Strategic IT Planning and Governance

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Strategic IT Planning and Governance

Info-Tech’s Step-By-Step Consulting Methodology


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Copyright © 2004 by Info-Tech Research Group

All rights reserved.

No part of this book may be produced or transmitted in any form by any means – graphic, electronic, or mechanical – without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review.

Printed in Canada

First edition: January 2004

Cataloguing in Publication DataInfo-Tech Research Group, 2004-


ISBN 0-9734751-0-2

To order please contact:

Info-Tech Research [email protected]

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Strategic IT Planning and GovernanceInfo-Tech’s Step-By-Step Consulting MethodologyIn the modern organization, Information Technology (IT) plays an increasingly important role in enabling all business processes. IT has become everybody’s business and the proper management of IT across the enterprise can substantially boost competitiveness. This step-by-step methodology will help you create the mechanisms for making IT decisions at the strategic level.

Here are some examples of the kinds of questions that this methodology will help you answer:

• How Do You Prioritize Big IT Projects? Large IT projects that impact the whole organization can be very expensive. Not only do organizations have to decide whether or not to green-light an expensive project, sometimes they have to choose between several big ticket projects all vying for the same scarce resources. This methodology provides a framework for these decisions.

• What Should Be Outsourced? Often outsourcing is seen too narrowly as an internal cost-cutting device, but outsourcing should enhance, rather than diminish, the effectiveness of enterprise information technology. Making outsourcing decisions in a strategic context will lead to smarter and more effi cient IT.

• What Are Your Organizational IT Standards? With most or all of your departments using IT for competitive advantage, platform standards cannot simply be a case of what’s good for the IT department. Standards and procedures should be approved through an organizational governance process.

Info-Tech Research Group believes the top IT manager in the organization (whether he or she is a Chief Information Offi cer, Information Systems Manager, or Information Technology Manager) should play a lead role in the development of a plan for the strategic use of Information Technology.

This guide is written from an IT management point of view. In eight concise stages, we show how IT managers can launch and manage a strategic IT process within their organizations. We also provide dozens of ready-to-use tools and templates to help you build this capability.


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Contact Information

Should you encounter any diffi culties with this guide, or with the accompanying CD-ROM, please feel free to contact us at:

Info-Tech Research Group602 Queens AvenueLondon, ONN6B 1Y8

Tel: 519-432-3550Fax: 519-432-2506Toll-Free: 888-670-8889

Or visit us online a www.infotech.com

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Table Of Contents

Introduction..........................................................................................................9

Aligning IT With Business Goals..............................................................14

Scope, Competencies, Governance........................................................15

The Importance of Governance...............................................................16

The Agility Paradox..................................................................................17

How This Methodology Works: ................................................................19

Stage 1> Plan the Plan .....................................................................................21

Step 1: Set Strategic Planning Goals. .....................................................22

Step 2: Establish a Planning Group.........................................................25

Step 3: Hold a Kick-off Meeting ...............................................................27

Step 4: Create a Preliminary Report........................................................28

Stage Summary.......................................................................................30

Background > Making the Case for Strategic IT Planning.............................31

The Most Important Constituent: Senior Management ............................32

The Importance of Communication..........................................................33

More Notes on Agility...............................................................................35

Co-opting the Power User .......................................................................36

Stage 2> Document Your Business Strategy..................................................39

Step 1: Describe the Company and Its Background................................42

Step 2: Conduct an Industry Analysis......................................................43

Step 3: Document Vision, Mission, and Core Values ..............................44

Step 4: Defi ne Core Business and Its Boundaries ..................................45

Step 5: Create a Financial Picture ...........................................................46

Step 6: List Strategic Objectives..............................................................47

Stage Summary.......................................................................................48

Background > Analyzing Business Strategy..................................................49

A Company’s Value Chain .......................................................................49

The Supply Chain ....................................................................................51


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Industry Lifecycles ...................................................................................52

Porter’s Five Forces Model......................................................................54

Environmental Analysis (PEST)...............................................................55

Identify Your Organization’s Core Competencies ....................................55

Key Success Factors ...............................................................................57

Stage 3> Assess the Current IT Situation .......................................................59

Step 1: Document Your IT Organizational Infrastructure .........................62

Step 2: Document Your Hardware and Software Infrastructure...............63

Step 3: Audit Current IT Projects .............................................................64

Step 4: Understand the IT Environment ..................................................66

Stage Summary.......................................................................................68

Background > Mapping IT Assets..................................................................69

Thoughts on Staffi ng Needs ....................................................................69

Skills Development ..................................................................................70

Business Benefi ts of Asset Management ................................................70

Rolling Out an Asset Management Initiative............................................71

Conducting a Hardware Asset Inventory .................................................73

Conducting a Software Asset Inventory...................................................75

Change Management ..............................................................................76

Asset Management Best Practices..........................................................78

Understanding the IT Environment ..........................................................79

Stage 4: Propose a New IT Situation ...............................................................81

Step 1: Analyze IT Strengths and Weaknesses ......................................83

Step 2: Brainstorm Technology Opportunities .........................................86

Step 3: Document Your Results...............................................................88

Stage Summary.......................................................................................90

Background > The Art of Brainstorming.........................................................91

Brainstorm of One (Brainwriting) .............................................................92

Stage 5: Perform a Gap Analysis .....................................................................93

Step 1: Analyze Alignment Gaps. ............................................................95

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Step 2: Analyze Infrastructure Gaps........................................................96

Step 3: Summarize and Resolve Gaps....................................................97

Stage Summary.......................................................................................98

Stage 6: Propose a Strategic Vision and Governance Model .......................99

Step 1: Hold a Vision Meeting With Stakeholders .................................101

Step 2: Establish a Strategic IT Vision...................................................102

Step 3: Propose a Governance Structure..............................................103

Stage Summary.....................................................................................104

Background > One Vision for All..................................................................105

Reigning In Rogue IT.............................................................................106

Building Your Steering Committee.........................................................109

Stage 7: Build a Strategic Decision Making Framework ............................. 111

Step 1: Set Strategic Goals and Measures ........................................... 113

Step 2: Perform a Budget Analysis........................................................ 116

Step 3: Identify Your Options ................................................................. 117

Step 4: Prioritize Your Projects ..............................................................120

Stage Summary.....................................................................................124

Background > Types of Goals IT Should Set...............................................125

Financial ................................................................................................125

Organizational Goals .............................................................................126

Technology Operations..........................................................................128

Customer Service Goals........................................................................129

IT Governance Goals.............................................................................130

Getting Buy-In for Your Goals................................................................131

Using Your Budget as a Management Tool ...........................................132

Dealing with Budget Cuts ......................................................................133

Stage 8: Publish, Promote, Maintain Your Strategy .....................................135

Step 1: Build Your Strategic Plan Materials ...........................................137

Step 2: Present Your Plan to Senior Management ................................138


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Step 3: Communicate and Manage Change .........................................139

Stage Summary.....................................................................................141

Background> A Guide to Killer Boardroom Presentations...........................142

Guide to Developing a Communications Plan .......................................143

Design the Roll-Out Plan .......................................................................146

The Rollercoaster of Change.................................................................147

Adjusting Your Current Organizational Structure...................................149

Tips For Ongoing IT Strategic Governance...........................................150

Conclusion.......................................................................................................152

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IntroductionEstablishing a strategic planning process and governance model for Information Technology (IT) is critically important for making sound IT investment decisions, garnering support for IT projects, and proving IT is a strategic asset of the organization. Strategic planning is about building consensus, both on strategic goals and on a framework for making strategic decisions.

The goal of this methodology is to provide you with an effective process for goal setting and decision making in IT that aligns with the business goals of your organization. This methodology has three components that will help guide you through this process:

1. This step-by-step guidetakes you through the stages of establishing an IT Steering Committee and building a Strategic IT Plan. The guide also includes helpful background articles.

2. A collection of tools and templates that you will use for information gathering and analysis throughout the Strategic IT Planning process. These tools are available as both individual fi les, and are compiled into a printable Workbook, on your CD ROM.

3. A report template upon which you can build your Strategic IT Plan document. This will be a living document subject to annual review and updating.

Specifi cally, the Methodology breaks into eight stages. By following the steps in each of the stages listed below, you will build an IT strategy, which aligns well with your organization’s business strategy and lays the foundation for on-going strategic decision-making.

Why Strategic IT Planning?

In a late 2002 survey, Info-Tech Research Group asked IT managers how much Strategic IT Planning impacted the overall competitiveness of their organizations. The majority confi rmed that strategic planning did have an impact on increasing strategic planning did have an impact on increasing strategic planning did have an impactcompetitiveness.

Here are some of the consequences of not having an established IT strategy:

ü Increased risk of project failure due to a lack of understanding of, or support to, your organization’s overall business strategies.

ü Reactive, rather than proactive, technology decisions, leading to few opportunities to make your IT department a competitive weapon.

ü Inconsistent systems purchases and additional costs incurred as a result of unplanned purchases.

ü Limited participation of IT in the organization’s strategic planning process because of a lack of understanding of business strategy and IT’s role in the organization’s future.

Introduction


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Stage 1> Plan the Plan

Strategic planning is not just a task, it is a process. The better planned the process, the better the results. A strategic planning process is also a crucial communications vehicle between IT and the rest of the organization. An open and inclusive process will lead to a better plan and increased understanding by all.

• Step 1: Set Strategic Planning Goals. Start by answering the question, “What is Strategic?” when it comes to IT projects, processes, and investments. Work up a list of objectives for the strategic IT planning project.

• Step 2: Establish a Planning Group. List all the major IT stakeholders in the enterprise. Select for your planning team a group that can work productively on building the plan and then on championing the results across the organization. A truly open and effective process begins with a well-rounded working group.

• Step 3: Hold A Kick-Off Meeting. Review the steps of this methodology with the steering committee and set a preliminary time frame. Your timetable should establish momentum and a sense of urgency. Be aggressive but realistic with your deadlines.

• Step 4: Create a Preliminary Report. Make sure you have the full support and cooperation of senior management before you proceed. Put together a preliminary project description report. Include the overall goals, the steps that will be taken, the time frame, and any other preliminary cost estimates you have. Present this report to senior managers and get their sign-off.

Stage 2> Document Your Business Strategy

You can’t hope to align your IT strategy with the business strategy of the organization if you can’t fi rst demonstrate a clear understanding of that strategy. In this stage you will analyze your organization; background, mission and core values. The culmination of your analysis should be a succinct set of well-defi ned corporate objectives.

• Step 1: Describe the Company and Its Background. Analyze how your organization got to where it is today. Look at your history in terms of dates and growth milestones, but also in terms of past challenges that have been overcome. Put together a reasonably detailed description of your organization. Can you describe your organization’s overall purpose?

• Step 2: Conduct an Industry Analysis. An analysis of the industries in which your organization operates will provide a deeper context to your current strategic mission and key objectives. Use these analysis tools, as well as the theory contained in the background section, to better understand your industry.

• Step 3: Document Vision, Mission, and Core Values. Document your organization’s mission and vision statements and list your core values. Your organization mission statement should answer three equally important questions: Why do we exist? Whom do we serve? What do we produce?

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• Step 4: Defi ne Core Business and Its Boundaries. Examine your organization’s core competencies. What makes you special and different? Once you have defi ned your core business, determine what customers, channels, and competitors are within those boundaries.

• Step 5: Create a Financial Picture. Gather up-to-date fi nancial information of your organization. Financial information is one of the few ways you can make a real ‘apples to apples’ comparison of your organization to the rest of the industry.

• Step 6: List Strategic Objectives. Summarize your analysis in a succinct and forceful set of business objectives. These are the specifi c strategic objectives that you hope our IT strategy will align with.

Stage 3> Assess the Current IT Situation

Take a hard look at your current IT situation. Completing this section will help you identify the IT areas where the enterprise should focus investment. Before plans can be made about the future of the IT organization, the current state must be understood. You can’t manage what you don’t know you have.

• Step 1: Document Your IT Organizational Infrastructure. Prepare an organizational chart of your IT department. This should include functional areas like network support, programmers, and business analysts.

• Step 2: Document Your Hardware and Software Infrastructure. Identify and document your physical infrastructure. Without a fi rm understanding of your existing technology assets, you are essentially operating in the dark and strategic planning will be a futile effort.

• Step 3: Audit Current IT Projects. Understanding the current workload and spending patterns is essential to planning for the future. Defi ning the projects currently being worked on by the IT department will help you understand whether IT is aligned with the overall goals of your business.

• Step 4: Understand the IT Environment. Analyze the trends in your industry and the actions of your competitors. Look at industry trends and create competitor profi les.

Stage 4> Propose a New IT Situation

World-class IT departments are forward-looking and proactive. Creating an IT plan that only addresses your organization’s current needs has limited value in the long run. This stage will help you envision the future of IT in your organization.

• Step 1: Analyze IT Strengths and Weaknesses. Review your current IT situation asking tough questions about performance, alignment, and goal setting. Compare your current governance practice (if you have any) to an industry maturity model. Conduct an analysis of current strengths, weaknesses, opportunities and threats (SWOT).

Introduction


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• Step 2: Brainstorm Technology Opportunities. Hold a brainstorming meeting (or meetings) involving your strategic planning group as well as IT staff, senior managers, line managers, power users, and special applications users. Formulate a set of key questions to get the mental wheels turning.

• Step 3: Document Your Results. Document your fi nal recommendations for the future as approved by your planning group. Use diagrams and charts as much as possible and remember to continually relate your recommendations to the business goals of the enterprise.

Stage 5> Perform a Gap Analysis

Compare your current IT situation to the proposed situation you developed in the previous stage. By taking a detailed account of what you will need in the future and then matching it against your current infrastructure, you will be able to create a roadmap for the future.

• Step 1: Analyze Alignment Gaps. Review the results of “Stage 2: Document Your Business Strategy” and “Stage 3: Assess the Current IT Situation” in the context of the four quadrant strategic alignment model.

• Step 2: Analyze Infrastructure Gaps. Assess the IT requirements of the projects and areas of investment you identifi ed in “Stage 4: Propose a New IT Situation”. Look at where current IT systems and skills sets do and do not fulfi ll those requirements.

• Step 3: Summarize and Resolve Gaps. Put together a summary of the gaps identifi ed in both Step 1 and Step 2 and chart the implications for your IT strategy of addressing those gaps.

Stage 6> Propose a Strategic Vision and Governance Model

With a fi rm grasp of your organization’s business objectives and the ways that IT can enable them, now is a good time to establish a top level vision and mission for your IT department.

• Step 1: Hold a Vision Meeting With Stakeholders. Describe what needs to be done to achieve the future IT situation documented in Stage 4. Your IT core values represent the standard axioms by which IT is applied across the organization. Similar to the core values you documented for your organization, as a whole, strategic IT core values are the set of beliefs or philosophies that guide strategic IT decisions.

• Step 2: Establish a Strategic IT Vision. Use the guidelines for the organization vision statement in Stage 2 when preparing the vision statement for corporate IT.

• Step 3: Propose a Governance Structure. The strategic IT vision applies to all strategic level IT decisions across the organization. The IT Steering Committee is a cross functional committee for the on-going application of strategic priorities to all IT projects. Propose a charter for this group that draws a line from vision and objectives to specifi c actions.

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Stage 7> Build a Strategic Decision Making Framework

Translate your strategy into some tactical and operational goals. Now that you have identifi ed the gap between where you are and where you want to be, the next step involves making some recommendations and determining a course of action.

• Step 1: Set Strategic Goals and Measures. Begin the process of turning your strategy into action by setting some clear goals for the IT department. This takes the work you did in the previous stage – Set Your IT Strategy – and turns it into some actionable objectives for the upcoming year.

• Step 2: Perform a Budget Analysis. Goal setting and measurement are only two steps of the cycle. The last step is budgeting future performance levels. After you have gathered some actual information, budgeting next year’s information becomes much easier.

• Step 3: Identify Your Options. Begin identifying your options by taking a very high level approach. Using your gap analysis from Section 6, group together functions that you think can be fulfi lled by a type of application.

• Step 4: Prioritize Your Projects. Use a three-tier approach to prioritizing your projects. Our Project Ranking Framework is designed to provide you with a robust prioritization process that ensures that your department’s projects are aligned with the objectives of the business. These include:

1. Info-Tech Project Matrix

2. Info-Tech Priority Index

3. Info-Tech ROI Calculator

Stage 8> Publish, Promote, and Maintain Your Strategy

The main deliverable of this process is a Strategic IT Plan that provides a specifi c vision and goals for IT in your organization, a rational for prioritization of current IT projects, and a mechanism and governance model for making sound strategic priority decisions about IT into the future.

• Step 1: Build Your Strategic Plan Documentation. Use the Strategic IT Plan template to bring together all of the elements you have created in this process into one concise plan that can be recommended to senior management.

• Step 2: Present Your Plan to Senior Management. Present the plan to Senior Management and require its offi cial approval. require its offi cial approval. require

• Step 3: Communicate and Manage Change. If your planning process has been open and broadly based, the completed plan should not be a surprise to anybody. However, it is still important to develop a communications plan to ensure that all stakeholders are fully aware of the plan’s contents and implications.

Introduction


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Aligning IT With Business GoalsAny resource expended in an activity that does not advance either the strategic goals of the organization, or the functional requirements of other units in their quest to meet key business goals, is a wasted resource. Pursuing alignment is an exercise in effi ciency.

IT/Business strategy alignment has been talked about in business studies for 20 years. In a 1993 IBM Business Journal Article, J.C. Henderson and N. Venkatraman proposed a theoretical model for Strategic Alignment. A number of management researchers have further refi ned the model and applied it to a range of industries.

The IT/Business Alignment Model contains four main interrelated domains. Each of these areas contains three interrelated sub-domains. Graphically, the IT/Business alignment model looks like this:

Each of the four quadrants of the business alignment model must integrate with the other quadrants. Vertical integration is called strategic fi t; horizontal integration is called functional integration. So, for example, your information technology infrastructure needs to be accountable to both the overall strategic goals of IT (strategic fi t) while also being able to help individual business units realize their individual strategic goals (functional integration).

Strategic Planning and Alignment

Info-Tech Research Group’s strategic planning survey found that the vast majority of organizations that did strategic planning saw an improvement in business/IT alignment.

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Scope, Competencies, Governance An information technology strategic planning process needs to focus primarily on the Information Technology Strategy quadrant of the alignment model. The Information Technology Strategy quadrant includes:

• Technology Scope: The key technologies that support the current business scope as well as the technologies that enable new opportunities. Plan Strategy and Infrastructure Concurrently

• Systemic Competencies: Vital characteristics and strengths of information technology that provide advantages to the organization.

• Governance: How authority and responsibility for decisions is shared between IT and business partners. How project priorities are established.

Your strategic IT plan also needs to integrate well with Business Strategy and Technology Infrastructure. In an ideal situation, you will have concurrent plans in place or under development for both Business Plans and Technology Infrastructure. Business strategy also focuses on scope, governance, and core competencies as these apply to the whole enterprise. Infrastructure planning should focus on the following:

• Structure: Priorities, policies and choices that bring together applications, software, networks, hardware and data management into a cohesive platform.

• Processes: The procedures for managing IT infrastructure as well as practices for developing and maintaining applications.

• Skills: Human resources practices and issues specifi c to building an effective IT department.

If a well-articulated business plan and a technology infrastructure plan are in place or under development, work on the Strategic IT Plan will be that much easier. However, in the event they are not, this methodology contains tools for roughing in some working defi nitions of your business and infrastructure strategies. In essence, your efforts will drive development in these important areas.

Plan Strategy and Infrastructure Concurrently

It is strongly recommended that your infrastructure planning initiative be undertaken concurrently with your strategic planning.

Think of it as a conversation between the steering committee, which is setting strategic priorities and represents the whole enterprise, and the IT department that must articulate the infrastructure requirements and the specifi c projects that will realize strategic goals.

Further information/discussion of the alignment model can be found in the background section for Stage 1: Plan the Plan.

Introduction


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The Importance of Governance

The term “IT Governance” refers to formal high level processes and structures for IT strategic planning, prioritization, decision making and performance measurement. By having these formal processes and structures – such as IT strategy and steering groups – the organization can better:

• Align IT strategy with the business strategy

• Transform high level strategic goals into actual IT projects.

