand DB2 Load

RSTS DSATbls

A42 - Online InquirySys

RSTS System

A46 - Srvc Pln SalesEntry

A47 EBIS ODS

A48 - Flyer Selection

Ad Circulation

Experion

Advertise/Ad Support

A50 - Customer Load

A51 - GeostoreAnalysis

A52 - Profiler Report

A53 - Name & AddrHygiene

Group 1

A57 - Cust Trk Load

A58 - Customer Mnt

A59 - LOOK!

NAILSWinLook

DB2 Load

Invent Merch

CensusBureau

A60 - EconomicCensus

A61 - Sales Reporting

A62 - Flash Sales

Python

A64 - Fran DR Entry

A4 - Store File Sys

Financial Sys

Payroll/HRMS

Real Estate

Cellular Act

A8 - Comm System

Retail Str POS

Email Server

POS Support

RMAC DR

Promo Dist

POS Invt Tran

Model/Qty

POS Rcv Invc

Merch Adj

RS Invt Sumry

Corp User

A25 Price Lookup

A27 -Srv Pln Rpt/Mnt

A28 - Store Msgs

Email Systems

A32 - New Bus SVPMail

A44 - Mkt IncremtalRpts

A49 - Hitlist

Stock File EffPricing

A24 RS.COM

InvestorRelations

CNN/fn site

Web Dev

Cust Support

Intrnet Cust

A43 - TRACE

Intrnl Audit

Loss Prev

STORE

SALES

PRODUCT

CUSTOMER

LegendFacility Party

Product Activity

ID Task Name Start Finish DurationJan 2006 Feb 2006 Mar 2006 Apr 2006 May 2006 Jun 2006 Jul 2006 Aug 2006 Sep 2006 Oct 2006 Nov 2006 Dec 2006

1/15 1/22 1/29 2/5 2/12 2/19 2/26 3/5 3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30 5/7 5/14 5/21 5/28 6/4 6/11 6/18 6/25 7/2 7/9 7/16 7/23 7/30 8/6 8/13 8/20 8/27 9/3 9/10 9/17 9/24 10/1 10/8 10/15 10/22 10/29 11/5 11/12 11/19 11/26 12/3 12/10 12/17

1 2w 1d1/30/20061/16/2006Install PMO

2 4w 4d2/16/20061/16/2006Upgrade LAN

3 6w3/30/20062/17/2006Upgrade Desktops

4 20w6/19/20061/31/2006Install ERP System

5 6w7/31/20066/20/2006Install SCM System

6 6w9/11/20068/1/2006Install CRM System

7 6w10/23/20069/12/2006Implement Customer Self-Service

8 6w7/31/20066/20/2006Implement HR System

9 2w 4d8/18/20068/1/2006Institute Employee Self Service

10 4w11/20/200610/24/2006Institute Rewards System

11 6w10/23/20069/12/2006Implement BPM System

12 3w11/13/200610/24/2006Implement other BPM System

13 2w11/27/200611/14/2006Implement BAM System

14 3w12/18/200611/28/2006Implement Enterprise DW

15 1w12/25/200612/19/2006Execute Mobility Strategy

IT Strategic

Plan

IT Operational

Plan

Or they look like this…

(Magnifying glasses are at the back

of the room)

IT Vision

Have a fully open,modern, reliableIT infrastructure

We use the most advanced technology to

meet our needs

Our IT clients say we’re perfectly aligned

We have the bestIT workforce

- it does what needsto be done

Or they can look like this……

Lofty Goal 1Lofty Goal 2

Lofty Goal 3Testimonial

Key Issues

1. What are the primary steps in establishing a good IT strategic plan?

2. What are critical questions that an IT strategic plan should answer?

3. How should organizations use IT strategic plans in their governance processes?

Key Issues




Plan Definitions: Strategic or Tactical

• Strategic - A plan or technique for achieving some

end; distinguished from tactical, short term• Longer-term (> 1 year) objectives and goals• Significant impact on the business

• Tactical / Operational- Adroit maneuvering to gain an objective• Short-term (<1 year) activities and operations

• Plan- Method for the attainment of objectives

• Planning- Ongoing process to develop the method

for attainment of objectives“I don’t believe in plans, but planning is invaluable”