• Establish procedures for prioritizing IT projects that are understood and supported by all senior managers.

By “high level” we mean that these processes and structures extend beyond managing the IT department to address strategic IT issues across the entire enterprise. As they impact the entire organization they demand wider involvement and particularly the participation and support of senior management.

In “An Holistic Approach to IT Governance”, Harvard Business School Professor Charles Popper notes that formal decision making “helps to ensure that critical decisions are fully committed to by all groups in the enterprise.” Processes to do this have three main principles:

1. Senior managers will need to accept formal responsibility for strategic decisions regarding information technology, through an existing management committee or, if necessary, through a dedicated IT steering committee.

2. Agreed-on processes need to be developed to identify the decisions to be made; to collect, analyze, and disseminate the data needed for informed decisions, and to make and communicate the decisions.

3. Senior managers need to be involved on a regular basis. The business world at the turn of the millennium is too dynamic for a strategy to be implemented by remote control.

While being as fl exible as possible, it is still important to establish agreed upon processes and structures for strategic planning, prioritization, decision making and performance measurement.

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Methodology Overview SpreadsheetThis spreadsheet, located on the CD-ROM, will help you assess the amount of work that needs to be done to complete this methodology. Completing the stages of this methodology leads to the establishment of a strategic IT planning and governance practice as well as a written strategic plan. Every step should be completed as part of this process; however, you may have already completed much of this work as part of other projects. In these cases you can check off the steps as done and signifi cantly reduce the estimated hours it will take to complete your objectives.

The Agility ParadoxThe faster things change, the harder it is to develop a strategic plan. Yet the faster things change, the greater the need for strategic direction. This is the agility paradox. You can take the fi rst steps towards greater agility by developing a more fl exible strategic planning process for your organization.

Planning, Not the Plan

Start with the following proposition: It’s not about the plan. You can work toward the goal of making planning more agile by shifting your strategic focus from simply creating a plan to implementing an iterative, real-time process of alignment and execution.

Introduction


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Instead of thinking of your strategic plan as a reactive, stagnant annual document, think of it as a proactive, evolving entity that is in a state of perpetual change based on changes to the business environment. Developing such an agile strategic planning process will foster constant learning, give you the ability to adapt in real-time, and ultimately create opportunities for on-going competitive advantage.

Shortcomings of Traditional Strategic Planning

Often referred to as “dog-and-pony shows,” the traditional models for preparing an annual strategic planning document are too slow, too rigid, and too reactionary. A McKinsey report involving 80 companies characterized the annual strategic process as, “ritualized, politicized, and of little value.”

• Traditional models focus more on the bottom line and on making quarterly numbers than on innovation and real-time response to the market.

• They depend on predictable future outcomes, linear forecasting, and the extrapolation of historical data, thus failing to anticipate change.

• Traditional plans are often out-of-date before they are even fully conceived, and planners are forced to wait until the next planning cycle to react. By this point, windows of competitive advantage have already been lost.

The moments of stability normally experienced between cycles of change have become shorter and shorter, to the point where change is constant. Faster business cycles, rapidly advancing technologies, and expanding fi elds of competition, the threat of external change is much greater. The need for an agile strategic planning process is real.

Agility Tips

Each step in this methodology is necessary for the creation of a workable strategic governance practice. In addition to the formal processes laid out in this document, we add “agility tips” – suggestions on how you might achieve each stage in a more informal and timely fashion.

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How This Methodology WorksBelow is a brief explanation of how the methodology is laid out, and what you can expect to encounter in each section.

You have been provided with a hard copy of the methodology and background sections. The hard copy is intended as a quick reference, and to be used in lieu of reading from a computer screen. In undertaking the steps of this methodology, we strongly recommend using the electronic version provided on the CD-ROM. The electronic version will save you time in completing most stages and makes it easier to make changes during the process. Contents of the CD-ROM are designed for use on PC platforms using Microsoft Offi ce software (Microsoft Word, Excel and PowerPoint viewers are available on the CD-ROM in the “Viewers” folder for accessing fi les without Offi ce software). If the CD-ROM does not install automatically, you can access the contents by exploring your CD-ROM drive.

Each Stage in the methodology is broken down into Steps, which include the following sections:

• Objectives: Each step has objectives. Reading these objectives will help you nail down the purpose of each step and will give you direction.

• What You Need to Do: This section contains the action steps that you need to take in order to complete the objectives. These sections are the “meat” of this methodology and will guide you through the process in an easy-to-follow, step-by-step approach.

For each stage there are also corresponding Workbook sections as well as Background sections that provide further information on the subject of the stage.

• Background Sections: These sections should be viewed as optional reading - if you are not comfortable with your knowledge level of the topic at hand, use the related background information to quickly get you up to speed. Many workbook articles are drawn from Info-Tech advisory publications and have their own mini-action plans.

• Workbook Sections: These sections help you complete the action steps and gather documentation for a fi nal report. All workbook documents are in Microsoft Word, Excel, and PowerPoint format. Workbook documents can be accessed from the electronic version of the methodology through the hyperlinks within specifi c action steps.

Introduction


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When you insert the CD into your computer, the electronic version will automatically load and install itself onto your hard drive. An icon will be created on your desktop for easy access. Please note that all of the workbook fi les and interactive tools will be saved by default to their original location on your hard drive. We strongly recommend that you create a Strategic IT Planning folder on a backed-up network drive and save all of your work there.

Please Note: While we refer to the business or company, and in many cases relate stages or steps to business situations, this methodology is equally applicable to any type of for-profi t, non-profi t, or government organization. This terminology was used purely for consistency and to facilitate reading ease.

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Stage 1> Plan the PlanEvery moment spent planning saves three to four in execution.

Strategic planning is not just a task. It is a process. The better planned the process, the better the results. A strategic planning process is also a crucial communications vehicle between IT and the rest of the organization. An open and inclusive process will lead to a better plan, increased understanding by all, and closer alignment of corporate and IT strategy.

In this stage you will establish the who, what, when and why of your strategic planning process.

• You will establish who the stakeholders are in your strategic IT plan and establish a planning committee to include those stakeholders in the process.

• You and your committee will review the steps of this methodology and determine what will need to be done specifi c to your circumstances and establish when each stage should be completed.

• Finally you will complete a preliminary report for senior management that outlines the scope and the goals of the plan (the why). Approval of this report will constitute a why). Approval of this report will constitute a whygreen light for the entire process to commence.

Step 1 – Set Strategic Planning Goals

Start by answering the question, “What is Strategic?” when it comes to IT projects, processes, and investments. The answer to this question will help set the scope for the Strategic IT Plan. Work up a list of objectives for the strategic IT planning project. Identify areas where key steps have already been taken as well as areas that will require more work.

Step 2 – Establish a Planning Group

List all the major IT stakeholders in the enterprise. Select for your planning team a group that can work productively on building the plan and then on championing the results across the organization. A truly open and effective process begins with a well-rounded working group.

Step 3 – Hold a Kick-off Meeting

Review the steps of this methodology with the team and set a preliminary time frame. Your timetable should establish momentum and a sense of urgency. Be aggressive but realistic with your deadlines.


Stage

1


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Step 4 – Create a Preliminary Report

Make sure you have the full support and cooperation of senior management before you proceed. Put together a preliminary project description report. Include the overall goals, the steps that will be taken, the time frame, and any other preliminary cost estimates you have. Present this report to senior managers and get their sign-off.

In This Stage

Stage 1 > Plan the Plan..................................................................................... 21

Step 1 – Set Strategic Planning Goals .................................................... 23

Step 2 – Establish a Planning Group....................................................... 25

Step 3 – Hold a Kick Off Meeting ............................................................ 27

Step 4 – Create a Preliminary Report...................................................... 28

Stage Summary....................................................................................... 30

Background > Making the Case for Strategic IT Planning............................. 31

The Most Important Constituent: Senior Management............................ 32

The Importance of Communication ......................................................... 33

More Notes on Agility .............................................................................. 35

Co-opting the Power User ....................................................................... 36

Workbook

Stage 1 > Plan the Plan....................................................................................... 7

1.1 Scope Statement Worksheet............................................................... 9

1.2 Project Goal Statement ..................................................................... 11

1.3 Planning Constraints ......................................................................... 12

1.4 Identify Stakeholders ......................................................................... 14

1.5 Stakeholder Analysis Tool ................................................................. 15

1.6 Letter to Key Stakeholders ................................................................ 21

1.7 Kick-off Meeting Agenda ................................................................... 23

1.8 Convergence of Technology and Core Business Strategy ................ 24

1.9 Timeline Tool ..................................................................................... 25

1.10 Project Defi nition Statement ............................................................ 26

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Agility Tip: Have a Plan for the Plan

Every minute spent planning saves three minutes in execution. Two critical issues require your attention in this fi rst stage: establishing lines of communication and agreeing on a reasonable scope for this effort.

Holding a kick-off meeting is a great way to focus everybody’s attention. We recommend it. However, if your organization is small or averse to large formal meetings, you still need to establish some kind of planning circle.

Rather than formal meetings with formal agendas, you might instead try to schedule regular lunches or coffee break meetings with key stakeholders.

The important thing is that you continue to drive the process while keeping key stakeholders in the loop. Don’t try to go it alone.

Step 1 – Set Strategic Planning Goals Objectives:

• Establish the scope of your Strategic IT Plan.

• Establish strategic planning goals.

• Review possible constraints and steps to mitigate those constraints.

What You Need To Doü Create a Scope Statement. It is good to start by defi ning the kind of IT investments

and activities your strategic planning effort will address. In most simple terms, start by defi ning boundaries. What is strategic? Use “1.1 Scope Statement Worksheet” to help formulate a scope.

ü Outline the purpose of the plan. Use the worksheet “1.2 Project Goal Statement” to draft the primary reasons for developing a strategic plan.

ü Identify (and plan to mitigate) possible constraints. Think about the constraints you will encounter in implementing the plan. Use the worksheet “1.3 Planning Constraints” to list these constraints and how they might be avoided.

State the purpose(s) of the Strategic IT Planning process. Why are you preparing an IT planning document for your enterprise? What are the primary reasons you are undertaking this process and what do you hope to achieve?

One example might be “To align the IT organization with the business strategy of the North American operations.” Another example is “To identify technology-related projects that provide our organization with the highest return on investment.”



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Keep the focus of your goals externally oriented and speak to the enterprise as a whole. A goal such as “Make the IT department better at serving our customers” is a laudable departmental goal, but it is more functional rather than Strategic. Your Strategic IT Plan should be about establishing how information technology will make the enterprise more effective and competitive.

Identifying Constraints

As much as we would all like to believe that everybody in an organization is headed in the same direction, the reality is that there are numerous internal agendas. Successful implementation of any plan relies on a number of factors that are outside of your control.

Think about the constraints you will encounter in order to implement your plan. List the major constraints in the project constraints worksheet. Then think about what steps might be taken to mitigate those constraints.

For example, you may have diffi culty scheduling time with all of the stakeholders. Alternatively, if IT has historically served in a support capacity at your organization, you may face resistance from senior management who do not see the need for a strategic plan for the IT department.

What Is Strategic?

It will be noted later in this methodology that an IT governance structure is not a replacement for the IT manager. However, there are certain IT projects that are beyond the scope of the functional duties of the IT department. Give some thought to what kinds of projects occupy this space.

Info-Tech Research Group suggests that you look at projects that might be strategic from three perspectives:

• Reach and Impact: Who is affected directly and immediately by a proposed project? Will it involve the participation of more than one department? What proportion of IT users across the organization will be impacted?

• Standards: Any action that sets or impacts an Information Technology Standard for the entire enterprise will, by defi nition, affect everybody. Any such standard should have demonstrable impact on moving the enterprise toward its goals.

• Cost: It may seem crass to identify a project as strategic simply because of its price tag, but another way to look at it is that any project that carries a price over a certain amount, which does not advance the strategic goals of the organization, should be suspect.

As an example, consider something as simple as upgrading a PC operating system. Upgrading one PC isn’t strategic. However, if a new Web services based content management system requires Offi ce XP running on Windows XP, then it may be necessary for the company to standardize on Windows XP. A project to upgrade every PC to Windows XP would certainly have the reach and impact, not to mention the cost, to make it a strategic project.

In this case the project should be analyzed and approved within a strategic context. An enterprise-wide operating system upgrade does have the scope and impact, standards implications, and cost to warrant being considered strategically.

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Step 2 – Establish a Planning Group Objective:

• Identify and contact the key stakeholders who can participate in the strategic process.

What You Need To Doü Identify stakeholders. Use the worksheet “1.4 Identify Stakeholders” to create a

preliminary list of people who you may want on your steering committee, or those that you will enlist as ‘champions’, in order to implement your strategic plan.

ü Think carefully about this list. Your list should consist not only of management above you, but also of your peers and subordinates. Use worksheet “1.5 Stakeholder Analysis Tool” to further refi ne your list.

ü Invite key stakeholders to join the steering committee. The Strategic IT steering committee will be the primary planning body for Strategic IT. This group will participate in the creation of the strategic plan, and will be the basis for a permanent governance group.

Creating your steering committee is the most crucial part of this stage of the strategic planning process. The steering committee will be the basis for both drafting a strategic plan and for long term IT strategic governance in your enterprise.

A steering committee will help perform two important roles for the management of an organization’s IT direction:

• Alignment. The committee helps ensure that IT strategy is aligned with the strategic goals of the organization.

• Ownership. IT enables all functional units within the organization. These units have to play a role in larger IT strategic decisions since those decisions will impact their processes.

Consider the alignment model sketched in the introduction to this methodology. Other department managers and key executive decision makers are going to have to be in the loop if you are going to build both strategic fi t and functional integration across the organization.

The steering committee will help you develop a strategic vision for IT in the organization. They will also act as an on-going review body that will help you judge the strategic merit of IT projects and investments. As IT has enterprise-wide implications, it makes sense that you should involve constituents of the enterprise outside of IT in strategic planning. It is also important, however, to remember the following:

• A steering committee is not a clearinghouse for functional demands of the various units in your organization. This is not the place for fi nance to complain about bugs in their new system or for personnel to note ineffi ciencies in the help desk.

• A steering committee is not a replacement for the IT manager, or management team of the IT department. The IT manager manages his or her department. The



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steering committee helps set priorities for IT investment and evaluates how well the entire organization is progressing in meeting strategic goals.

• The steering committee is not a “rubber stamp” for the IT department. The committee must be able to gauge the business impact of various proposed IT projects. They are not there simply to communicate the latest decision by the IT managers. They must have the power to say another project has higher priority.

Agility Tip: The Perils of Going It Alone

What if your organization or department is small and culturally averse to the idea of a formal committee? At the very least build an informal network of contacts, keeping stakeholders and senior decision makers in the loop about the planning process.

Whether it is a ten-person committee or a couple of decision makers with whom you regularly have coffee, open communication and stakeholder involvement is the key.

Meetings, communication, consensus building: These are all time consuming tasks. Wouldn’t it be easier just to take this methodology into your offi ce, work through the steps, and present a fi nished strategic plan to your CEO?

You can go it alone with this methodology, but the resulting plan will be more likely to sit on a shelf and never really impact management decision making. Wider involvement in planning guarantees better and more lasting results as more people will have a stake in the outcome.

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Step 3 – Hold a Kick-off MeetingObjectives:

• Bring together your steering committee to formally launch the project.

• Refi ne goals and establish an initial timeline for the project.

What You Need To Doü Use the “1.6 Letter to Key Stakeholders” template to make initial contact with your

proposed steering committee members. Outline the goals and expectations of the planning project.

ü Use “1.7 Kick-off Meeting Agenda” as a basis for your meeting. Discuss the goals and possible constraints that you have outlined with the steering committee and if necessary, revise goals and expectations based on their input.

ü Use “1.8 Convergence of Technology and Core Business Strategy” PowerPoint presentation to help explain the importance of IT/Business alignment and establishing IT governance.

ü Use “1.9 Timeline Tool” to establish a preliminary timeline for the Strategic IT Planning project. Estimate an approximate time for each of the stages in this methodology.

The kick-off meeting is an excellent opportunity to introduce your steering committee members to each other and to the project. Review the goals and possible constraints that you have already identifi ed. Use this meeting to set a clear understanding of the importance of the project as well as the importance of the committee.

• The project kick-off meeting should run no more than a couple of hours. You don’t want to make the group think that the project is nothing but a series of long meetings.

• If you can have the President or CEO kick-off the meeting with some encouraging words, it would be a great shot in the arm to the project.

• Introduce the members of the team to each other. Depending on the size of your organization, some members may not know each other.

• Discuss responsibilities of the team. Explain that this is an enterprise-wide IT plan and the input of the entire steering group will be critical.

• Share your preliminary goals and discuss possible constraints with the team. Be willing to listen to concerns and ideas. Make sure you encourage feedback from the team.

• Finally, review the steps of the plan and put a rough timeline together. Better to be up front with the group and let them know that this isn’t a ‘back burner’ project. Make sure the group understands how the project will be tracked and what the status update routines will be.



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Creating the Timetable

Review the steps in this methodology with your team and establish a completion date for each step in the strategic planning process. Try to stick to your dates as much as possible.

This is your opportunity to streamline the process:

Although the best IT plans include all of the stages in this methodology, the information gathering involved can be very time-consuming work. For each stage of the process, ask “Has this been done already?” and “Do we already have this information?”

For example, in Stage 2 you will be documenting your organization’s strategic vision and business direction. If your organization has recently completed a Strategic Plan, this documentation probably already exists and the time required to complete this stage will be drastically reduced.

Keep your timelines aggressive but realistic:

One of the biggest obstacles to creating and implementing a successful strategic plan is managing the energy and enthusiasm of the people involved over time. At the outset, you will likely have no shortage of energy to put into creating the plan. However, as time goes on, you and your steering committee’s energy will wane.

If this exercise takes too long, or you keep missing deadlines, you will have trouble sustaining enthusiasm, and the likelihood of creating a successful plan will diminish signifi cantly.

Step 4 – Create a Preliminary ReportObjectives:

• Document the purpose of the Strategic IT Planning and Governance Project.

• Identify possible project constraints and limitations and mitigation options.

• Set a timeline for the project.

• Gather top-level support.

What You Need To Doü Use the template “1.10 Project Defi nition Statement” to bring forward information

from all the steps in this stage into a preliminary report.

ü Garner top level support. Make sure your report is understood and approved by senior management.

In this step you will review and consolidate the content created in the fi rst three steps of the Plan the Plan stage into one consolidated report that you can take to senior management for approval. In your project defi nition statement, you will do the following:

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• Begin with the purpose of the plan. State the purposes of the Strategic Planning project in the Project Defi nition Statement. List the primary reasons that the organization is undertaking this process and what it hopes to achieve. Use your revised goal statements from worksheet “1.2 Project Goal Statement.”

• Include the constraints you have identifi ed. Successful implementation of any plan relies on a number of factors that are outside of your control. Using your completed worksheet “1.3 Planning Constraints” list any constraints, limitations, or obstacles that you can think of, as well as possible solutions within the Project Defi nition Statement workbook.

• Set a timeline. Use the “1.9 Timeline Tool” to lay out a preliminary timeline for the project. These dates may be adjusted later, however setting some general targets now is a good start. Use the various stages outlined in this methodology as macro-level milestones and establish completion dates for each stage.

• Gather top-level support for the project. The CEO and other top-level management should be involved in this project either directly or through a representative on your planning committee. Either way their support and endorsement is essential when trying to re-deploy resources to your project and soliciting help from organization employees. This can be an informal meeting – if you can, sit down with some of the brass and get their take on the project. Show them your defi nition statement, constraints, timeline and budget, and solicit their feedback.



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Stage Summary: Plan the PlanTime spent planning saves time in execution. You should now have a planning group with a strong and shared sense of mission. In the next stage you will lead this group through a critical information-gathering exercise. In order to align IT with the business, a clear picture of the current business mission and goals needs to be drawn.

The following chart shows the progress of developing the plan after Stage 1 of the engagement.

Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals 2Analyze Core Competencies and Competitive Position 2Current IT Organizational Structure. 3Hardware and Software Inventory 3Analysis of IT Trends 3Review of IT Against Governance Maturity Model 4IT SWOT Analysis 4List of Proposed Future IT Directions 4List of Requirements for Resolving Gaps (Roadmap) 5Corporate IT Vision Statement 6Corporate IT Governance Charter 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Page 31

Background > Making the Case for Strategic IT PlanningIn the pre-planning stage it is critical that you make the case for strategic planning of enterprise IT investment. In many organizations, thinking strategically about IT may be a new concept. This is because IT is more often seen as a functional enabler of business processes.

Consider the four-quadrant IT/Business alignment model that was presented in the introduction to this methodology. In an ideally aligned IT organization, there is a balance between Functional Integration and Strategic Fit. The IT department is integrated with both the Business Infrastructure and an overall Technology Strategy that is aligned with the Business Strategy.

IT alignment in actual companies can be quite different than what is modeled here. For example, an organization could have a strategic plan, but IT has never been looked at strategically. In this case the IT department’s agenda is very much infl uenced by the functional requirements of the individual departments who are each striving to fi t their individual plans with the overall strategy.

In this case the alignment model is entirely weighted toward functional integration. In Strategic Alignment parlance, the business strategy is the anchor, the business infrastructure is the pivot and IT is the impact domain. It is also possible, but perhaps less likely, to go too far in the other direction. You could have an organization where IT is always seen as a strategic driver and individual business units are left to fend for themselves. In this case it is IT strategy that is the pivot between the business strategy anchor and the IT infrastructure impact.

Assuming that the image at left above comes closest to describing your situation, what is the motivation for changing this relationship? You need to make the case that balancing functional requirements with IT Strategy will benefi t your organization. In short, make the case that a well-thought-out IT strategy can make your enterprise more competitive and profi table.



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In late 2002 Info-Tech Research Group surveyed IT managers about Strategic IT Planning (SITP). Use the following points from the survey in bolstering you case:

• Increased Competitiveness: 65% of organizations utilizing SITP reported that their entire organization was at least somewhat more competitive due to utilization of SITP; 15% indicated that utilizing SITP has signifi cantly increased their signifi cantly increased their signifi cantlyorganizations’ competitiveness.

• Increased Ability to Obtain Funding: 73% of organizations utilizing SITP reported an increased ability to obtain funding for new IT initiatives.

• Increased Executive Support of IT Strategy: 80% of respondents utilizing SITP versus 67% of respondents not using SITP reported that IT strategy was of high or moderate importance to senior management in their organization.

• Improved IT/Business Objectives Alignment: 94% of respondents utilizing SITP reported having improved the alignment between their IT objectives and those of the organization as a whole.

• Better Project Tracking and Budgeting: Organizations utilizing SITP were more likely to fi nish their projects on time and on budget than those organizations not utilizing this practice

The Most Important Constituent: Senior ManagementSenior management involvement (CEO and senior managers) in the strategic IT planning process is absolutely critical. In fact, if you don’t have upfront buy-in and support, it is really worth asking whether or not you should proceed.

In 1998 a research report from McKinsey Group argued that most companies fall within four categories in terms of their use of Information Technology.

1. IT Laggards. Were slow to use new technologies either effi ciently or effectively in support of core business process. Almost half of the companies studied by Mckinsey fell into this category.

2. Big IT Spenders. These are companies that have tried to stay ahead of the curve with large IT expenditures. Unfortunately, they have not balanced these efforts with effi ciencies and are not getting enough bang for their buck.

From Enabler to Strategic Investment

The purpose of IT has shifted from enabling the organization to actually delivering value to the customer. Consider these trends from A.T. Kearney.

ü 1996: 50% of CEOs felt that technology decisions infl uence overall business strategy.

ü 1998: 55% of CEOs were devoting 22% of their time toward trying to keep abreast of technologies that would affect their business.

ü 2000: Technology is not only viewed as part of the strategic business process, but is considered a fundamental key driver.

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Page 33

3. Cautious IT Spenders. These are companies that focus on effi ciency of functional IT but fail to think about how IT can have a strategic impact.

4. IT Stars. These companies are a minority (27%). They have successfully balanced effectiveness and effi ciency. They spend less than the big spenders, but the expenditures they make have a greater return.

In their prescription for how IT Laggards can become IT Stars, the McKinsey researchers posited “seven highly effective habits” for IT in companies. The very fi rst of these habits is “IT must be a top management affair”. They found that top management at IT laggards spent 20 hours per month focused on IT. At IT stars, top managers devoted 45 hours.

At IT stars, the researchers found, “top managers devote time and energy to developing an IT strategy, and get actively involved in introduction of new systems.” (“Manufacturing Use and Abuse of IT”, McKinsey Quarterly, 1998 issue 1, p 138.)

The Importance of CommunicationA 1999 study of “Enablers and Inhibitors of Business-IT Alignment for the Association for Information Systems” surveyed hundreds of IT executives and business executives. The survey resulted in the following table of enablers and inhibitors.

Enablers InhibitorsSenior executive support for IT IT/business lack close relationshipsIT involved in strategy development IT does not prioritize wellIT understands the business IT fails to meet its commitmentsBusiness - IT partnership IT does not understand businessWell-prioritized IT projects Senior executives do not support ITIT demonstrates leadership IT management lacks leadership

An interesting observation of the study was that the enablers and inhibitors were seen as two sides of the same coin. It is really all about communication. If you and your non-IT masters and colleagues plan together, use a common vocabulary, and share the same vision, alignment follows.



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Here are four suggested actions for enhancing alignment in your organization. All four are addressed in this methodology.

1. Build Governance Procedures and Structures that involve the broader management team in IT investment decisions. Such a governance body is usually called a “Steering Committee” though other terms like “IT Investment Committee” can also be used. This committee should make sure that IT planning and strategic planning are linked.

2. Learn the Language of Business: The benefi ts of any IT project must be expressed in business, rather than technical terms. Prepare a business case for each signifi cant technology investment. Some can be diffi cult to justify in isolation (e.g. security, storage), but can be justifi ed as part of a broader business objective (e.g. business continuity, letting customers serve themselves online).

3. Measure Every Important IT and Business Outcome (e.g. project completion dates, budgets, sales, and profi ts). Business and IT metrics should also be linked (e.g. $1 million in new sales in six months after completing the e-commerce project). You should “treasure what you measure” because it sends an important message to everyone that not only is the outcome important, but it’s important enough that you need to set goals and monitor progress towards them.

4. Communicate Clearly through policies, procedures, service level agreements, and Communicate Clearly through policies, procedures, service level agreements, and Communicate Clearlyproject charters to ensure on-going understanding of both the functional and strategic role of IT and IT investments.

Easier Said Than Done

In 2002, META group reported that alignment had been among the top fi ve concerns of IT executives over the previous fi ve years (number one ranked in 2002). Yet, in spite of this fact – and the fact that the idea of alignment has been around for 20 years – alignment is still elusive in many companies.

In the same year Balanced Scorecard Magazine and CIO Magazine co-sponsored a survey of 500 IT and business executives. Among the fi ndings:

• While most respondents (58%) said there are general efforts to link IT spending with strategy, only 10 percent said spending was “explicitly based” on strategic plans.

• 47% saw IT’s role as “reactive problem solver”, while only 28% reacted favorably to the title “strategic consultant”.

• Almost half of respondents didn’t think their organization had done a good job making strategic goals clear to all employees, and only a third thought their IT strategic priorities were well linked to business strategy.

Does this mean that alignment, as an idea, has been a failure? A more realistic reading is that perfect alignment is more theory than reality: it is an ideal that motivates on-going efforts, such as strategic planning and governance. Research shows that the better aligned the business and IT strategy, the better the potential for positive return for the enterprise.

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Page 35

More Notes on AgilityFocusing on an open on-going strategic process, as opposed to writing an annual strategic IT planning document, is the key to keeping your strategic planning agile. Here are some additional tips on building agility from the McLean Report article “An Agile Strategy for A Dynamic World”.

Consider this food for thought as you build your strategic practice.

1. Gather corporate and departmental support. Because IT strategic planning is closely tied to corporate planning, this initiative must be backed by senior management. Since agility is an initiative that will affect the entire company, you will also need to gather stakeholders from various departments and functional units. Overall, there must be corporate initiatives in place that cultivate a change-tolerant and fl exible culture.

2. Envision the strategy. As a starting point for your agile strategy, identify the factors that could change the business environment in the future and prepare multiple scenarios to anticipate threats and opportunities more accurately. Outline a focused, long-term strategy based on the scenarios most likely to occur, and develop high-level strategic options for other likely scenarios. Set guidelines for the real-time creation of new options in the event that unforeseen scenarios transpire.

3. Design the strategy and plan for changes to the corporate infrastructure. Ensure that the strategy you envisioned is tactically possible given the various scenarios. Consider the entire value chain – how will these initiatives affect your suppliers, customers, and business partners? The largest hurdle in adopting a fl exible, agile strategy will likely be your IT infrastructure. Consider the following implications for IT:

• Open architecture needs to be a working reality. While individual technologies and applications may change based on strategic objectives, the entire technology infrastructure must evolve into a set of standards-based services, capable of maximum fl exibility.

• The IT investment policy must change from simply endorsing planned replacements to a model of continuous adaptation based on business needs.

• Information assets need to be made readily available and reusable to all authorized users while maintaining a high level of security.

• A process must be created to manage workfl ow – providing access to information for those who need it, and restricting access from those who don’t. Strategic decisions to outsource or in-source should be supported by fl exible systems capable of change.

• Business and IT processes need to be developed and resources deployed to gather real-time performance measurements during the execution phase.

4. Execute the strategy and gather feedback. The success/failure of your strategy should be measured in real-time as the implementation occurs. If feedback indicates that



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there are holes in the design or vision of the strategy, then these should be modifi ed. This is the crux of the real-time strategy, and is the most diffi cult to implement.

5. Maintain a continuous process for strategic development. Allow for the introduction of new ideas and innovations mid-planning cycle and respond to new opportunities and threats as they occur. Instead of an annual analysis of the strategy, evaluation of strategic effectiveness should be occurring on an on-going basis. Once the process is in place, the strategic planning process should be less time-consuming, as changes will be incremental and less drastic.

• Preparation and execution are lengthy processes. Infusing these with real-time feedback of environmental and competitive changes as they occur will prevent companies from wasting time on outdated initiatives. Document all changes, initiatives, ideas, and market infl uences for later reference during the on-going strategic planning process.

Co-opting the Power UserThere is a power user in your organization. Let’s call him Bob (or Alice will also do). Bob is respected in his department because of his above average understanding and use of information technology. Bob doesn’t like you.

More precisely, Bob doesn’t like the direction your IT department is taking. He is openly critical of IT with other users. Why? Maybe your department refused his request for non-supported technology without explaining why or offering an alternative. Maybe the help desk failed to answer his sophisticated queries. Maybe he just wants a little respect for his opinions from the IT decision makers.

The Bobs and Alices of your organization could undermine your credibility and frustrate your plans. It’s also true, however, that Bob and Alice could have some great ideas with genuine business value. Your job is to understand these skeptics and make them your allies. How?

• Ask department heads and your own IT support groups to give you the names of the power users in various units. Skeptical business unit executives should be easy to fi nd since many of them come to executive meetings and make their skepticism known. The skeptical end-user, however, is a bit harder to track down.

• Check help desk logs to see how often the power users on your list have used your services. If he or she is not using your services, take this as a sign that they do not have adequate confi dence in your ability to support them.

• Invite potential power user skeptics to meet with you to discuss IT directions.The skeptic may be fl attered by your request and more open to dialogue. Involve them further by tapping them during fact-fi nding phases of planning for new projects.

• Help the skeptic become the local expert in new tools and services you plan to introduce. This will help them protect their leadership status among their peers and ease any feelings of threat they may have.

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• Post positive performance indicators and testimonials from satisfi ed users at public places on your intranet.

Be prepared to listen to your power user skeptics. You may know more about IT, and they may have more knowledge of how things have played out on the ground in the past. Keep in mind that their skepticism may come from a perception that you’re repeating the mistakes of your predecessors. Remember: the best way you can understand and win over skeptics is to keep them close to your side and involve them in planning initiatives. They might even provide a valuable window into the business needs of your organization.



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Stage 2> Document Your Business StrategyIn the four-quadrant business-IT alignment model outlined in the introduction to this methodology, the IT strategy must be functionally aligned with the business strategy. Realistically, you can’t hope to integrate your IT strategy with the business strategy of the organization if you can’t fi rst demonstrate a clear understanding of the business strategy.

In this stage you will analyze your organization’s background, mission and core values. The culmination of your analysis should be a succinct set of well-defi ned corporate objectives as well as an understanding of the environment in which your organization competes.

Step 1 – Describe the Company and Its Background

Analyze how your organization got to where it is today. Look at your history in terms of dates and growth milestones but also in terms of past challenges that have been overcome. Put together a reasonably detailed description on your organization. Can you describe your organization’s overall purpose?

Step 2 – Conduct an Industry Analysis

An analysis of the industries in which your organization operates will provide a deeper context to your current strategic mission and key objectives. Use these analysis tools, as well as the theory contained in the background section, to better understand your industry.

Step 3 – Document Vision, Mission, and Core Values

Document your organization’s mission and vision statements and list your core values. Your organization mission statement should answer three equally important questions: Why do we exist? Whom do we serve? What do we produce?

Step 4 – Defi ne Core Business and Its Boundaries

Examine your organization’s core competencies. What makes you special and different? Once you have defi ned your core business, determine what customers, channels, and competitors are within those boundaries.


Stage

2

Use your steering committee

Use members of your committee – such as participants from the senior management team – for information gathering.

Steering committee members should have information for this stage readily at hand. If not, have committee members invite resource people from their departments to help you build this information.


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Step 5 – Create a Financial Picture

Gather up-to-date fi nancial information of your organization. Financial information is one of the few ways you can make a real ‘apples to apples’ comparison of your organization to the rest of the industry.

Step 6 – List Strategic Objectives

Summarize your analysis in a succinct and forceful set of business objectives. These are the specifi c strategic objectives that you hope our IT strategy will align with.

In This Stage

Stage 2> Document Your Business Strategy.................................................. 39

Step 1 – Describe the Company and its Background.............................. 42

Step 2 – Conduct an Industry Analysis.................................................... 43

Step 3 – Document Vision, Mission, and Core Values ............................ 44

Step 4 – Defi ne Core Business and Its Boundaries ................................ 45

Step 5 – Create a Financial Picture......................................................... 46

Step 6 – List Strategic Objectives............................................................ 47

Stage Summary....................................................................................... 48

Background > Analyzing Business Strategy.................................................. 49

A Company’s Value Chain....................................................................... 49

The Supply Chain .................................................................................... 51

Industry Lifecycles ................................................................................... 52

Porter’s Five Forces Model ..................................................................... 54

Environmental Analysis (PEST) .............................................................. 55

Identify Your Organization’s Core Competencies.................................... 55

Key Success Factors............................................................................... 57

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Workbook

Stage 2> Document Your Business Strategy.................................................. 33

2.1 Company Background and Description ............................................. 35

2.2 Industry Defi nition.............................................................................. 38

2.3 Priority Industries............................................................................... 41

2.4 PEST Analysis ................................................................................... 42

2.5 Core Values....................................................................................... 44

2.6 Company Mission and Vision ............................................................ 45

2.7 Core Business and Its Boundaries .................................................... 47

2.8 Business Unit Core and Goals .......................................................... 49

2.9 Company Financial Picture................................................................ 51

2.10 Company Strategy and Goals ......................................................... 55

2.11 Key Success Factor Analysis Tool ................................................... 57

Agility Tip: Keep an Eye on Change

The tools in the workbook for this section are designed to help document a company’s vision, mission, core business, and objectives. It is hoped that these elements are already documented or at least there is a fi rm idea of what they are in the heads of your senior executives.

An important issue, from an agility standpoint, is that you be kept in the loop if there are any signifi cant changes in direction. Aligning with strategic goals that are moving targets can be hard enough, but not knowing that the target has been moved will be even worse.



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Step 1 – Describe the Company and Its BackgroundObjective:

• Build a synopsis of your organization including where it comes from and where it is going.

What You Need To Doü Outline Your Organization History. Use the worksheet “2.1 Company Background and

Description” to create a brief history and description of your organization.

ü Outline Recent/Future Challenges and Changes. What kind of challenges and crises has your organization overcome? Are there major changes, such as a change in ownership, on the horizon? Make sure your profi le takes account of recent and pending changes.

Begin with historical information and documents about your organization. Much of this information will be readily available, although it may not be in an ideal format. The key to this section is to develop an appreciation of your organization from a business perspective.

Consult existing organization documents (e.g. business plans, fi nancial statements, annual reports). Members of your steering committee should also be able to supply this information. In a public organization, the easiest place to start is the most recent annual report.

The aim of this stage is to build a structured profi le of your company. You may be surprised to fi nd that, while everybody feels they know why the company exists, there is no consistent written understanding of where the company came from or where it is going. By focusing on your vision of the company you will better be able to focus on the technologies and policies that will help it succeed.

Having sharpened your understanding of the company, you will in the next step sharpen your understanding of where your enterprise stands in relation to competitors.

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Step 2 – Conduct an Industry AnalysisObjective:

• Gather implications based on an analysis of the industries in which the organization operates.

What You Need To Doü Defi ne your industry. Use the worksheet “2.2 Industry Defi nition” in the workbook

to document your industry. Your defi nition is based on the answers to the following questions:

• In what industry (or industries) does the organization compete?

• How large is the industry and what role does your organization play in it?

• Is the industry dynamic and quick to change, or is it a traditional industry where things have been essentially the same for the last 20 years?

ü Prioritize multiple industries. If your organization operates in multiple industries, use the worksheet “2.3 Priority Industries” to determine if any industries are viewed as a more important strategic priority to the organization.

ü Conduct a PEST Analysis. Depending on the size and complexity of your organization, you may want to take your industry understanding a step deeper. If so, complete a “2.4 PEST (Political, Economic, Social, and Technological) Analysis”. A PEST analysis will give you a fi rm understanding of the environment within which the organization is operating.

Every organization operates in at least one market with at least one product. Depending on the complexity of your customers and products, you probably have several distinct customer sub-groups and product groups. Most importantly, your organization may operate in different industries. Each industry has different dynamics, levels of competitiveness and levels of profi tability.

Conducting an industry analysis and understanding industry drivers will help you better understand your corporate mission and strategy. The background to this stage includes additional information about Industry Lifecycles, Porter’s Five Forces Model, and PEST (Political, Economical, Social, and Technological) analysis. These are standard management theories that will help you in your analysis.



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Step 3 – Document Vision, Mission, and Core Values Objectives:

• Document the Mission and Vision Statements of your organization.

• List the core beliefs and philosophies that drive your organization’s strategy.

What You Need To Do

ü List core values. Use the worksheet “2.5 Core Values” to list the values on which your organization culture and direction rest.

ü Document organization mission and vision. Use the worksheet “2.6 Company Mission and Vision” to document corporate vision and mission statements.

Your organization operates on a set of values that guide strategic planning and organization direction. Core values guide our day-to-day behaviors and collectively create the desired culture of the organization. Sometimes called “beliefs” or “philosophies”, they should be few in number and meet the following criteria:

• They are shared by a majority in the organization. While individual values can be different, an organization as a whole requires shared values.

• They determine the norms or standards of acceptable behavior concerning how to approach your work.

• They are enduring and consistent over time. They are traits your organization will never give up (even in diffi cult times).

• They are driven by, and crystallized from, the top leadership in the organization.

More than likely, your organization has both a vision and a mission statement. Use these statements to fi ll out this section. Don’t worry about fi nding the perfect wording for either the vision or the mission statements. For now, just get the key concepts down on paper.

A vision statement describes an image toward which your organization is striving. Most organizations’ visions say things like “to create an organization with which customers line up to do business and for which employees can’t wait to come into work.”

If your organization does not have a mission statement, use the Mission Development Triangle below to develop a working statement.

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Step 4 – Defi ne Core Business and Its Boundaries Objectives:

• Identify those activities that fall inside and outside of the core business.

• Identify core business and boundaries for individual business units.

What You Need To Doü Think about which line or lines of business are at the heart of your organization’s

success. Enter these unique core business lines into worksheet “2.7 Core Business and Its Boundaries”.

ü Defi ne the boundaries for the core business in terms of market, operations, channels, and competitors.