The Perception of IT Value

Innovation

Evolutionary

Transformational

Status quo

Cost Center Modernization

Aggressiveness of change

agenda

Acceptance of IT as an enabler of change

Focus on reducing IT costs

Department-based

change and IT focus

Customer-driven

enterprise change

Improve Efficiency marginally

Deploying bleeding

edge commercial technology

Use IT to speed up existing

processes

Deploying mature

commercial applications

Finance-driven

enterprise

Consolidation

Enlightened Enlightened ManagementManagement

Administrative Process Map: IT Governance Aligns these Processes

Political Agenda

Service Delivery

Project Management

IT Strategic Plan

Human Resources Acquisition

Strategic Sourcing

Budget

Corporate Performance Management

Desires

Decisions

Tactical Execution

Investment Prioritization

Business Strategic PlanBusiness Case Inputs• Organizational Capacity• Cost• Time• Risk• Procurement• Portfolio Performance

Cross-Agency Budget Cutting

Strategic Plan Development: Road Map

Develop Target Develop Target Architecture Architecture

PlanPlan

Develop Target Develop Target Service Service

Delivery ModelDelivery Model

TechnologyTechnologyTrendsTrends

SolutionsStrategy

(Business View)

DeliveryStrategy(IT View)

BusinessStrategy

Summarize Summarize Strategic Strategic Business Business DirectionDirection

Develop IT Develop IT DirectionDirection

Develop Develop Management & Management &

Governance Governance ProcessesProcesses

Conduct IT Conduct IT Assessment Assessment

and Gap and Gap AnalysisAnalysis

Develop Migration

Approach & Road Map

Use a Self-Assessment: How Do You Rate?

SCOREA1. Business strategy - Clearly defined business strategy _____A2. IT strategy - Strategy clear to all and contribution recognized _____B1. Business applications - Major systems support the business strategy explicitly _____B2. Personal productivity - Right tools are in place to get the job done _____B3. Information management - Timely information is available and of the right quality _____C1. Service management - Internal IT processes conform to quality framework; e.g., ITIL _____C2. Technology environment - Reliable and cost-effective IT service delivery _____C3. Asset management - Resources are well managed _____D1. Architecture framework - Well-defined and stable architectural plan _____D2. Progress achieved - Getting progressively closer to desired architecture each year _____E1. Human resources - Right skills and teams in place _____E2. Organization - Structure best to deliver IT services _____E3. Client relationships - Strong relationships exist with our clients _____F1. IT governance - Clarity about who makes decisions _____F2. Performance metrics - Scorecards highlight critical success factors _____F3. Budgets - Quality of budget processes and charges for services _____

This is an informal assessment. For each area, rate these factors, where 1 means you havenot started or have a largely ad hoc approach and 5 means you have reached leading practice.

Source: "How to Run an IT Strategy Self-Assessment Workshop" (G00129417)

Consider a Workshop Approach – Deliverables-driven Teach, Coach & Critique

• Create a game plan:- Gain a common understanding of what needs to be done

to create your information technology plan- Plan outline- Level of detail

• Prioritize and scope plan activities based on deliverables

• Develop plan via workshops-based, facilitated approach- Teach, coach & critique

• Assign ownership and establish timetables

Creating the Future State:Use a Common Requirements Vision• Audience: Senior management

• Scope: Environmental trends, enterprise business strategies, business change requirements, business information requirements, information technology requirements, solution requirements

• Matrix: Relationship between environmental trends, enterprise business strategies,business change requirements, business information requirements, information technology requirements, solution requirements

• Goals

- Obtain senior executive sign-off on requirements via governance process

- Gain support of architecture process

20 Pages20 Pages

What Is A “Common Requirements Vision”

• A process for discussing, capturing and documenting: - Set of enterprise

business strategies- Set of common strategic

requirements derived from ENTERPRISE business strategies

- Position on the impact of environmental trends to the enterprise

• The resulting document

CRV HierarchyEnvironmental

Trends

EnterpriseBusinessStrategies

BusinessChange

Requirements

BusinessInformation

Requirements

InformationTechnology

Requirements

BusinessSolutions

Requirements

ESAETAEIAEBA

The CRV document is an articulation of what will drive the enterprise's future state

Why Does the CRV Help With the Problem?• Identify, discuss and

document strategies- Question the meaning and

implications of each- Analyze the compatibility- Highlight the inconsistencies- Clarify the confusion

• Go deeper than the strategies

• Articulate what is NEEDED!