ü If you have more than one business unit, defi ne core business lines and boundaries for each unit. Use worksheet “2.8 Business Unit Core and Goals” to create a profi le for each business unit.

Depending on the size of your organization, defi ning your core business may either be an easy task or a very diffi cult one. There are a lot of consulting companies whose primary business is helping fi rms determine their core business. It should not be as diffi cult as this – spend some time thinking about which line or lines of business are at the heart of your organization’s success.

Part of defi ning your core business is also drawing a boundary as to what falls outside your core business. In contemplating this section, many managers often realize that they spend an inordinate amount of time on activities related to ancillary business rather than focusing on



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making improvements to the core. For example, a car manufacturer’s core business may be designing engines. Tire design and manufacture would not be included in the car maker’s core business.

Once you have defi ned the core, determine what customers, channels, and competitors are within the boundaries. Although you may already have an intuitive sense of what falls within and what falls outside of your core business, putting it down in writing should solidify your understanding.

Step 5: Create a Financial Picture Objectives:

• Create a fi nancial profi le of your organization.

What You Need To Doü Use the worksheet “2.9 Company Financial Picture” to construct a fi nancial

profi le of your organization and its competitors. The worksheet lets your create profi les for the following:

• Total Company Revenues • Capital Budget• Growth Rate of Company Revenues • Operating Profi t• Total Revenue Over the Internet • Inventory Turns• Growth Rate of Internet Revenues • Cost of Goods Sold• Number of Employees • Cost of Labor• Expected Number of Employees

ü For each category, list your organization’s information in the top box and list the industry average in the box below.

Financial information is one of the few ways you can make a real ‘apples to apples’ comparison of your organization to the rest of the industry. If you work for a publicly traded company, fi nancial information about your organization is public record and should be easy to fi nd.

Private companies are not obligated to furnish fi nancial information to either their employees or the general public. In most private companies, fi nancial information is provided on a need-to-know basis only. Talk to your fi nance department and senior management.

You should still attempt to obtain some, or all, of the following information because it will give you a sense of how well your organization is doing fi nancially and how strong you are relative to other companies in your industry.

Once you have collected information about your own organization, do some research using either the Internet or industry associations to fi nd out how you compare to others in the industry.

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Step 6 – List Strategic Objectives Objectives:

• Create a succinct list of primary corporate strategic goals.

• Create a succinct list of business objectives.

What You Need To Doü Review all of the information collected in this stage of the methodology. (Mission

Statement, Vision Statement, Core Business Defi nition, Financial Information)

ü Use the worksheet “2.10 Company Strategy and Goals” to formulate lists of primary strategic goals and business objectives.

ü Take your analysis further with “2.11 Key Success Factor Analysis Tool”. This tool will look beyond what the organization wants to achieve to a more specifi c analysis of what the organization has to do.

An organization strategy can take many different forms and timeframes. It may consist of fi nancial targets, such as revenue and profi t growth, increase in share price, or a decrease in levels of inventory. It may also consist of other, non-fi nancial goals, such as number of new product launches, improved brand recognition, or additional partnership arrangements.

Businesses operate towards a set of business objectives. Depending on the organization, these may or may not be properly defi ned. The point of this section is to clarify your organization’s strategic business objectives.

Read back through the work you have completed and tie it together into one powerful document outlining your business objectives. We suggest using point form and listing no more than ten objectives.

Compare the business objectives you determined with the ones listed in your organization’s business plan or annual report. Companies’ stated intentions are often very different from the forces actually driving the organization.

Keep your list of business objectives close at hand and refer back to it when completing subsequent sections.


Key Success Factors

Now that you have identifi ed your goals and strategy, you can determine what the Key Success Factors are for achieving these. After you have identifi ed how the Key Success Factors infl uence management decisions, you should prioritize the Key Success Factors so that you focus attention on the largest areas of opportunity.


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Stage Summary: Document Your Business StrategyYou should now have a set of descriptions of your organization that can be used to compare with your IT strategy in order to promote alignment. In a few PowerPoint slides, you should be able to tell an audience where your company comes from, what its primary objectives are, and how it fi ts in the market in which it competes. This is foundational information for building strategy.


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. 3Hardware and Software Inventory 3Analysis of IT Trends 3Review of IT Against Governance Maturity Model 4IT SWOT Analysis 4List of Proposed Future IT Directions 4List of Requirements for Resolving Gaps (Roadmap) 5Corporate IT Vision Statement 6Corporate IT Governance Charter 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Background > Analyzing Business StrategyIn order to proceed with IT Strategy development, you must start by building your understanding of your business and its strategy. Complete alignment between your business strategy and IT strategy is the most important determinant of success.

If your organization is in the process of developing a strategic plan, now is the perfect time to pitch the idea of concurrently developing an IT plan. Ideally, IT strategy and business strategy should be developed in a parallel process. If this is not possible, use documented existing business strategy as the basis for your IT strategy.

Throughout this methodology you will refer back to the goals and strategic objectives of the business and ask how IT initiatives reinforce and support these objectives.

This background section contains many common business strategy theories that will help give you a more complete understanding of the analysis and frameworks which are commonly applied to determine business strategy. This information will be particularly helpful if you do not have a background in management theory.

It is not enough to simply know what your organization’s strategy is. To effectively develop an IT strategy you not only need to completely understand the strategy, you must appreciate why your organization’s strategy is set the way it is.

A Company’s Value ChainA value chain is a “string” of processes within a company that interrelate and work together to meet market demands. By examining the value chain, one can uncover how an organization has developed (or not developed) competitive advantage.

The following chart developed by Michael Porter shows the value chain found in a typical company.



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The various parts of the company’s business processes (inbound logistics, marketing and sales, and so on) each contribute different amounts of value to the company. Strategic analysis determines which of the activities are most important (i.e. contribute the most value) from the customer’s perspective, and determines ways to increase that value.

Maximizing Margin

The goal of a well-functioning value chain is to maximize margin. Margin is essentially a ratio of the operating income to the sales revenue – the bigger the margin, the higher the profi t. Obviously, maximizing margin is an objective of most businesses. How can a company achieve this?

There are two main ways to improve margins: decreasing unit costs, and increasing unit revenue.

1. Decreasing Unit Costs: This is reducing the costs of providing the same amount of value to customers. Examples include:

• Savings on raw materials

• Productivity improvements

• Overhead reduction

2. Increasing Unit Revenue: This usually involves improving the real and perceived value to the customer, leading to higher prices. Examples include:

• Branding

• Quality and innovation

• Effective targeting

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The Supply ChainA supply chain is a process that consists of materials, information, and fi nances as they move from supplier, to manufacturer, to wholesaler, to retailer, to consumer.

The average fi rm spends twice as much on its supply chain as the best fi rm, showing how important the supply chain is to company performance.

Considering the critical strategic role of the supply chain, nearly 50% of companies do not have good information about their supply chains. This is even more astounding given the power of information sharing that the Internet and similar technologies allow.



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Untangling Your Supply Chain

Companies that have the best supply chain performance follow six principles:

1. Straighten out the strategy fi rst. Too many companies see salvation in technology. One study says three of the four drivers of supply chain excellence are not related to technology but to alignment of the organization and to performance measurement. Defer IT spending decisions until key strategy elements are in place.

2. Enlist the A players. The supply chain leaders hire the very best strategists – the best purchasing experts, the best logistics pros – and get them to work together under a top executive whose mandate is supply chain excellence.

3. Align the incentives correctly. People do what they’re paid to do. Tie incentives to the big goals: as you would hook transportation managers’ pay to on-time performance and tracking costs, tie supply chain executives’ pay to return on assets (ROA) and vendor metrics. Reward cross-functional collaboration as well.

4. Replace rules of thumb with metrics. If you don’t measure, you can’t improve. Get the data on everything from vendor delivery performance to forecast accuracy, and then determine which metrics matter most. Measure the “what ifs” and track your entire supply chain, not just what happens inside your business.

5. Work beyond your four walls. Practice enlightened self-interest – share forecast and other data with suppliers, and demand the same of your customers. “Organized interdependence” is the goal. To reach it, offer trust, ask for reciprocity and work to improve your communications channel.

6. Avoid “one size fi ts all” solutions. Excellent supply chain management means juggling multiple supply chains simultaneously. Top performers differentiate by product, by channel, and by customer.

Industry LifecyclesAnalyzing where your organization and industry is in terms of its lifecycle is another way to understand management’s attitude towards IT planning initiatives. Find below two charts popularized by Geoffrey Moore. Most of the time, these charts are used to explain the strategies of companies bringing new products to market, but they are just as powerful in terms of understanding when and why companies spend money on IT planning and governance.

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There is no formula to determine what stage your organization is in. In fact, different divisions or products may be at different stages in the lifecycle. Nonetheless, spend a couple of minutes thinking about where your organization is in its lifecycle. This will help you later when you are prioritizing your projects.

If you operate in a slow-moving industry with little prospect for growth, spending a lot of money on untested technology may not be a sound business decision. On the other hand, an organization in a young and rapidly developing industry may want to take the risk on untested technology with the potential payoff coming in the form of exponential growth.



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Porter’s Five Forces ModelThe following diagram shows Michael Porter’s famous strategy model that describes the fi ve forces of competition that affect a company and an industry.

The essential elements in Porter’s Five Forces model are:

1. Industry Rivalry. Rivalry is intensifi ed by factors such as a high number of competitors, slow market growth, high fi xed costs, high storage costs, low switching costs, low levels of product differentiation, and high exit barriers.

2. The Threat of New Entrants. This threat is mitigated by barriers to entry such as governmental regulation, patents, requirement of highly specialized technology/equipment to make a product, and economies of scale.

3. The Threat of Substitutes. This usually impacts an industry through price competition i.e. the number of suitable alternatives available at a competitive price.

4. The Power of Suppliers. The power of suppliers increases if they can threaten to buy the purchaser, are concentrated, there exists a signifi cant cost to switch suppliers, or customers are powerful. Suppliers are weakened if there are many competitive suppliers, they offer commodity products, the purchaser could buy the supplier, and customers are weak.

5. The Power of Customers. The power of customers increases if there are few buyers with signifi cant market share or if they can threaten to buy the producing fi rm or rival (backward integration). The power of customers decreases if buyers are fragmented, buyers are highly dependent on producer for their output, or there are high switching costs.

Applying this framework lets you understand the market forces that can impact your organization. In essence, this model ties everything together – it, along with a PEST analysis, allows leaders to fully understand all the market forces that can impact their organization.

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Environmental Analysis (PEST)The Environmental Analysis asks what external forces infl uence the company. A PEST Analysis is commonly used to determine what these external factors could be. External factors can be categorized in four ways:

1. Political

2. Economic

3. Social

4. Technological

Political: The political environment is important in certain situations where there are legal issues with the company’s products (e.g. tobacco) or disputes between jurisdictions (Canada/U.S. lumber or U.S./Japan automobiles).

Economic: Economics can play an important role if the company’s product is highly cyclical (e.g. housing, base metals) or if the company is impacted by changes in the general economic environment (e.g. retail).

Social: Social trends can be positive or negative.

Technological: Technology also impacts companies and industries because of the new possibilities it creates. Certain industries (e.g. music) can be suddenly impacted by new technologies and related business models (e.g. KaZaA).

Identify Your Organization’s Core CompetenciesSuccessful managers identify and understand their organization’s core competencies and take appropriate actions relating to them.

A core competency is a business function, process, or other discipline that provides signifi cant competitive advantage for the organization that has it. Core competencies are a subset of all business functions an organization has (e.g. sales, manufacturing, purchasing, recruiting). Since an organization can’t do all things equally well, the core competencies are the major source of differentiation in the marketplace that creates most of an organization’s profi t.



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Examples of Core Competencies

Core competencies can exist in any functional area. For example, SAP is especially effective at writing enterprise software. Dell also has a core competency in manufacturing PCs.

Companies’ core competencies do not extend to everything the organization does. For example, SAP is not the world’s best operating system or database software writer. In their case, it doesn’t really matter because they can partner with Microsoft or Oracle to make sure their enterprise software runs on their platforms.

Similarly, Dell is not effective at research and development. They have a signifi cantly smaller R&D budget than Hewlett-Packard or IBM and don’t produce any leading-edge products. However, their effi cient, low-inventory manufacturing and supply chain systems don’t require lots of research and development – they can charge low prices and react very quickly to changes in customer demand, which gives them more of a competitive advantage than having the latest products.

Implications of Core Competencies

There are three major strategies you can pursue after identifying core competencies:

• Invest more resources in them. For example, you can increase your budget or increase the number of people working in those core competencies. In the IT department, you should also invest more in supporting these core competencies (e.g. investing in the latest CAD workstations if engineering is your core competency).

• Apply them to other related industries and opportunities. For example, if marketing is your core competency, you can market new products that you don’t today.

• Monitor changes in core competencies over time. Gradually, core competency areas become less and less of a competitive advantage. New areas must be developed into core competencies. The change in core competencies has major implications for which projects and departments IT should support.

Identifying Core Competencies

ü Look where the largest portion of fi nancial and other resources go. This may be your core competency. However, certain industries have most of their costs in one major category that is not a core competency (e.g. airlines spend most of their funds on airplanes and fuel, but don’t achieve competitive advantage from these purchases).

ü Ask customers why they buy from you.If you have signifi cant advantages that customers see every day (as opposed to process advantages they don’t really see), customers should be immediately able to tell you what they think your core competencies are (e.g. cutting-edge products, low price, great customer service).

ü Ask senior management. Core competencies are usually part of the strategic plan, which the executive team is responsible for.

ü Review your performance appraisal system for core competency measurements and requirements. Ideally, your performance appraisal system should be in sync with your organization’s overall core competencies.

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For example, IBM used to have a signifi cant core competency with manufacturing mainframes and other hardware. However, other companies have developed similar competencies and eroded IBM’s competitive advantage. Today, IBM is selling off parts of their hardware business and focusing on developing new core competencies in software and services. This has major implications for what functions their IT department will support and how much support they will provide.

Key Success FactorsKey Success Factors are the most important parts of the strategy or conditions that may exist in the marketplace or your organization without which your strategy would fail. Since conditions change, the Key Success Factors must be identifi ed and monitored in case conditions change.

Key Success Factor Example: General Motors

General Motors has large investments and fi xed costs in its manufacturing plants. Because these large fi xed costs are relatively constant, GM’s profi tability is heavily infl uenced by the number of units it can sell. Therefore, one Key Success Factor is sales and marketing capability.

Similarly, controlling overhead costs is very important. If there were a sudden increase in overhead costs, GM would have to sell many more cars or increase the price per car to make money. Therefore, controlling overhead costs is another Key Success Factor.

GM has several alternatives of how to structure the compensation package for its sales force. Total sales revenue or total revenue of new products are two possibilities, but if a Key Success Factor is the number of units produced by the factory, another possibility is to compensate the sales force based on factory utilization or the number of units shipped. Note that this can cause problems (e.g. selling cars below cost to increase factory utilization metrics), so you should identify them and come up with ways of dealing with these problems during the process of structuring compensation packages and not afterwards.

General Motors would need some specifi c fi nancial information about the two Key Success Factors it has previously identifi ed: increasing sales units and reducing overhead costs. For the sales units metric, GM would need to know how much extra capacity manufacturing plants had, and how much unit contribution GM made on each unit sold. For the overhead cost Key Success Factor, GM would need to know the total amount of overhead spending.

If GM had an extra 100,000 units of capacity, and the average contribution per unit sold was $5,000, the total opportunity from increasing units sold would be $500 million.



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Stage 3> Assess the Current IT Situation A balanced Strategic IT Plan must integrate both with your business strategy and with your IT infrastructure. In Stage 2 you were asked to map the particulars of your organization’s Business Strategy. In this stage you will map and analyze the characteristics of the Information Technology Infrastructure of your organization.

A strategic IT plan has to integrate with your functional IT plans and infrastructure (See Background). You can’t manage what you don’t know you have. By documenting your current IT situation, you will be able to recognize key areas of opportunity. Understanding your current IT situation is achieved by looking at three key areas:

• Organizational infrastructure

• Hardware and software infrastructure

• Current IT projects

Documenting and analyzing each of these areas will provide you with a clear picture of where you are currently sitting. Only by understanding your current position can you begin to develop a strategy for the future.

Step 1 – Document Your IT Organizational Infrastructure

Prepare an organizational chart of your IT department. This should include functional areas like network support, programmers, and business analysts.

Step 2 – Document Your Hardware and Software Infrastructure

Identify and document your physical infrastructure. Without a fi rm understanding of your existing technology assets, you are essentially operating in the dark and strategic planning will be a futile effort.


Stage

3Optimizing IT Infrastructure

Info-Tech’s “Optimizing Your IT Department” consulting methodology provides a detailed, step-by-step, process for analyzing all facets of your IT infrastructure – IT architecture, procedures and processes, and human resources – and for developing an optimization plan.

This product will provide you with the tools and processes to develop a comprehensive and effective IT Infrastructure Plan that will optimize IT in your organization to best serve both the functional needs of business units and the strategic IT objectives of your organization.

It is strongly recommended that you complete this methodology concurrently with Strategic IT Planning and Governance.


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Step 3 – Audit Current IT Projects

Understanding the current workload and spending patterns is essential to planning for the future. Defi ning the projects currently being worked on by the IT department will help you understand whether IT is aligned with the overall goals of your business.

Step 4 – Understand the IT Environment

Analyze the trends in your industry and the actions of your competitors. Look at industry trends and create competitor profi les.

In This Stage

Stage 3> Assess the Current IT Situation ....................................................... 59

Step 1 – Document Your IT Organizational Infrastructure....................... 62

Step 2 – Document Your Hardware and Software Infrastructure ............ 63

Step 3 – Audit Current IT Projects........................................................... 64

Step 4 – Conduct an IT SWOT Analysis ................................................. 66

Stage Summary....................................................................................... 68

Background > Mapping IT Assets.................................................................. 69

Thoughts on Staffi ng Needs .................................................................... 69

Skills Development .................................................................................. 70

Business Benefi ts of Asset Management ................................................ 70

Rolling Out an Asset Management Initiative............................................ 71

Conducting a Hardware Asset Inventory ................................................. 73

Conducting a Software Asset Inventory .................................................. 75

Change Management .............................................................................. 76

Asset Management Best Practices.......................................................... 78

Understand the IT Environment............................................................... 79

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Workbook

Stage 3> Assess the Current IT Situation ....................................................... 60

3.1 Organizational Chart.......................................................................... 62

3.2 IT Irregulars ....................................................................................... 63

3.3 Skills Mapping Tool............................................................................ 65

3.4 Network Diagram Primer ................................................................... 67

3.5 Vendor Contact Information............................................................... 69

3.6 Software Inventory............................................................................. 71

3.7 Hardware Inventory ........................................................................... 75

3.8 IT Expenditures Analysis ................................................................... 84

3.9 Current IT Projects ............................................................................ 87

3.10 Project Scope Statement................................................................. 88

3.11 Industry Trends ................................................................................ 90

3.12 Competitor Profi les .......................................................................... 92

Agility Tips

You have to know where you are to chart where you are going. A basic audit of current infrastructure, including talent infrastructure, should be a part of any major initiative, from departmental optimization to disaster planning. You should have a lot of this information already. If you don’t, perhaps you have more pressing management issues to deal with before strategic level planning. Don’t forget to form relationships with your “IT irregulars”. Find out what is going on outside of formal IT.



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Step 1 – Document Your IT Organizational Infrastructure Step 1 – Document Your IT Organizational Infrastructure Step 1 – Document Your IT Organizational

Objectives:

• Create a map of who does what in your IT department.

• Document IT service providers and key IT vendors.

• Document IT resources (power users, user groups, IT professionals in other departments) that exist outside of the IT department.

What You Need To Doü Prepare an organizational chart of your IT department. Use the tool “3.1

Organizational Chart.” This PowerPoint template will help you create a chart that includes the number of people in your department, each employee’s responsibilities, and the volume of activity by task.

ü Record individuals outside of the IT department who formally or informally provide IT services (Such as power users and IT support personnel within other departments). Use the worksheet “3.2 IT Irregulars” to record names and contact information for this important internal IT resource.

ü Use “3.3 Skills Mapping Tool” to develop a map of the skills in your IT department. This will help you understand, beyond a simple head count, where your organizational IT skills lie.

Prepare an organizational chart of your IT department similar to the example below. This should include functional areas like network support, programmers, business analysts, and so on. Also include the following information:

• Number of people in your department.

• Each employee’s responsibilities.

• Volume of activity by task (e.g. password reset, desktop recoveries, viruses, new application installation).

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Step 2 – Document Your Hardware and Software Infrastructure

Objectives:

• Create a detailed view of all physical IT assets.

• Audit all enterprise software.

• Document vendor and service provider contact information.

What You Need To Doü Create/acquire a network diagram. For each component that is identifi ed in the

diagram, provide the following information: component’s name, manufacturer and model number, operating system, IP address. See “3.4 Network Diagram Primer” for more.

ü Create a directory of all vendor account numbers, contact information, service and agreements. Use the worksheet “3.5 Vendor Contact Information” to gather this information.

ü Create a software inventory. Use the worksheet “3.6 Software Inventory” to create a document that includes license information, software packages, vendor information, vendor contact, and training and service level agreements.

ü Conduct a complete hardware inventory. Using the worksheets in “3.7 Hardware Inventory” to list each server, hub, switch, router, fi rewall, and desktop.

Without a fi rm understanding of your existing technology assets, you are essentially operating in the dark and strategic planning will be a futile effort.

Managing your IT portfolio in a current networked computing environment requires more than simply conducting a physical inventory. While the concept of asset management is familiar to most decision makers, its implementation has largely been sporadic and half-hearted. For example:



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• Many organizations send out hardware and software inventory surveys, but much of the information is incomplete and inconsistent.

• Even if usable data is collected, it is often rendered unusable because it is stored in separate formats across a variety of spreadsheet and database programs.

• More often than not, these stabs at asset management happen on a departmental level. No enterprise-wide picture emerges upon which key strategic decisions can be made.

Asset management, if implemented correctly, can become an important decision-making tool in any organization. For more information and advice on asset management, refer to the background section of this stage.

Agility Tip: Have You Been Here Before?

The kind of basic audit information required for this section may well already be on hand. For example, you may do regular audits for asset management or have reviewed your infrastructure for a Disaster Recovery Plan.

Don’t reinvent the wheel. If you have recently gathered infrastructure data, copy it into your workbook.

Step 3 – Audit Current IT Projects

Objectives:

• Develop a snapshot picture of current IT expenditures.

• Create a consolidated record of all current IT projects.

What You Need To Doü Analyze current IT expenditures. Use the worksheet “3.8 IT Expenditures Analysis” to

record the current profi le of expenditures in your IT department. The worksheet includes seven questions you can ask in analyzing current expenditures.

ü Document your IT projects. Use the worksheet “3.9 Current IT Projects” to list current major IT projects. Use the template “3.10 Project Scope Statement” to create a project description for each major IT project currently underway.

Understanding your department’s current workload and spending patterns is essential to planning your upcoming year. This section focuses on identifying where your department spends its money and what projects are currently on your plate.

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Where does your IT department spend its budget? If you have just completed a year-end, use last year’s fi gures to complete this section. Alternatively, if you are part of the way through your current fi scal year, your budgeted fi gures may provide you with a more accurate picture. Use your judgment, but remember that the more realistic you make your numbers, the more accurate your strategic plan will be.

Include spending in the following categories:

• Labor • Telecommunication

• Outside services • Repairs

• Hardware • Leases

• Software • Training

• Other

Break down this information further in the following ways:

• Capital assets versus expenses

• Growth rate over time

• Percent of total IT budget

• Percent of organization sales

Clearly defi ning the projects currently being worked on by your department will help you understand whether the IT department is aligned with the overall goals of your business. Be ruthless in your analysis of current projects and expenditures. If projects or expenses do not match the goals of the organization, be prepared to take action.

Agility Tip: Project Discipline is Key

The Project Scope Statement will help you provide further detail on each major project. The better your project information, the better you will be able to make strategic decisions about projects.

Info-Tech offers a comprehensive consulting methodology, Effective Project Management: Tools, Templates and Best Practices to help you get your projects into shape.



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Step 4: Understand the IT Environment Objective:

• Create a view of where IT is going in your industry by looking at publicly available IT news information as well as at your competitors.

What You Need To Doü Identify Important Industry Trends. Industry trends are changes happening in the

marketplace of technology. Meet with your IT department as well as your steering committee. Use “3.11 Industry Trends” to work up a list of technology trends that could impact your company’s competitiveness.

ü Develop Competitor Profi les. Use the worksheet “3.12 Competitor Profi les” to profi le a selection of main competitors. Understanding how your competition is using technology to gain a competitive advantage will provide you with a point of reference against which you can benchmark your company’s performance.

Looking at what is happening in your industry and with your competitors provides you with one of the best ways to benchmark your company’s performance. For example, you may be using technology that is becoming obsolete, or are just starting to use a new technology that none of your competitors are using.

This can be one of the toughest parts of your job. If your company is like most, the CEO and other senior management expect you to have an opinion on, or knowledge of, everything related to technology. However, the pace of technological change suggests that much of what you knew two years ago is obsolete.

Take this opportunity to do an intensive survey of industry trends and the actions of your competitors. Getting a solid understanding of the current environment will make the task of keeping up-to-date easier in the long run.

Industry Trends

Staying abreast of industry trends is an on-going process. Schedule some time into your week to keep your knowledge base current and relevant. Here are some additional tips to help you and your department to keep up-to-date:

1. Use a diverse set of information sources. On a weekly basis, you should at least be at least be at leastreading publications focused on technology, business, and general news.

Info-Tech Advisor and McLean Report

Clients of Info-Tech Research Group have ready access to two excellent tools for tracking technology and business trends.

Info-Tech Advisor provides on-going research into IT department management practice as well as the practical implications of technology trends.

McLean Report provides more high-level advice on the management and strategic use of technology in the enterprise.

Both products are based on extensive scanning of the business and IT management environment.

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2. Make environmental scanning a requirement for everybody in your department.Assign each person a specifi c publication or topic area. Make “keeping up-to-date” part of their performance evaluations.

3. Create an “Ideas and Opportunities” living document. Put the document into a shared folder and make it a requirement that everybody in your department add at least one idea to the document per week. Ideas from this document will become some of your department’s future projects.

Competitor Profi les

Here are some types of information you should know about your competitors.

Number of IT staff. Applications being used.Status of PC environment. IT spending.Functionality offered to customers (e.g. direct payment, online ordering).

Internal technologies used (e.g. instant messaging, video conferencing).

Enterprise systems (ERP, CRM).

Here are some ways of learning this information:

Your employees who used to work for them. Magazines and other public sources of information.

Competitors’ Web sites. Vendors.Customers. Consultants.

Sort the information into fi les on your biggest competitors and update the fi les as you learn new information. Conducting a periodic review of the fi les will provide you with better industry trend data than you will fi nd anywhere else.

Agility Tips: They Who Know the Competition

Talk to your sales and marketing people about the competition. Though it’s a diffi cult topic to broach, ask about lost sales. How have we been beaten in the past? Is there something the competition is doing better than we are? How is technology aiding them? How have we used technology to get ahead of them in the past?



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Stage Summary: Assess the Current IT SituationThe IT audit sets a starting point against which you can analyze the gaps between what is and what should be. In the next stage of this methodology, you will set your sites on an ideal IT situation, one that will help the enterprise achieve its strategic goals.


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model 4IT SWOT Analysis 4List of Proposed Future IT Directions 4List of Requirements for Resolving Gaps (Roadmap) 5Corporate IT Vision Statement 6Corporate IT Governance Charter 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Background > Mapping IT Assets In an ideal situation, your organization will have developed (or will concurrently be developing) a business strategy. If no business strategy exists, you are at a disadvantage for creating an Information Technology Strategy. Similarly, without a fi rm grasp of your current IT infrastructure you will also be at a disadvantage for developing an IT strategy.

A strategic IT plan and an IT infrastructure plan are not the same thing though they relate to each other on a very fundamental level. Consider the four quadrant IT/Business alignment model discussed in the introduction to this methodology. This model calls for your Information Technology Strategy to align on a horizontal axis with your business strategy, but also on a vertical axis with your Information Technology Infrastructure.

In the Background section to Stage 2 we provided some additional information on business analysis so that you can more fully understand the process of business strategic planning. In this section we offer additional information on Information Technology Infrastructure analysis. This section is not a substitute for a full Infrastructure Planning tool, however, it will give you added insights into technology for infrastructure planning.

Thoughts on Staffi ng NeedsTheories abound on how to organize an IT department, including:

• Organizing around the services to be provided such that business needs are adequately refl ected.

• Organizing around work roles so that people are easier to replace when they leave.

• Organizing around a complete team with a broad skill set to fl exibly meet a variety of specifi c missions as they arise.

Each of these methods has its strengths and weaknesses. For example:

• Organizing around services ensures that business needs are being met, but if needs change rapidly; you could be left stumbling to fi ll the holes.

• Organizing around work roles offers a simple “cookie cutter” approach, but what if you can’t fi nd a replacement worker fast enough? In this case, you could be left with a large staffi ng gap with no one to do the requisite work.



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The approach you choose will depend on the pace of your industry and your organization’s position within that industry. Fast moving organizations need to maximize fl exibility, which could lead to more extensive utilization of contractors and other outsourced services.

Skills DevelopmentSpecifi c jobs require different skill sets, ranging from technical, to business and management, to personal and interpersonal skills. Degrees of technical versus management skills, for example, will manifest differently at junior versus senior levels.

Beyond generic job type skills and duties, you must consider other factors that relate to your specifi c organization, such as industry affi liation and the specifi c technologies and tools your organization employs.

Use these tips to help you create and maintain an effi cient and responsive IT staff:

• Create a Skills Map: Almost 60% of skills required by IT workers are general business skills, not IT-specifi c skills. Build a skills map that outlines those skills required by: all workers, IT workers, specialized IT workers, and those at your specifi c organization.

• Look for Skills Upgrade Candidates: Staffers with a high-demand, ready-to-go skill set are expensive and hard to fi nd. This can really hamper your skills acquisition process. Workers with low-demand IT skills can be hired and “reskilled” to do what you need faster and at a lower cost.

• Avoid Niche Products: Niche technologies (e.g. Forte), or mainstream technologies in a niche combination (e.g. COM on Tandem), demand a big training investment in highly specialized skills that aren’t portable across other technologies. When that technology fades away, so can employee value.

• Minimize Training in ‘Subsumable’ Skills: Do you want to invest heavily in training for grassroots XML coding, or future XML design tools? Think ahead – invest in skills that will last and outsource the skills “du jour.”

• Train Small Groups: Don’t train your entire development team on a new technology. Training small groups of specialists is faster and easier, and allows trainees to do a specifi c job better. As skills become undesirable over time, you have fewer staff to retrain.

Business Benefi ts of Asset Management Any business, large or small, can signifi cantly reduce costs and engage in better decision making by actively practicing asset management.

• According to Gartner Group, properly implemented asset management can save an organization 20 to 40% per seat per year in IT costs. For a typical enterprise with 2,500 PCs, this could translate into $900,000 in savings over 12 months.

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• Gartner Group has also found that the average lifecycle cost for a given asset can be reduced by 37.5% overall by using asset management.

• International Data Corporation discovered savings of 13% per year on PC staffi ng costs alone due to asset management initiatives.

The benefi cial applications of asset management are myriad. Listed in the table below are the primary business “selling points” of diligent asset management:

Financial Benefi ts Effi ciency and Productivity Benefi tsPerform accurate budgeting and forecasting of hardware and software expenses.

Help ready the organization for organization-wide migrations, installations and upgrades.

Calculate total cost of ownership (TCO) or average price per equipment type.

Accommodate rapid technology changes and deploy new applications more quickly.

Uncover vendor accounting and invoicing errors.

Anticipate and plan moves, personnel transfers, and organization restructuring.

Negotiate better hardware purchasing and software licensing agreements.

Give end users access to the right applications when they need them.

Cancel costly maintenance renewals for unused software.

Remove end-user access to “time-wasting” applications.

Identify correct amount of insurance coverage required through correct asset value estimation.

Identify potential incompatibilities between components prior to purchase.

Avoid duplication in product purchases or double-coverage in contracts.

Ready the organization to absorb mergers and acquisitions more easily.

Discover and remove dormant assets. Make the helpdesk more productive by giving them access to each desktop’s inventory.

Assure the organization of software license compliance, helping to avoid fi nes, minimize business disruptions, and reduce piracy.

Create at-hand information for IT budgeting and planning.

Determine departmental charge-back billing. Move to standardized hardware and software purchasing, allowing for eased support and volume discounts.

Deter theft of components by deploying entirely traceable equipment.

Rolling Out an Asset Management Initiative Given that comprehensive asset management is enterprise-wide in nature, creating an effective program is a sizeable undertaking. Follow this 15-point checklist to help you get your plan underway:



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1. Plan for a Staged Rollout: Ideally, an asset management initiative should be rolled out in small steps. Start with something you know you can solve, such as a single project that addresses a pre-existing asset category like tracking machines under lease or inventorying a single department. Once you have ironed out the initial process glitches and demonstrated positive results, subsequent projects should be easier.

2. Identify Affected Parties: Understand all of the constituencies that will be affected by the asset management initiative. These include all of the departments that you expect to comply with new policies and from whom you will be collecting data. You need to understand the business that the IT department serves and the different units’ goals and objectives in order to effectively sell the asset management concept.

3. Build Your Team: Form an asset management team made up of representatives from the affected constituencies. This step is critical in order to uncover potential resistance and to ensure end-user compliance. These individuals may also be aware of local attempts at asset inventorying that you don’t know about.

4. Check Current and Historical Initiatives: Find out what asset data has already been gathered, for what purpose, and how it is being maintained. By knowing your organization’s current state, you can begin to identify areas of greatest need and plan your target goals.

5. Understand Existing Policies and Procedures: This includes any hardware and software purchasing policies, IT move/add/change request policies, and so on. One of the goals of asset management is to create standardized practices. Finding out what these policies currently demand, if anything, will give you a good indication of how much work you will have to do.

6. Gather Records: Find all technical, fi nancial, and legal records for all IT assets. Apart from your own department, the purchasing department is a good place to check. You will need to compare these records against your actual inventory to identify gaps.

7. Pick Your Rollout Structure: Decide on a structured plan of attack. Are you going to collect by department and roll into a centralized database, or perhaps tie inventory to directory services? It’s up to you, but do decide early.

8. Decide Whether or Not to Outsource: Given budgetary and personnel constraints, outsourcing your asset management may be a wise choice. Look for a provider that offers extra services like infrastructure design and planning, selection and deployment of tools, software migration planning, and software license management in addition to basic inventory services.

9. Organize Manual Asset Tagging: All current and incoming assets should be physically tagged with unique asset tags, preferably permanent metal tags. This information must

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be recorded. Create and enforce a mandatory asset tagging policy.

10. Set a Schedule: Plan a schedule for regular automated inventory scans, database merging, and reporting. Also set up a schedule to run manual checks on non-networked devices that may be unscannable by automated tools.

11. Assign Ownership: To make sure that this initiative is converted into an on-going process, someone needs to be assigned responsibility. In fact, IT may have to take on responsibilities previously held by others to ensure an integrated process. This may include purchasing, depreciation, budgeting, rebilling of expenses, contract management, and checking of supplier invoices. This is a big responsibility, so make sure the chain of command is well established.

12. Pick Automated Tools: Gartner claims that asset management is 60% technology and only 40% methodology. If you have more than 200 desktops, an automated asset management solution is a must have.

13. Plan for Agent Installation: When buying an automated tool, you will have to install agent software on each device. This is a one-time-only-per-device operation, but may require some time. You may be able to automate this process using login scripts or a software distribution program. Incorporate agent installation into all new and upgrade machine builds.

14. Set Up a Baseline: Before using your new software, do a physical count of roughly 5% of your current IT systems. This will represent a baseline against which you can test the accuracy of the asset management product you bought. Next, use your new automated system solution to scan the same machines and compare accuracy.

15. Plan Regular Checks: Perform regular asset scans not only to ensure your asset inventory is up-to-date, but also to ensure that your asset management software is registering newer device specifi cations.

Combined with rigorous enforcement and follow-up, these 15 tips should place you in good stead for deploying a successful asset management initiative.

Conducting a Hardware Asset Inventory A hardware asset inventory is a listing of all IT hardware in an organization, including client computers, servers, add-in cards, peripherals, and network devices. This information is critical for technical planning and support as well as fi nancial management.

One of the major early benefi ts of conducting a hardware asset inventory is the discovery of dormant or excessive assets. Such assets are fi nancially wasteful on many fronts, including cost of storage and lack of revenue-generating use. Consider these statistics from Micropath:



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• The average corporation has about 20% more workstations than they originally thought.

• The percentage of out-of-service IT equipment – desktops, laptops, servers, monitors, printers, modems, etc. – runs between 17% for medium-sized companies and over 27% for Fortune 1000 companies.

Careful structuring of the information you wish to collect is an important fi rst step. You need to decide early on the level of detail you wish to achieve in your asset registry. Below is a comprehensive list of fi elds you may wish to include for each discrete component.

Identifi cation DataAssigned user/department Component make Component model

Physical location Unique asset identifi cation (serial number, asset tag number, bar code)

Administrative DataDate of acquisition Purchase order number Purchase/leasing price

Contract information (maintenance and support)

Lease terms (if any) Warranty information

Historical DataMove/add/change history Service history Usage history

Other installed hardware Installed software Associated peripherals

Many hardware asset inventories will be conducted at the PC or server level: that is, the components will be tied to and/or listed as part of an individual machine. As such, it is particularly important to itemize each individual component within the PC or server, including:

• Processor name, make, and model

• Installed RAM

• All peripherals (keyboard, mouse, monitor, and modem)

• Video card

• Network card

• Number, size, and type of disk drives

• Amount of remaining disk space

• Any other drives (CD, DVD, tape, and zip)

If a component, like the ones mentioned above, is a part of a larger system, it is a good practice to note which system the component is tied to using the larger system’s unique identifi er.

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Potential Problem Areas: Performing asset management on wireless and mobile devices is diffi cult given that they are highly portable, have rapid usage cycles, and are diffi cult to locate exactly. Polling a network to fi nd out where they are is often not an option. While including mobile and wireless devices in your asset management plans is important, put this project at the bottom of your to-do list. Start by mandating the use of specifi c products and only then plan to conduct a manual count down the road.

Conducting a Software Asset Inventory A software asset inventory is an up-to-date listing of detailed information about the client, network, and server software installed across your entire organization. The information you collect can be used to better manage license and support contracts, plan technology implementation, troubleshoot, and perform better fi nancial management.

Compared with hardware, software is something of an “invisible” asset; because it is less physical, it is much harder to track and much easier to misuse than its hardware counterpart.

• For example, the average organization spends 10 to 20% of their software investment on software updates and support services. Unbeknownst to them, however, most do not actually use a sizeable portion of these paid-for, yet superfl uous, assets.

As with conducting a hardware asset inventory, you need to decide which data fi elds you wish to populate. See the table below for key information to track in your software inventory.

Identifi cation Data Administrative Data Historical Data

Unique asset identifi cation (serial number, product number, license number)

Date of acquisition Support history

Application name Purchase order number Usage monitoring detailsApplication vendor Cost of license Move/add/change historyApplication version Cost of annual support and

update feesTraining history

Physical location License type, terms, and conditions (maintenance and support)

Consulting history

Assigned user/department License expiration date Workstation/server upon which software is installed

Warranty information



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Change Management Asset management isn’t a one-off project – it is an on-going process. As things change within an organization, asset volume and allocation changes as well. In order for your asset database to remain useful, it is essential that it remain refl ective of the actual state of affairs in your organization.

The change management aspect of asset management involves the recording of all installations, removals, and confi guration changes made to hardware and software. This is particularly useful between actual inventory audits that just present a snapshot of what you have at a specifi c period in time. The result for IT is the ability to engage in risk management by responding to organization expansions, employee changes, and technology advances.

If a hardware component is redeployed, make the following changes to the asset database:

• Location and/or staff to whom the hardware is assigned.

• If it is a peripheral, then change the workstation identifi cation to which the asset is allocated.

• If the hardware is placed in storage, then change the workstation record.