Create a common forum of discussion on matters of strategic alignment

Intended Outcomes1. Business and IT leadership

collaborate on business and IT planning

2. IT is planned and executed holistically, end-to-end, to support business needs and application changes

3. Infrastructure and application life cycles are tightly linked with business process life cycles

4. We save time and money and reduce risk through repeatable, reusable solutions that are developed and applied to similar problems

5. Business value takes precedence over product centricity

Business Solution RequirementsEBS 1: Due to longer sales cycles and smaller contract amounts, increase market penetration by increasing product proposals to qualified prospects by 35%, growing from 1,000 to 1,350 per month by mid-2004

BCR 1: Reduce “opportunity to proposal” conversion time by 60%, from 10 to 4 business days BCR 3: Implement lead and opportunity management processBCR 8: Automate sales proposal generation capability, including appropriate approvals and workflow to reduce opportunity-to-proposal conversion time

BIR 1: Sales/sales administration requires details of product/offering information in real timeBIR 3: Marketing, channel partners, and sales require knowledge of customers, prospects, proposals, leads, marketing programs and campaigns, value generated for customers (customer satisfaction), support delivery metrics on demandBIR 10: Sales/marketing/product planning must have detailed knowledge of all successful consulting engagements to evaluate as standard products upon completion from consulting team

BSR 1: Implement an integrated prospect lead management, forecasting/customer repository solution BSR 6: Implement a coordinated, enterprisewide proposal factory to be utilized by product planning, customer fulfillment, sales,

development, and consulting

ITR 2: Provide access and support for operational systems 24x7ITR 4: Provide real-time access to operational information sources from offices, customer locations, and while travelingITR 5: Provide a real-time accessible integrated view of customer and product information and consulting engagements ITR 7: Provide a mechanism for sharing documents in a collaborative environment across the enterpriseITR 8: Provide cross-enterprise workflow management capabilities

Going From CRV to Future State

Transformation steps:• CRV-level requirements suggest potential initiatives to be

considered for project portfolio

• CRV-level requirements are NOT current project-level requirements, but they should be compared to current and planned projects to incorporate/accommodate future needs in current implementations

• CRV should be revisited periodically (as new strategic plans are developed) and when major environmental trends or business factors indicate significant change (such as a merger/acquisition)

• Maintain linkages among trends, strategies and requirements

• Use CRV to help give future context to all planning activities

Create the Migratory Road Map

Most Strategic IT Plans Have 3-to-5

Year Planning Horizons

Rather than havea laundry list of

initiatives, make sure you demonstrate how

the plan will be implemented over time.

This will indicate priorities, synergies

and set proper expectations

(especially support for priority business-side needs)

IT Program 2006/07 2007/08 2008/09 2009/10

IT Cost IT Cost SavingSaving

ProjectsProjects

Customer Customer Service Service Facing Facing

ProjectsProjects

LOBLOBService Service Improv.Improv.ProjectsProjects

IT Investments

Key Issues




Core Ingredients of IT Strategy

• Direct Link Between Business and IT Strategy

• Sound IT Governance• Definition of the IT

Environment• Major Initiatives• People/Resources• Risks• Measures of Success

Business Strategy Application

Strategy Infrastructure

Strategy Architecture People/Sourcing Financial

Core Building Blocks

Essential Ingredientsto Address the Building Blocks of IT Strategies

Source: "A Primer for Strategic IT Plans" (G00144281)

Strategic Plans: Seven Key Questions1. Does the IT strategy substantiate mutually owned

expectations developed by all stakeholders?

2. Are critical drivers influencing the direction of the IT strategy accounted for?

3. Is the IT investment direction and alignment with business/mission needs and priorities made explicitly clear?

4. Is the IT strategic plan client-centric?

5. Does the IT plan contain performance measures that can gauge progress and success?

6. Does the plan outline the governance process to executethe strategic planning process and approved IT investment decisions?

7. Does it market the business value of IT effectively?

Source: "Key Questions That Government IT Strategic Plans Should Address" (G00144046)

Learn

Strategy as a Continuous Process

PlanBuildExecute

ExecuteProcessesMetrics

Innovate and adaptFaster cycle timesBetter results

OfferingsChannelsCommunicationPoliciesTechnologies

BuildBuild

ProcessesResourcesBU/IT

VisionScenariosStrategies

ChallengesOpportunitiesBest practices

Analyze/synthesize

External:PoliticalBudgetClientsPartnersTechnologies

Internal:ResourcesProcessesStaffingManagement

Scan and sense

Key Issues




Sample Measurement Areas by Profile

Efficiency Profile Process Profile Transformation Profile• Total cost of ownership• Standards/economies of scale• IT core processes (ITIL,