• If the hardware is slated for disposal, then fl ag the asset as removed in the database. If it is a workstation and has associated peripherals that are not being disposed, then delete the peripherals listed and redeploy them.

If software is added or removed, make the following changes to the asset database:

• If software is installed, then add a unique identifi er that ties it to the workstation or server upon which it is installed. Add an install date.

• If software is transferred between machines, then change the workstation identifi cation fi eld.

• If the software is permanently removed, fl ag it as deleted in the registry.

Engaging in rigorous change management practices is probably the most critical, yet hard to control, aspect of asset management. Managing change will necessarily involve the development, communication, and enforcement of enterprise-wide policies for it to be effective.

Example: Tracking Component Lifecycles

Let’s walk through the process of tracking a PC and an operating system license over the course of their respective lifecycles. (The data provided in this example is for demonstration purposes only and may not be accurate.)

Step 1 - Requisition: Enter the requisition information into the asset database. This can be a single-fi eld entry that lists the requisition date and number, who requested the purchase (by name and department), and a brief description and statement of anticipated use of the intended system. In essence, you are earmarking a place in the asset repository for your new acquisition.

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Step 2 - Procurement: When the asset arrives and before it is used, it is tagged with an asset tag and described in the asset database.

Step 3 - Deployment: Once a user for the asset is identifi ed, add the following information to the asset database.

PC Dell Optiplex Local Hard Drive EIDE S.M.A.R.T. II Ultra ATA/100 20 GB

User Emily Chesley Network DrivesLocation / Facility Finance Local PrinterMake Dell Network PrintersModel OptiPlex GX150Serial Number PC000762 NIC / IP Information 3Com Etherlink

123.456.789.01Operating System Windows 2000

ProfessionalVideo Card 16MB 4XAGP

NVidia TNT2 Pro (#HD444366)

Processor Type / Speed

Pentium III (1.2 GHz) Modem

RAM 160MB SDRAM CD ROM

Step 4 - Maintenance: The asset is subject to regular inventories, usage monitoring, updates, and support. When each of these events occurs, the following needs to be recorded in the asset database:

Hardware - PC Move/add/change history 07/07/01: Added 32MB RAM

15/03/01: Windows 2000 Professional (OS000578) added - no previous operating system

Service history 23/05/01: Jammed CD-ROM drive (technician deployed onsite)

Usage history Basic offi ce useSoftware - Operating SystemMove/add/change history 15/03/01: License transferred from PC PC000221 to

PC000762 - same userSupport history 27/09/00: OS crash - technician deployed onsite

14/06/01: Installation of Service Pack 2Usage monitoring details Launched 43 hours per week on average. No

weekend use.Training history End-User: Windows 2000 Professional Introduction

(2-hour seminar for all end users)IT Staff: Microsoft Course 2152 (taken by Jane Jones)

Consulting history None

If a hardware component or software license is moved to a different machine, changes must be recorded in at least two fi elds:



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• Details must be entered in the “move/add/change history” fi eld. Include activity dates in all history-related fi elds.

• The unique identifi er in the “workstation/server installed on” fi eld must be changed to that of the new workstation.

Step 5 - Retirement: Upon retirement of an asset, an accurate account of where it is, what it contains, and all changes it has undergone are already on record. At this time, decisions need to be made as to which hardware components can be reused, sold, or discarded, and which software licenses can be redeployed in the organization.

• If a component is to be discarded, fl ag that asset’s record in the registry as deleted. Ensure that changes are also made in the “installed components” and “associated peripherals” fi elds.

A calculation can also be made at this point about how much the system cost over its lifecycle. This is valuable in helping to identify potential cost-cutting areas as well as for planning future budgets and investments.

Asset Management Best Practices Like any management procedure, there is a collection of best practices associated with asset management. Apply the following to your initiative:

1. Beware of Culture Shock: Asset management will probably require a restructuring of how certain traditional processes, such as purchasing, are done. Some users and department heads may resent this or have trouble making the transition. Learning to comply with new asset management policies and procedures will likely require some training, so be prepared.

2. Ensure End-User Compliance: Behavior modifi cation may be in order to make your asset management plan achieve the desired benefi ts. Here are some examples of what you may need to communicate in terms of end-user participation:

• Ensure that remote machines are left turned on during the scanning period.

• Mandate that users notify IT prior to any changes that might affect inventory. This includes hires, terminations, moves, and strategic plans that involve IT assets. Employ e-mail or an asset change form on the intranet to facilitate this communication.

• If the number of available software licenses is tight, ask end users to schedule use for non-peak usage hours to avoid purchasing more.

• Get users to exit an application when they are not using it to ensure license availability and avoid over-purchasing. Some users will “horde” an app by launching it early and leaving it idle to ensure availability when needed.

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3. Enforce Standardization: META Group says standardization of hardware and software purchased for the desktop alone can reduce costs by up to $650 per seat per year. Standardization limits the number of products that helpdesk and IT staff need to learn to support, as well as allows greater leverage in purchasing volume discounts.

4. Automate Software Distribution: Deployment is a key stage in the lifecycle of an asset, and an excellent cost-saving opportunity. Automating software distribution is a simple, labor saving device that has a big impact on the bottom line by lowering the cost of managing IT assets.

5. Focus on Software Asset Management First: Potential cost-savings associated with well-managed software assets include overall reductions in license fees, update fees, and software support. Other areas of benefi t include system administration, and management time spent on budgeting, documenting, and fi guring charge backs. Because of these factors, software asset management has the fastest return on investment.

6. Perform Inventory Scans During Off Hours: Evenings and weekends are ideal times to perform automated scans since the tax on the system and associated bandwidth is reduced.

7. Communicate With Others: To get the most benefi t from asset management, the data gathered through this process must be made available to fi nancial, administrative, and technical planners, as well as system administrators and the helpdesk. Key data includes contract terms, hardware and software inventory, accounting, maintenance records, change history, support history, and other technical and fi nancial information. Decide the types of reports needed and who will get them.

8. Broadcast Your Results: Publicize the benefi cial results of your efforts. This will not only make you look like a cost-saving star, but it will also help change the minds of buy-in hold-outs.

Understanding the IT EnvironmentEnvironmental scanning is becoming a skill required of more and more IT managers. Understanding trends in your industry and the actions of your competitors has never been more important to the IT function.

Depending on your situation, you will want to adapt the information for which you are looking and you may want to broaden your scope to include trends and analysis not specifi cally related to technology, but which may impact you and your department’s role in the future.

Industry Trends

Keeping on top of all the trends that may affect your business and your technology decisions is a diffi cult task at best. This does not mean, however, that you do not have to scan the environment on an on-going basis.



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Recognizing the business ramifi cations of new technologies and trends should be the responsibility of company business executives. However, updating executives on new opportunities and potentials are your responsibilities.

Competitor Profi les

Understanding how your competition is using technology to gain a competitive advantage will provide you with a point of reference against which you can benchmark your department’s performance.

In some cases, every company in your industry may be using the same technology, but in others you may be able to gain competitive advantage by implementing systems that differentiate your company.

Knowing Your Competitors Pays Off

Organizations with a Strategic IT Plan were more familiar with the IT strategies of their nearest competitors than those without. Familiarity with competitors’ strategies is generally low, but use of a plan appears to drive some investigation of competitors’ IT strategies and departments.

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Stage 4> Propose a New IT SituationNow comes the fun part. Through the fi rst three stages of this methodology, you have focused on the past and present of your organization and its use of Information Technology. Now it is time for you, and your steering committee, to set your sights on the future.

To this point in the methodology you have gathered information on two important issues:

• Where You Are. By examining and documenting organizational infrastructure, current systems, and current projects you should now have a solid understanding of your current situation and an excellent starting point from which you can benchmark future endeavors.

• Where You Need To Be. By documenting your company’s strategic objectives, as well as its market and core competencies, you have begun to construct a picture of where your organization wants to go. Now you have to look at how IT can enable that successful future organization.

In this stage, you will begin the process of proposing a new IT situation. Be bold! Try not to worry too much about what can be done in the short term. This is your opportunity to look at the future and think about how IT can make a difference. The particulars of what can actually be accomplished short, medium, and long term will be addressed in the next stage.

Step 1 – Analyze IT Strengths and Weaknesses

Review your current IT situation asking tough questions about how performance, alignment, and goal setting. Compare your current governance practice (if you have any) to an industry maturity model. Conduct a analysis of current strengths, weaknesses, opportunities and threats (SWOT).

Step 2 – Brainstorm Technology Opportunities

Hold a brainstorming meeting (or meetings) involving your strategic planning group as well as IT staff, senior managers, line managers, power users, and special applications users. Formulate a set of key questions to get the mental wheels turning.


Stage

4

Do You Have Your Act Together?

Your information technology department has a critical role to play at this stage of strategic IT planning.

Your department will be expected to provide leadership in pitching new IT initiatives that can be tested against strategic priorities. The department can also be a valuable resource for evaluating and scoping out details for IT ideas provided by stakeholders in other departments.

While strategic IT planning goes beyond the borders of the IT department, you also don’t want to be in a position where your future is entirely dictated externally.


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Step 3 – Document Your Results

Document your fi nal recommendations for the future as approved by your planning group. Use diagrams and charts as much as possible and remember to continually relate your recommendations to the business goals of the enterprise.

In This Stage

Stage 4> Propose a New IT Situation .............................................................. 81

Step 1 – Analyze IT Strengths and Weaknesses .................................... 83

Step 2 – Brainstorm Technology Opportunities ....................................... 86

Step 3 – Document Your Results ............................................................ 88

Stage Summary....................................................................................... 90

Background > The Art of Brainstorming ........................................................ 91

Brainstorm of One (Brainwriting) ............................................................. 92

Workbook

Stage 4> Propose a New IT Situation .............................................................. 94

4.1 Questions to Focus Discussion ......................................................... 96

4.2 IT Governance Maturity Model .......................................................... 98

4.3 SWOT Analysis ............................................................................... 105

4.4 Future IT Options Questionnaire ..................................................... 114

4.5 Brainstorming Tool........................................................................... 121

4.6 Summary of Strategic Objectives .................................................... 124

4.7 Summary of Strategic Directions ..................................................... 125

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Agility Tip: Keep the Focus External

This is not a referendum on the effectiveness of the IT department. While the IT department will likely play the largest role in the IT SWOT analysis of the enterprise, don’t forget to address and analyze how IT is being used throughout the organization to advance the corporate goals you documented in Stage 2.

For example, if a particular department has forged a productive relationship with an external IT service provider, the strengths and weaknesses of that relationship should be considered as part of the IT SWOT analysis.

Step 1: Analyze Strengths And Weaknesses

Objectives:

• Review your current situation to identify specifi c issues of strategy and governance.

• Analyze the strengths, weaknesses, opportunities and threats of IT in your enterprise.

What You Need To Doü Distribute “4.1 Questions to Focus Discussion” to members of your steering

group. This document contains a set of questions that will help members of the group focus on key issues of strategy and IT governance. Encourage steering group members to share the questions with their constituents and gather their feedback.

ü Benchmark Current IT Management Practices Against “4.2 IT Governance Maturity Model”. Analyze your current level of IT Governance against this governance maturity model. This will help you map out what needs to happen in the short and long term to improve Strategic IT governance.

ü Conduct a directed SWOT analysis with members of your steering committee.Discuss everybody’s answers to “4.1 Questions to Focus Discussion” as well as “4.2 Governance Maturity Model”. Use the tool “4.3 SWOT Analysis” to further fl esh out the strengths, weaknesses, opportunities and threats faced by enterprise IT.

ü Analyze all IT initiatives. Be sure to consider the SWOT for all IT being used in the organization, not just that which is the responsibility of the IT department.

After amassing the information in Stage 3, you and your planning team may be amazed at the sheer volume of IT work being done. But strategic planning and governance is not about volume or even the quality of work being done. It is about making sure that the work being done is most effective toward the organization achieving its goals.

To get at the issue of effectiveness, begin by asking tough questions. The Board Brief on IT Governance, which is based on Control Objectives for Information and related Technology (COBIT), notes that asking the tough questions about IT is the necessary fi rst step in developing



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the outcome measures, best practices, key success factors and performance drivers of successful governance. Such questions would include the following:

To Uncover IT Issues

• How often do IT projects fail to deliver what they promised?

• Are end users satisfi ed with the quality of the IT service?

• Are suffi cient IT resources, infrastructure and competencies available to meet strategic objectives?

• What has been the average overrun of IT operational budgets? How often and how much do IT projects go over budget?

• How much of the IT effort goes to fi refi ghting rather than enabling business improvements?

To Find Out How Management Addresses the IT Issues

• How well are enterprise and IT objectives aligned?

• How is the value delivered by IT being measured?

• What strategic initiatives has executive management taken to manage IT’s criticality relative to maintenance and growth of the enterprise, and are they appropriate?

• Is the enterprise clear on its position relative to technology: pioneer, early adopter, follower or laggard? Is it clear on risk: risk-avoidance or risk-taking?

• Is there an up-to-date inventory of IT risks relevant to the enterprise? What has been done to address these risks?

A more extensive list is included in “4.1 Questions to Focus Discussion”. Before you tackle these questions, be sure to review both your corporate strategy (from Stage 2) and your current IT situation (from Stage 3). Distribute the questions to your planning group and make sure they respond. It is critical that a range of views be brought to the table. Best practices and measures will be discussed further in Stage 7: Build a Strategic Decision Making Framework.

The Governance Maturity Model

The introduction to the Strategic IT Planning and Governance methodology states that IT governance refers to formal high level processes and structures for IT strategic planning, prioritization, decision making and performance measurement.

Benchmarking your current situation against a maturity model will inform your discussion of strategic steps that you need to take, and strategic objectives that need to be set, to move toward best practices in IT Governance. “4.2 IT Governance Maturity Model” is based on the maturity model outlined in Control Objectives for Information and related Technology (COBIT). The model looks like this:

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This Strategic IT Planning and Governance methodology lays out the steps for moving to a Level 3 – Defi ned Process. These processes and structures form the basis for you to establish an ongoing strategic planning and governance practice. It is through an effective ongoing strategic practice that you can move to Level 4, and ultimately to Level 5.

Directed SWOT Analysis

A SWOT analysis is a simple and powerful way of analyzing an organization’s corporate capabilities. The temptation in completing this section is to pick some generic areas, or pick areas for political reasons. For example, stating, “the employees are Acme’s biggest strength” is an easy answer with which nobody will disagree, but which provides little insight into the reasons why Acme is actually successful.

Focus your analysis of strengths, weaknesses, opportunities and threats upon the key areas used in “4.1 Questions to Focus Discussion” these include:

• Governance and Accountability.

• IT/Business Alignment.

• IT Skill Sets and Performance.

• Process and Project Management.

• Budget Performance.

For every category, spend some time thinking critically about your choices and how you can work on them. Carefully consider the information you have gathered in the previous Stages of this methodology. Enter your strengths, weaknesses, opportunities, and threats for each of these categories in the “4.3 SWOT Analysis” tool.



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Step 2 – Brainstorm Technology Opportunities Objectives:

• Brainstorm various options for IT in the future of the organization.

• Involve the widest possible circle of stakeholders in the exercise.

What You Need To Doü Lay the ground rules and prepare for the future. Planning ahead and getting everybody

ready for the upcoming brainstorming meeting is key to having a successful outcome. Distribute “4.4 Future IT Options Questionnaire” in advance to those attending meetings.

ü Brainstorm within the IT department. Document ideas generated from the questionnaire. The goal in this meeting is to come up with as many different technology-related ideas as possible.

ü Hold brainstorming meetings with stakeholders. Distribute the same questionnaire as well as any of the ideas already on the table. Meeting attendees could include: senior management, middle management, power users, and specifi c application users. Use “4.5 Brainstorming Tool” to document ideas coming out of these meetings and the one within your department.

Are there potential opportunities to use technology to further the goals of the business? What can be done using technology to change your company and its processes, either incrementally or exponentially?

Some brainstorming sessions will help you to determine all of the ways that technology can deliver value to your company. Use the IT Options Questionnaire to get participants thinking of how IT might fi t into the company’s future.

Getting everyone involved in, and excited about, generating ideas for capitalizing on technology will give you the chance to shape the way your company thinks about the IT department.

Brainstorming Meetings

Your objective is to fi nd the best possible ways that technology can be used to help your company. To do this, you need to pull in a variety of people from your company. In the previous step, you decided who you wanted at your meeting and sent them a questionnaire to get them prepared.

At this point, we suggest having at least two meetings.

1. First, have a meeting with your own IT staff and go through the list of ideas they First, have a meeting with your own IT staff and go through the list of ideas they First, have a meeting with your own IT staffgenerated from the questionnaire. The goal in this meeting is to come up with as many different technology-related ideas as possible.

• Make your staff accountable for coming up with new ideas to help your company. Refer back to the “Ideas and Opportunities” document discussed in Step 4 of Stage 3.

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By having this meeting prior to your meeting with other departments and senior management, you can save time by presenting an initial list of possible ideas that your department can undertake.

2. Next, have a meeting (or meetings) with the broader community. Expect this meeting to take approximately two hours.

• Send out your compiled list of ideas well ahead of time, along with a meeting agenda. Stick to your timeline as much as possible.

• During the meeting, brainstorm the various options that were brought up by the questionnaire. Encourage discussion, debate, and even disagreement. Only by pushing the envelope will you come up with truly brilliant ideas.

• This is your opportunity to “blue sky” about ideas to reinvent the businessand change your industry. At this point don’t discount any ideas, regardless of size or scope. In other words, don’t say that any ideas “wouldn’t work” – consider every option.

• Focus on determining which options provide your company with the greatest business benefi t.

Before adjourning your meeting, make sure that you arrive at a list of options and potential avenues to follow. This list will be used to create the follow-up document discussed next.

Agility Tip: Controlling the Chaos

Brainstorming sessions are a great way to both generate new ideas and to push your own thinking outside of the box. However, without strong leadership, brainstorming sessions can get out of control and end up being counterproductive.

Be sure to read the background articles on brainstorming and “brainwriting” (in this Stage) for tips on sparking and leading effective brainstorms. Consider designating a third party to be moderator/secretary for your sessions, somebody with a methodical/procedural bent (shouldn’t be hard to fi nd somebody like that in IT).



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Step 3 – Document Your Results Objectives:

• Create a summary of project ideas from the brainstorming sessions.

• Include, where possible, cost estimates for making the ideas a reality.

What You Need To Doü Review all ideas with the IT department. Review the ideas that come out of the

various brainstorming meetings with specialists in your IT department. Estimate the cost of each idea if it were to become a formal project. (This includes outsourced IT projects.)

ü Follow-up and document. Hold a follow-up brainstorming meeting with your steering committee. Review results from all previous meetings and cement together a list of ideas into a document that outlines a roadmap of technology options for your company. Use “4.6 Summary of Strategic Objectives” to record and list objectives and core values. Use “4.7 Summary of Strategic Directions” to record and list all possible projects.

Use the “4.6 Summary of Strategic Objectives” form to list the overriding objectives of core values for IT that came out of both your SWOT analysis and your brainstorming sessions.

For example, if the consensus was that your IT infrastructure is well disposed to supporting open source development, and senior management is not averse to exploring this option from a cost savings point of view, one of your objectives may be to:

• “Move toward adopting proven open source tools and applications for all core technologies.”

On the other hand, your analysis and brainstorming could lead to an opposite set of objectives:

• “Seek industry standard commercial tools and applications for all core technologies.”

• “Continue to strengthen our relationship with key enterprise technology vendor Microsoft.”

The list of objectives you put together here will inform the Strategic Objectives and Core IT Values sections of the Strategic Plan which you will construct at the end of this Methodology.

Projects List

Your brainstorming sessions will also yield a wish list of specifi c projects ideas aimed at advancing the core strategies of the organization. For each proposed IT project, include the following information:

• Description of option.

• Benefi t to the business.

• Estimated costs (high, medium, low).

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• Estimated time to complete the option (number of months).

This list of ideas will be the basis for moving forward and ensuring that IT supports and enhances the needs of the business. Using this process to create a list of possible projects will also help when it comes time to implement because you will already have buy-in from key stakeholders.



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Stage Summary: Propose a New IT SituationThe results of this stage should be a “wish list” of projects that you and your planning group believe will impact the company’s competitive position. In the next stage you will measure the gap between the ideal situation (where IT projects are fully aligned with strategy) and the current situation (as outlined in Stage 2).