COBIT, CMM-I, etc.)• Benchmarking, TCO• Process automation• Performance-based human

capital practices

• Program/project impact• Relationship management• Optimized sourcing• Resource management• Business process expertise• Service-based

chargeback/pricing• Performance contracts (SLAs)• Competitive assessments• IT architecture

• Governance• IT portfolio management• Innovation delivery• Business/financial

management (ROI)• High-performance workplace

Alignment/Vision

Cost

Responsiveness

Relationship

Focus of IT Doer Service Provider Counselor Value Seeker

Goals, Objectives, Strategiesand Measures*

Objective 1.1 Provide the infrastructure needed to supportservice delivery

Strategies:• Build and maintain Michigan's infrastructure• Implement an asset management process statewide.• Bridge the digital divide• Improve ease of use

Objective 1.2 Provide reliable, responsible stewardship of data,information, and increase the number of onlineservices

Strategies:• Continue to expand Michigan.gov by adding services• Protect data and citizen privacy through a

comprehensive security strategy• Deliver business continuity and disaster recovery plans

*A CRV derivative

Goals, Programs and Target Measures

Goal

Objective

Activities

Desired Results and Measures

IT Scorecards Linked to Strategic Plans Can Assist in Governance

StrategicContribution

Effective Alignment

Management of IT Investments

Business & PublicValue of IT

CustomerSatisfaction

Service-LevelPerformance

Business/ITPartnership

Application Delivery Performance

Process Excellence

Responsiveness

Internal Cost ofQuality Measures

InformationAssurance

Asset Retirement and Disposition

BusinessContribution

Service CapabilityImprovement

Staff Capability& Effectiveness

Business Architecture Evolution

Emerging Technologies Research

Knowledge Management

CustomerOrientation

InnovationImprovement

OperationalExcellence

Visionand

Strategy

Inte

rnal

E

xter

nal

IT

IT Performance Overview

Business Value

Customer Satisfaction

IT Operations

IT Organization Performance

Major program/project performance

• Performance against budget

• Benchmarks

• System/application reliability

• IT contribution to performance goals/outcomes

• Value contributions in time/quality/cost impact

• Help desk performance

• Problem resolution cycle times

• Choice of vendor satisfaction

•SLA performance

•Business risk reduction

•Security/EA assessments

• Quarterly/annual assessment surveys

• Benchmarks and trends

• Cost/ schedule and benefit realization performance (variances)

• Contribution to PMA, PART, High Risk List reduction, etc. assessments

What IT Governance Is:Collective decisions and guidance about:

How IT should be used in the business (policies, principles)

Who makes What decisions How (clear accountabilities)

Business cases and investments (priorities, ownership and benefits realization)

What IT Governance Is Not:

Internal IT operations IT people management IT contract management Internal IT organization Project management System testing Audits Procurement of hardware Facilities management Documentation and training Client satisfaction Benchmarking Capacity planning Resource management

IT Governance ≠ IT Management They Are Not the Same

IT Performance Scorecards Can Report on Progress

StrategicContribution

Effective Alignment

Management of IT Investments

Business & PublicValue of IT

CustomerSatisfaction

Service-LevelPerformance

Business/ITPartnership

Application Delivery Performance

Process Excellence

Responsiveness

Internal Cost ofQuality Measures

InformationAssurance

Asset Retirement and Disposition

BusinessContribution

Service CapabilityImprovement

Staff Capability& Effectiveness

Business Architecture Evolution

Emerging Technologies Research

Knowledge Management

CustomerOrientation

InnovationImprovement

OperationalExcellence

Visionand

Strategy

Inte

rnal

E

xter

nal

IT

IT Strategy for Your Organization

• Apply this to your context• Quick self-assessment• Develop your game plan

- Approach- Scope (especially what’s NOT in it), TOC- Major milestones- Deliverables based, outcomes oriented- Make it an active, working tool

Recommendations Follow a process in creating your strategic

IT plan; it is not about producing a document.

Strategic IT planning is not self-directedor self-implementing – use EA for planningand portfolio management to implement.

Make sure your completed process can answer the six basic questions.

Use your strategic plan by populating it with performance measures to demonstrate progress, success, and areas for change.

Having planned the work, work the plan (NO SHELF DOCUMENT!)



Creating and Using Effective IT Strategic Plans

Louis BoyleVice President

Gartner Executive Programs

Documents

Creating and Using Effective IT Strategic Plans