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model Done 4IT SWOT Analysis Done 4List of Proposed Future IT Directions Done 4List of Requirements for Resolving Gaps (Roadmap) 5Corporate IT Vision Statement 6Corporate IT Governance Charter 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Background > The Art of Brainstorming Brainstorming is a creative idea generating technique which results in a set of ideas from which we can choose, and it also forces us away from our everyday mode of thinking. Use this information to ensure that you make the most of your brainstorming endeavors.

Although there are different methods used to brainstorm ideas, group brainstorming is still considered an important activity to promote teamwork, socialization, and opportunity to build on the ideas of others. Use the following steps to ensure that you succeed at brainstorming with a group.

1. Schedule a Meeting: Everyone has a busy schedule so make sure that you book their time in advance. Invite those who will be open to share their ideas and ensure that you have coverage from all the required viewpoints. The ideal number of participants is 4-7 members.

2. Designate a Recorder: This individual will be kept very busy writing down the ideas that will be generated, and therefore should not be a participant in the actual brainstorming.

3. Discuss the Rules: There should be a defi ned code of conduct agreed to by all. For example, there should be no criticizing of ideas because being relaxed and thinking freely is the key. Quantity supersedes quality because it has been proven in history that the best ideas are generated when the highest numbers of ideas were being generated.

4. Delegate a Moderator: A moderator is responsible for keeping order and ensuring the discussion stays on topic and moves in a logical manner. For example, it is benefi cial to build on existing ideas before new ones are tackled. The moderator can also use the following techniques to facilitate the idea generating process.

• Pose an initial question that will encourage thought into what the brainstorming session should provide ideas about, or what you are attempting to solve. This presents a discussion starting point and it frames what the ideas/solutions are intended to resolve.

• Identify a challenge to get the discussion moving and also because people are usually programmed to respond when faced with a challenge.

• Utilize word association techniques to fi nd linkages between key words that will assist in idea generation.

5. Regulate Time: Sessions are not recommended to go any longer than 15-20 minutes



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without breaks. Do not confuse a lull in idea generation as the end of idea generation. You will fi nd that after people have had the opportunity to “relax their minds,” additional idea generation will recommence.

6. Make Copies: After the session has concluded, make copies of the ideas that were generated and distribute them before the next meeting. This allows for closer study and the ability to unearth further ideas for the next meeting.

7. Add and Evaluate: At the next scheduled meeting, add the new ideas and evaluate the ideas that exist. If you show no intention to use the generated ideas, then the member could become discouraged to join future groups.

Brainstorming is a method to facilitate creative idea generation. Ensure that you understand, encourage and properly use the keys to unlock the minds paralyzed by daily rituals.

Brainstorm of One (Brainwriting)One of the reasons you are distributing the options questionnaire is to encourage thinking on technology options in advance of, and outside of, the brainstorming meetings. Make sure not to give the impression that formal brainstorming meetings are where all the thinking will happen.

A quantity of new scientifi c research suggests there is more to brainstorming than originally thought. Scientists are studying cognitive processes and looking deeper into human behavior to push people to their creative heights.

Psychologist Paul Paulus, for example, has spent the last 14 years studying brainstorming techniques at the University of Texas Arlington Group Creativity Lab and has discovered the following:

• Do not overuse group brainstorming as groups create distractions, conformity, and social inhibitions.

• Groups harbor illusions of their own effectiveness and therefore prematurely believe that they have completed the task.

• Solitary brainstorming is as effective as group brainstorming. Groups with 4 members generated about half as many ideas as 4 individuals brainstorming individually alone.

Ideally, you want to get the most out of individual and group brainstorming. By distributing some ideas as well as the options questionnaire in advance, you will be practicing what brainstorming experts called “brainwriting”.

“Brainwriting” occurs when one member of the group writes their idea down and then distributes the idea to others to obtain feedback and additional ideas. This technique has been proven to generate 40% more ideas than individual brainstorming.

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Stage 5> Perform a Gap Analysis It’s reality check time. In Stage 4 you were asked to blue sky a little bit about how IT might play a critical role in the future competitiveness of your organization. At the time, you were advised to be bold and to not worry too much about what it might take to get there.

This Stage compares your current IT situation to the proposed situation you developed in Stage 4. By taking a detailed account of what you will need in the future and then matching it against your current situation, you will be able to create a roadmap for your organization.

If you have completed all of the sections in the workbook up to this point, performing a gap analysis should be a fairly straightforward process.

Step 1 – Analyze Alignment Gaps

Review the results of “Stage 2: Document Your Business Strategy” and “Stage 3: Assess the Current IT Situation” in the context of the four quadrant strategic alignment model.

Step 2 – Analyze Infrastructure Gaps

Assess the IT requirements of the projects and areas of investment you identifi ed in “Stage 4: Propose a New IT Situation”. Look at where current IT systems and skills sets do and do not fulfi ll those requirements.

Step 3 – Summarize and Resolve Gaps

Put together a summary of the gaps identifi ed in both Step 1 and Step 2 and chart the implications for your IT strategy of addressing those gaps.


Stage

5


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In This Stage

Stage 5> Perform a Gap Analysis .................................................................... 93

Step 1 – Analyze Alignment Gaps. .......................................................... 95

Step 2 – Analyze Infrastructure Gaps...................................................... 96

Step 3 – Summarize and Resolve Gaps ................................................. 97

Stage Summary....................................................................................... 98

Workbook

Stage 5> Perform a Gap Analysis .................................................................. 126

5.1 Assess Your Alignment.................................................................... 128

5.2 Review Strategy to Assess Skills .................................................... 138

5.3 IT Infrastructure Gap Analysis ......................................................... 141

5.4 Recommendations to Resolve Strategic Gaps................................ 143

Agility Tips

Before you meet with anybody to discuss the gaps, take a few minutes alone to play the Devil’s advocate. Write down ten things you wish you did better. Then compare your list to corporate objectives. Drop the items that don’t directly relate (these are your pet peeves which need to be dealt with at another time). Use what is left to spark the thinking of your working group when you meet to discuss gaps.

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Step 1 – Analyze Alignment Gaps

Objective:

• Analyze gaps between current operational goals and corporate strategy.

What You Need To Doü Review your strategic position. Review your summary of corporate strategy from Stage

2. Use the tool “5.1 Assess Your Alignment” to review information about your current alignment situation and to identify gaps.

ü Relate strategy to current skills. Use the tool “5.2 Review Strategy to Assess Skills” to identify gaps between your current IT skill sets and the requirements of business/IT alignment.

Tool “5.1 Assess Your Alignment” is based on the four-quadrant strategic alignment model. The tool is divided into fi ve sections. Sections one through four allow you to map the information you have gathered so far into the four quadrants of the alignment model.

For example, in section “4.a” of the tool you are asked “Outline the key parts of your IT infrastructure such as the main platforms, hardware, software, and network confi gurations that you support.” You should be able to complete this table with information gathered in your Stage 3 IT Assessment.

The most important part of the tool, from a gap analysis perspective, is the fi nal section. In section fi ve you will be asked to consider a number of questions to assess how well-aligned your organization is and what gaps there may be. Use these questions as a starting point for a discussion with your steering group. The questions include:

1. Do the current skills and processes of the organizational infrastructure (from Section 2) support where the company wants to go in terms of strategic goals (Section 1)? If not, what are the gaps?

2. How can information technology improve business processes that will help the company meet strategic goals?

3. What enterprise-wide technological initiatives would most benefi t the strategic goals of the company? (For example, if total customer lifecycle service is a strategic goal, what key technologies and tech services would go into an enterprise customer relationship management system).

4. Do your current distinguishing competencies and strategic deliverables (your answers to 3-A and 3-B) relate to future strategic priorities of the organization? If not, what has to be done?

5. Assuming that your IT strategy aligns well with your business strategy, and that the organizational infrastructure and processes are well-suited to meeting strategic goals, which parts of your IT infrastructure (architecture, processes, and skills) best deliver on functional integration with other departments and strategic fi t?



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6. What elements do not fi t either horizontal or vertical alignment and what elements will have to be built or bought?

From this discussion use the Alignment Gap Summary to list action areas where alignment gaps might be addressed.

Step 2 – Analyze Infrastructure Gaps

Objective:

• Analyze gaps between current infrastructure and the proposed new IT situation.

What You Need To Doü Identify future requirements. Completing a gap analysis between your current systems

and your vision of the future of IT at your company requires you to identify all of the IT requirements needed in the future. Use “5.3 IT Infrastructure Gap Analysis” to enter these requirements.

ü Identify the gaps. Using the Infrastructure Gap Analysis Tool, go through your list of future IT requirements. Compare them to current capabilities. Make note of where current capabilities don’t match future requirements. These are your gaps.

Depending on the level of detail you drilled down to when creating your vision of the future in the previous stage, extra work may or may not be necessary here.

Your objective should be to make your vision of the future as concrete and detailed as possible. You need to determine specifi cally what you will need in the future, so that you can evaluate whether or not you currently have the capabilities and what you need to do to bridge the gap.

Every time you identify an IT requirement, write it down in a separate list. The more detailed you make your list, the more useful it will be when you are trying to fi nd gaps in your current systems.

After you have completed a list of requirements for each procedure, the next step is to compile the list into one comprehensive master list of IT requirements.

The gap analysis tool uses a three column approach.

1. In the fi rst column, write your future requirements.

2. In the second column, identify the current system that fulfi lls the requirement.

3. Identifying the gaps is now a straightforward process. Go down your list. Every time you fi nd a future IT requirement that is not met by current systems, make a note in the third column.

Be honest! If there are requirements listed that are not met, or are only partially met, by your current systems, do not include a substitute for the sake of making the list look better.

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Remember, the requirements listed are future requirements, so you should expect to fi nd a large number of gaps in your current systems. Conversely, if you are not fi nding many gaps, chances are you need to revisit your vision of the future of IT at your company because you have probably not set the bar high enough.

Eliminate Irreconcilable Differences

You are likely to fi nd that there are some things that simply cannot be accomplished. Go down your list and rule these out early. There is no point in wasting time on goals that can’t be met, whatever the reason.

You should now be left with a set of achievable goals.

Step 3 – Summarize and Resolve Gaps

Objective:

• Create a summary document of gaps.

What You Need To Doü Gather strategic gaps and implications. Accumulate all of the implications and gaps

that you have identifi ed thus far in this stage. Use “5.4 Recommendations to Resolve Strategic Gaps.”

ü Resolve gaps. In a meeting with stakeholder(s), develop some recommendations as to how you might overcome the gaps identifi ed in this stage. Distribute the list of gaps ahead of time so that people have time to think on their own and table ideas at the meeting.

Get everyone involved and think creatively. Don’t discount any ideas yet, just try to get as many solutions on the table as possible. Use “5.4 Recommendations to Resolve Strategic Gaps” in your workbook to help you document your ideas.

Is there a project here? Carefully examine the proposals for resolving gaps. These could spark specifi c strategic project plans.



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Stage Summary: Perform a Gap Analysis

Your gap analysis should yield a solid list of possible actions that will get you there from here. It should also help identify the things you are doing right – those projects and processes that are already helping achieve competitive advantage.


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model Done 4IT SWOT Analysis Done 4List of Proposed Future IT Directions Done 4List of Requirements for Resolving Gaps (Roadmap) Done 5Corporate IT Vision Statement 6Corporate IT Governance Charter 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Stage 6> Propose a Strategic Vision and Governance ModelWith a fi rm grasp of your company’s business objectives – and having brainstormed various ways that IT can enable them – now is a good time to establish an overall strategic vision for IT in your organization.

All of the work you have completed thus far should help you to arrive at a fi rm understanding of the role that IT can play within your company. Setting a clear direction will help you later when you are evaluating and prioritizing the projects in the decision-making framework.

Step 1 – Hold A Vision Meeting With Stakeholders

Describe what needs to be done to achieve the future IT situation documented in Stage 4. Your IT core values represent the standard axioms by which IT is applied across the organization. Similar to the core values you documented for your organization, as a whole, strategic IT core values are the set of beliefs or philosophies that guide strategic IT decisions.

Step 2 – Establish a Strategic IT Vision

Use the guidelines for the organization vision statement in Stage 2 when preparing the vision statement corporate IT.

Step 3 – Propose a Governance Structure

The strategic IT vision applies to all strategic level IT decisions across the organization. The IT Steering Committee is a cross-functional committee for the on-going application of strategic priorities to all IT projects. Propose a charter for this group that draws a line from vision and objectives to specifi c actions.


Stage

6Enterprise vs. Department Vision

This section focuses on an enterprise IT vision. It is not specifi cally about establishing an operational vision for your IT department, though there will be obvious overlap.

Since the IT department is the primary mover in advancing IT strategy, it stands to reason that your departmental vision will be closely aligned (if not synonymous) with a corporate vision. However, it is important that your corporate IT vision extend beyond the IT department.

A good enterprise IT strategy will align closely with your corporate strategy and vision. It will also help focus the entire company on specifi c IT goals. An IT strategy and governance structure that is exclusive to one department (IT) leaves a space for other departments to chart their own IT courses – a practice that could have disastrous results.

For more see the articles on “One Vision For All” and “Reigning In Rogue IT” in the background section for this stage.


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In This Stage

Stage 6> Propose a Strategic Vision and Governance Model ...................... 99

Step 1 – Hold a Vision Meeting With Stakeholders ............................... 101

Step 2 – Establish a Strategic IT Vision ................................................ 102

Step 3 – Propose a Governance Structure............................................ 103

Stage Summary..................................................................................... 104

Background > One Vision for All.................................................................. 105

Reigning In Rogue IT............................................................................. 106

Building Your Steering Committee......................................................... 109

Workbook

Stage 6> Propose a Strategic Vision and Governance Model .................... 147

6.1 IT Vision Meeting Agenda................................................................ 149

6.2 Strategic Objectives List .................................................................. 150

6.3 IT Core Values................................................................................. 151

6.4 IT Vision Statement ......................................................................... 152

6.5 Steering Committee Charter............................................................ 154

Agility Tips: Forget the Poetry

The vision statement development should not take a long time. Individuals and committees will spend hours trying to get the wording perfect.

Forget the poetry, a workmanlike statement that covers the bases of what you hope to achieve is more important. If your company has a vision statement, use it as a template, inserting technology-specifi c points.

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Step 1 – Hold a Vision Meeting With Stakeholders

Objective:

• Meet with your strategic planning group to devise a vision and mission for corporate IT.

What You Need To Doü Review your corporate vision and future IT situation. Meet with your IT strategy

committee. Use “6.1 IT Vision Meeting Agenda” to review the corporate strategy, as established in Stage 2 as well as the list of IT options developed in Stage 4.

ü List strategic objectives for IT. As a committee, develop statements that capture how various IT options can improve the competitive position of the organization and or the services it provides. Use worksheet “6.2 Strategic Objectives List” to support this exercise.

ü List strategic core IT values for the company. Similar to the core values you documented for your company as a whole, IT core values are the set of beliefs or philosophies that guide strategic IT decisions. Use worksheet “6.3 IT Core Values” to document your results.

Meet with the IT stakeholders in your strategic planning group. It is important to develop a vision and mission for strategic IT . The vision exercise should be seen as growing out of your strategic planning process. It is important to keep the broader constituency in the loop.

This does not mean, however, that you or a sub-group within the IT department can’t do some “brainwriting” (see background to Stage 4) by circulating some draft vision statements and objectives prior to the meeting.

Give ample time for this meeting and keep the tone positive. By this point in the process everybody has already given considerable thought to the corporate agenda and where IT resources might help advance that agenda. Participants should not feel like they are building from scratch.

At the meeting, do the following:

1. Begin by reviewing the company vision and mission statements. It may be helpful to read the vision aloud. Make sure everybody is focused on that vision.

2. Invite participants to refl ect on all of the material that you have gathered to date and contemplate the ways that IT is going to be able to best help your company. Consider the options that came out of your earlier brainstorming sessions. Use a white board or easel to record objectives.

3. Narrow down your list into fi ve to seven specifi c objectives. The hardest part of creating your strategic objectives will likely be the wording. It can be diffi cult to create strategic objectives that are broad enough to encompass the goals you have set, yet specifi c enough to be meaningful.



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4. On a separate white board or easel page, list some core values of corporate IT. Similar to the core values you documented for your company as a whole, your core IT values are the set of beliefs or philosophies that will guide your strategic IT decision making.

For your list of core values, consider your scope defi nition from Stage 1 as well as your commitment to alignment. Some examples of core values could include:

1. Information technology plays a critical role in achieving our strategic objectives and in enabling critical processes across the organization. It should therefore be viewed as a critical enterprise resource.

2. IT projects involving an investment of $10,000 or more should be approved by the IT governance body.

3. All IT projects in this class must have demonstrable benefi t to advancing the corporate mission.

4. We are committed to maintaining a unifi ed standard for enterprise architecture across the organization.

Step 2 – Establish a Strategic IT Vision Objective:

• Draft an IT vision upon which you can base future strategic decisions.

What You Need To Doü Create an IT vision statement for your organization. Consolidate the various IT value

statements into one vision statement. Use the worksheet “6.4 IT Vision Statement” to support this exercise.

Your IT vision statement should refl ect your vision of what IT might do for the organization in the future.

• List some broad statements that refl ect the values and goals of these lists.

• Some of the statements will overlap. Others will state the same principle more than once. Devise a single statement that covers off all the main points in your list.

• Work out a fi nal draft of the vision statement as a group. Make sure that everybody agrees to the vision statement.

Your IT vision should describe what the future will look like in terms of functionality and operations (e.g. anyone can place an order from anywhere in the world, administrators can manage storage capacity globally, and so on). A good vision is both inspiring and attainable.

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Step 3 – Propose a Governance Structure Objective:

• Establish the terms of reference of a governance steering committee.

What You Need To Doü Establish and build consensus around a steering committee. Use “6.5 Steering

Committee Charter” to establish the terms of reference of the steering committee. The steering committee should have broad representation and be promoted as the main body for IT analysis and investment decisions at the strategic level.

A steering committee is absolutely critical to on-going strategic IT planning and decision making. You will know how serious your organization is about strategic IT when you see how serious it is about a steering committee.

As was stated earlier in this methodology, steering committees are not a replacement for the IT department. Neither are they, at the other extreme, a rubber stamp for IT department plans.

The mission of this committee, as stated in our example steering committee charter, could include the following:

• The committee shall review all proposals for IT investments with projected costs over a determined monetary threshold. This includes proposals from within IT services as well as proposals from other departments that have a signifi cant IT component.

• All proposals must be reviewed and approved for technological merit by the IT department.

• All proposals must include clear defi nitions of business measures and benchmarks of progress. These include cost/benefi t analysis and clear calculation of Return on Investment (ROI).

• The steering committee has the authority to reject any proposal which it deems not to have made a suffi cient business case or which does not signifi cantly contribute to the strategic goals of XYZ Company.

In following this strategic IT planning process, you have recognized that strategic IT is bigger and broader than any one department. It therefore stands to reason that strategic decisions should be made in a forum which is broadly representative, focused on aligning IT with corporate objectives, and answerable directly to the senior executive.

Agility Tip: Formalize the Informal

In this stage you are basically proposing that the planning process used thus far be made permanent. If you are a small organization, and your planning committee is an informal group of three or four people, you should still get written commitment from the chief executive that this group shall continue to oversee strategy-level IT decisions.



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Stage Summary: Propose a Strategic Vision and Governance ModelYou now should know where you are, where want to be, and how you can go about getting there. In this stage you are formally stating your vision for strategic IT development as well as a set of formal rules for IT decision making. You should have these nailed down before you proceed to the next stage: Build a Strategic Decision Making Framework. The following chart shows the progress of developing the plan after Stage 6 of the engagement.

Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model Done 4IT SWOT Analysis Done 4List of Proposed Future IT Directions Done 4List of Requirements for Resolving Gaps (Roadmap) Done 5Corporate IT Vision Statement Done 6Corporate IT Governance Charter Done 6Strategic IT Goals 7Achievable Measures 7Budget Analysis 7Prioritized Project List 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Background > One Vision for AllThe strategic IT vision that is derived from this stage in the methodology should encompass IT as it is applied across the entire enterprise. The IT department obviously has the greatest stake in this vision; however, it is equally important for all your departments.

Helping the organization achieve its strategic goals and making the organization as a whole more competitive or effective, is the key goal of strategic IT planning. According to Info-Tech Research Group, the use of “strategic IT planning can improve organizational competitiveness and therefore should be seen as a priority for the entire organization and not just the IT department.” and not just the IT department.” and not just the IT department(Use of Strategic IT Planning In Medium-Sized Enterprises).

Sixty-fi ve percent of organizations utilizing strategic IT planning (or SITP) indicated that having the plan resulted in at least somewhat increased competitiveness of their organization. (In the case of non-profi t organizations that were surveyed, “effectiveness” was substituted for competitiveness.)

Organizations with annual revenue of U.S. $0 to $100 million were most likely to realize this most likely to realize this most likelybenefi t, with nearly 80% reporting an increase in competitiveness or effectiveness due to the implementation of the IT plan. Fifteen percent responded that the use of SITP has resulted in signifi cantly increased organizational competitiveness.

However, a corporate-wide IT strategy and governance structure does not mean that the IT department’s role is somehow diminished or marginalized. The IT department should be the lead unit in developing a corporate IT strategy and is the key developer and enabler for strategic level IT projects.

Info-Tech Research Group has found that organizations that utilize SITP are more likely to view the IT department as a strategic weapon, while organizations not utilizing SITP are more liable to view their IT departments as playing a support role. This is consistent across all industry segments.



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Reigning In Rogue IT“Rogue IT” projects – projects launched and funded by departments outside of the scope of the IT department – can become a costly long-term headache for the company. How do you deal with these shadow or ghost projects? See them as symptomatic of the need for a sound and inclusive IT governance structure.

Rogue IT Scenario

Here is the situation: A department feels that a new system will help them achieve business goals cheaply and more effi ciently. They also feel that central IT cannot, or will not, support a project to develop the system. So they go ahead and do it themselves using their own IT experts or by outsourcing the project.

What is the problem with doing that? It shows initiative and a willingness to move quickly to embrace an innovative solution. Why should you care? Here are three good reasons:

• The Solution Might Not Scale. Overall organizational IT goals are probably outside of the scope of the narrow rogue project. It might solve an immediate problem, but it might also not be suitable to scale up to provide enterprise-wide solutions. When enterprise initiatives are taken down the road, the departmental solution may have to be re-tooled or replaced – an additional cost of the project.

• Bad Data/Inconsistent Format Costs. Data formats may end up being inconsistent with other enterprise IT projects and data quality that is “good enough” for the rogue project may not be good enough for other applications. For example, the marketing department may have customer data from its own project that could benefi t a new CRM package in sales, but the costs of reformatting and correcting that data will add considerably to the cost of the CRM project.

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• Off-the-Books Spending. Rogue IT represents IT spending beyond your control. However, as CIO, you remain responsible for total IT spending. If these projects cost more than expected, or if the IT department has to spend to rescue a rogue IT project gone bad, it will be on your head.

Forrester Research predicts that 5 to 15% of corporate technology spending is due to non-IT sponsored projects. Add to that the spending by IT departments fi xing problems that might be created by rogue IT (such as paying for eventual replacement systems or for fi xing non-standardized data.)

What Can Be Done?

The CIO Insight feature “Rooting Out Rogue IT” notes that “ghost IT is being seen as a symptom of poor technology management and a sign of chronic communications problems between IT and business units.”

In other words, you can’t just complain about rogue IT projects and petition higher-ups to make them stop. You must take responsibility and exercise leadership. All IT spending, by the IT department or otherwise, needs to be more closely and accountably linked to corporate strategic and spending goals.

Lack of an effective IT governance structure and communication between IT and other departments leads to conditions that breed rogue IT projects. These include:

• The “Dr. No” Syndrome. When IT investment decisions are made in a vacuum, and the justifi cations not communicated, other departments don’t know what IT is up to or why certain projects are more important than others. All they know is that their project is “not a priority”. Many an IT manager has been nicknamed Dr. No.

• “Just Do It Anyway” Syndrome. Senior management pressures departments to be more effi cient, while also pressuring IT to spend less, and there is no accountability for the disconnect. Line managers are confronted with the message, “There is no money for this, but do it anyway.” Of course, if they do go ahead, they get criticized down the road for adopting non-standard IT solutions.

Treat rogue IT projects, or the threat of such ghost projects, as an opportunity rather than a threat. Meet with senior decision makers and press for the following:

1. Establish an IT Steering Committee. IT spending decisions have enterprise-wide impact. It simply is not fair to force the CIO or IT manager to make these decisions alone. The steering committee should involve key department representatives as well as senior administrators.

2. Require Committee Approval for All Major IT Projects. Set a projected cost threshold. The committee must approve all projects above that threshold. Each project should be judged on criteria such as cost/benefi t, strategic alignment, and how it might positively or negatively impact customer relations.

3. Manage Expectations Both Up and Down the Line. It is one thing to involve



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departments in decision making and get their support for IT decisions. It is also important to manage the expectations of senior management. Leadership sometimes means saying no to the boss (with the ability to justify that position).

Rogue IT projects happen when departments and project leaders feel they must move forward with a project even though they don’t have the support of central IT. This is a symptom of poor communication between IT and other departments, as well as between senior management and line managers. This is a situation that you can use to push a responsive IT governance plan.

As was stated earlier in this methodology, an IT steering or governance committee is not:

• A replacement for the IT manager or management team of the IT department. The IT manager manages his or her department. The steering committee helps set priorities for IT investment and evaluates how well the entire organization is progressing in meeting entire organization is progressing in meeting entire organizationstrategic goals.

• A “rubber stamp” for the IT department. The committee must be able to gauge the business impact of various proposed IT projects. They are not there simply to communicate the latest decision by the IT managers. They must have the power to say another project has higher priority.

• A complaints clearing house. The committee is not the place to air the latest problems a department is having with their technology or with the IT department.

Steering Committees Work

A 2000 study of “The Effects of MIS Steering Committees on Information Technology Sophistication” (Journal of Management Information Systems, Vol. 17 No. 2) surveyed 270 IT managers in the Financial Services industry. The study found that steering committees do indeed improve the effectiveness of IT management across the organizations surveyed.

Management Sophistication was defi ned as “management maturity” or effectiveness of the management function. Greater sophistication implies that managers are “aware of the fi rm’s long-term strategic plans, the fi rm’s future strategic plans are explicitly included in IS planning, and IS performance is evaluated based on contribution to the fi rm’s overall objectives.

The study results indicated that “presence of IT steering committees indeed helps enhance the level of IT management sophistication within fi rms”. It also noted that the roles that steering committees play also impacts on “sophistication” and that fi rms should carefully defi ne that role in the interest of getting the most benefi t from steering committees. The three roles are:

1. Steering Groups, which guide and approve IT strategy, give business direction to IT activities, and prioritize IT activities.

2. Policy Committees, which are involved in strategy implementation and creating policies and procedures associated with IT planning.

3. IT Boards, which formulate IT department strategy, control and manage IT units, and “ensure IT is run as a business.”

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The study also notes that the three are ideal groups and in reality, IT committees can have a mix of these roles, with one or another dominating. For our purposes, we are looking mainly at the Steering Group with the policy function as a possible subset.

Building Your Steering CommitteeSteering committees can be large or small depending on the size and complexity of the organization. Steering committees can also have sub-committees or working groups. For example, there may be a networking working group or a Web working group. Here are some tips for establishing your fi rst steering committee.

1. Start with a small core group. At the very least your steering committee should include a representative from Finance and Human Resources as well as representatives from key business driving departments and yourself as head of IT. Additional ad hoc experts can be brought in on a project-by-project basis.

2. Establish a monetary threshold for projects. The steering committee shouldn’t be bogged down with small projects (even though some small projects will yield big returns. Set a cost fi gure above which projects must be reviewed and approved by the steering committee.

3. Establish project benchmarks. Each project should be brought to the committee as a business case, rather than a technology case. Project plans should also have clear benchmarks by which the committee monitors progress.

4. Prioritize projects based on Strategic Alignment and Return on Investment. In addition to reviewing and recommending projects for IT investment, the committee should also be tasked with prioritizing all of the on-going projects (or approving a prioritization that you come up with). This prioritization exercise has a number of benefi ts:

• At budget time you will be able to set spending priorities based on broadly based recommendations.

• Other departments will be able to see their IT demands in the larger context of strategic plans, and at least understand (though maybe not agree with) the rationale behind decisions to proceed with one project over another.

Your steering committee should have a regular set of meetings, perhaps once a quarter or twice a year. Make sure that project proposals are lined up ahead of time and that the business benefi ts are clearly stated. The committee should also approve a detailed project charter for each investment.



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When you are faced with a decision, the best thing is to do the right thing, the next best is to do the wrong thing and the worst thing to do is nothing. Roger Enrico, CEO of PepsiCo

You have identifi ed the gap between where you are and where you want to be. You have also established a governance structure that identifi es a strategic vision and incorporates a steering committee. Now it is time to make some concrete recommendations and determine a course of action.

Translating your strategy into some tactical and operational goals is the objective of this stage. We have divided it up into four steps. Each step builds on the previous. By the time you have completed this stage, you will have a prioritized list of projects for the upcoming year.

These are the steps in this section:

Step 1 – Set Strategic Goals and Measures

Begin the process of turning your strategy into action by setting some clear goals for corporate IT. This takes the work you did in the previous stage – Propose a Strategic Vision and Governance Model – and turns it into some actionable objectives for the upcoming year.

Step 2 – Perform a Budget Analysis

Goal setting and measurement are only two steps of the cycle. The last step is budgeting future performance levels. After you have gathered some actual information on this year’s budget, budgeting next year’s information becomes much easier.

Step 3 – Identify Your Options

Begin identifying your options by taking a high level approach. Using your gap analysis from Stage 5, group together functions that you think can be fulfi lled by a specifi c IT project.

Step 4 – Prioritize Your Projects

Use a three-tier approach to prioritizing your projects. Our Project Ranking Framework is designed to provide you with a robust prioritization process that ensures that your department’s projects are aligned with the objectives of the business. These include:


Stage

7


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• Info-Tech Project Matrix

• Info-Tech Priority Index

• Info-Tech ROI Calculator

This is the last step in creating your Strategic IT Plan. Once you have fi nished this section you will have a plan that establishes the direction for the IT department for the upcoming year and clearly explains how you will achieve your objectives.


Step 1: Set Strategic Goals and Measures ........................................... 113

Step 2: Perform a Budget Analysis........................................................ 116

Step 3: Identify Your Options................................................................. 117

Step 4: Prioritize Your Projects.............................................................. 120

Stage Summary..................................................................................... 124

Background > Types of Goals IT Should Set .............................................. 125

Financial ................................................................................................ 125

Organizational Goals ............................................................................. 126

Technology Operations.......................................................................... 128

Customer Service Goals........................................................................ 129

IT Governance Goals ............................................................................ 130

Getting Buy-In for Your Goals................................................................ 131

Using Your Budget as a Management Tool ........................................... 132

Dealing with Budget Cuts ...................................................................... 133

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Workbook


7.1 IT Strategic Goals............................................................................ 158

7.2 Balancing IT Measures.................................................................... 161

7.3 Budget Analysis Worksheets........................................................... 165

7.4 Budget Summary............................................................................. 171

7.5 Analysis of Available Options .......................................................... 172

7.6 Business Case Template................................................................. 173

7.7 Comprehensive Project List ............................................................ 174

7.8 Info-Tech Project Ranking Framework ............................................ 176

7.9 Prioritized List of Projects ................................................................ 184

Agility Tip: Consensus On Procedure

This Stage is the foundation of all future strategic planning and decision-making. How you do it (make decisions) is important. But more important is consensus on how it will be done from now on.

In this Stage you are agreeing on a common language for expressing the strategic value of IT projects. Worry about getting that consensus more than on the details of the framework – these will continue to develop over time.



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Step 1 – Set Strategic Goals and MeasuresObjectives:

• Establish strategic goals for IT, based on your new vision and objectives.

• Establish measures for ensuring that goals are achievable.

What You Need To Doü Start turning your strategy into action by setting some clear strategic goals for

enterprise IT. Take the work you did in the previous stage – Propose a Strategic IT Vision and Governance Model – and brainstorm some actionable objectives for the upcoming year. Use SMART (Specifi c, Measurable, Attainable, Relevant, and Timely) criteria to help clarify your goals. List your goals in the worksheet “7.1 IT Strategic Goals”.

ü Establish clear measures for each goal. Take a balanced scorecard approach to creating sets of measures for your strategic IT goals. Use the example scorecard “7.2 Balancing IT Measures” as the basis for your own scorecard.

Setting goals is critical for the on-going success of any IT department. However, according to one TechRepublic Survey, 58 percent of IT managers either didn’t set goals or didn’t measure their performance towards goals. To be a successful IT manager, you must set goals, measure your performance towards these goals, and translate the goals into documents like budgets and job descriptions.

The SMART technique for goal setting is fairly well known. While not all goals fi t into the SMART formula, it’s an excellent starting point that addresses the key characteristics most goals should. Use these SMART criteria to help you establish departmental goals.

Specifi c:pecifi c: The goal must be clear, understandable, and state the expected result. Give each goal a clear start and end point, and limit your number of goals to four to seven. Focus is critical to achievement.

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Measurable: The goal must stipulate quantitative and/or qualitative measures to help you determine if the goal has been achieved. Build in milestones to help break goal achievement into manageable tasks and help you identify problems earlier. Be sure to include goal review and revision in your milestones.

Attainable: The goal should move you beyond your comfort zone into new growth areas, but still be realistic and within your departmental or organizational capabilities.

Relevant: The goal must be clearly derived from, and harmonized with, organizational strategic goals. Prioritize your goals against organizational objectives before creating plans for accomplishing them. Plan execution of your highest ranked goal fi rst – this way, you can ensure that suffi cient resources are allocated to your most important target.

Timely: The goal must be tied to deadlines and put into a timetable in order to prevent delay of activity. Remember that many IT projects can run well over a year in length, which effectively overshoots most goal-setting timelines. Make sure senior management is committed to supporting stated IT goals beyond the current year.

The Balanced Scorecard

The Balanced Scorecard (BSC) combines traditional fi nancial measures with supplemental measures such as gauging innovation and customer satisfaction.

Objectives and measures are set from four perspectives:

1. Financial Perspective: Traditional fi nancial measures such as profi tability, revenue, and sales growth.

2. Customer Perspective: Customer retention, customer satisfaction, and market research.

3. Internal Business Processes Perspective: Processes instituted to meet or exceed customer expectations.

4. Learning and Innovation Perspective: How the organization and its people grow and change to meet new challenges.


Beware of Goal-Setting Pitfalls

Knowing how to set SMART goals is only the fi rst step. The goal-setting process itself contains a few traps of its own. Here are some common pitfalls to avoid.

• Do not set goals for others. Much of the work done in IT is in support of other departments. Know their business. Only set goals after you have discussed priorities and implications with those that they affect, including your staff.

• Aiming for perfect goals can paralyze you. Not all goals can be made specifi c, measurable, and time-bound. Set your sights on being reasonable, not perfect.

• Remember that you can always make changes. In fact, changing, deleting, and adding elements to your goals is often the responsible thing to do. Relax.

• Avoid rigidity. Overly strict adherence to goals can inhibit adaptability and learning. Stay away from goal attainment at the expense of fl exibility and growth.


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The balanced scorecard and sample measures provided in “7.2 Balancing IT Measures” are derived from Measuring Performance and Demonstrating Results of Information Technology, an Executive Guide of the Accounting and Information Management Division of the US General Accounting Offi ce. You can download the complete guide from:

http://www.gao.gov/special.pubs/ai98089.pdf

BSC and Strategic Planning.

Advocates of the BSC method agree that a BSC without a strategic planning vision is next to useless. For your BSC to have a hope of success, you should be able to answer in the affi rmative to the following questions.

1. Is there a strategic vision? A scorecard doesn’t provide you with a vision. If there is no vision, there is no way to apply measures.

2. Does the scorecard have executive buy-in? Without buy-in on strategy and objectives you can’t set measures that will have an impact.

3. Do your initiatives and measurements tie into your strategy? If initiatives and measurements don’t link to strategy, you’ve expended resources on activities that won’t contribute to the success of the organization as a whole.

Your vision has been created through an inclusive process, which has strong executive buy-in, and business/IT alignment is a strong focus of your planning .If you have followed this methodology so far, answering yes to the above should be a no-brainer.

Step 2 – Perform a Budget Analysis Objective:

• Analyze the budget implications of meeting strategic objectives.

What You Need To Doü Perform a high level analysis of the IT budget. Use “7.3 Budget Analysis

Worksheets” to review your current and projected budget.

ü Summarize your budget. Use “7.4 Budget Summary” to summarize key points of your budget that are germane to the strategic planning process. This information will go into your Strategic Plan document.

Goal setting and measurement are only two steps of the cycle. The last step is budgeting future performance levels. After you have gathered some actual information, budgeting for next year becomes much easier.

Use the actual performance information you gather to help set your departmental budgets (both capital and expense) for next year. Performing this analysis will give you insight into where the money is going and where it may need to go in the future to support strategic initiatives.

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Showing that you have a realistic grasp of the mechanics of the IT budget will help you sell your ideas for IT investment.

Step 3 – Identify Your Options Objective:

• Identify strategic options and create business cases for each.

• Recommend a set of projects for the coming year.

What You Need To Doü Identify your options. Begin identifying your options by taking a very high level

approach. Using your gap analysis from Stage 5, group together functions that you think can be fulfi lled by a specifi c IT project or investment. For example, you may be able to group together a number of functions that relate to customer contact. These are likely to be fulfi lled by investing in a contact management application.

ü Analyze the options. Once you have listed a number of options for each possible solution, take your understanding a step deeper by analyzing each of the options. Use “7.5 Analysis of Available Options” to review all available options.

ü Create a set of business cases. Use the “7.6 Business Case Template” to create a business case for each project. Include fi nancial information as part of your recommendations. This cannot be emphasized enough since it is the one thing that senior management looks to fi rst, and the one thing that IT tends to overlook.

ü Make recommendations. Meet with your planning group and review the business cases. Draft specifi c recommendations for inclusion in your group’s Strategic Plan document. If you have been diligent in your option identifi cation and analysis work, your fi nal recommendations should be clear, logical, and fi t with your company’s overall business strategy.

As applications evolve, many of the lines of distinction between types of applications or hardware solutions and their associated functionality are being blurred. Nonetheless, as the IT manager, you will likely have a reasonably good sense of the types of high-level systems that you will need. List all of the high-level systems that you will be evaluating.

Once you have done this, begin to identify at least three options for each. Do some research and determine options and their respective vendors. You can probably begin by doing some research on the Internet, but to get to the level of detail you require to make a fi nal decision, you will probably have to send out some Requests for Information (RFIs) or Requests for Proposal (RFPs). Don’t exclude any option at this stage for fi nancial or other reasons.



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Analyzing the Options

Once you have listed a number of options for each high-level system, take your understanding a step deeper by analyzing each of the options on the following dimensions:

• Costs (hardware, software, outside services, training, support)

• Time required to implement (i.e. duration of the project)

• Time required to maintain

• IT resources required

• User resources required

• Benefi ts to your company

• Reasons you might not want to go with this option (deterrents and risks)

• Compatibility with existing systems

Create a Set of Business Cases

Use the information you just gathered to prepare a business case for making the suggested changes. Management thinks in terms of costs, benefi ts and return on investment (ROI) – make sure that your business case takes this into account.

For example, stating that:

“We have to add extra RAM to 10 desktops because PCs they are slow at running the new version of the customer service application”

is not as likely to get a positive response as saying that:

“By adding extra RAM to 10 desktops PCs, at a cost of $2,000, we estimate that the help desk can handle 20 more customer service requests per hour, which will save an estimated $20,000 per year in labor and phone costs.”

Digging Deeper: Vendor and Software Selection Methodology

Info-Tech’s in-depth vendor and software selection methodology can help you dig deeper into the software selection process.

“Buying Right: Vendor and Software Selection” will help you make the right choice by providing you with a proven, best practice process that will walk you through all of the issues you need to consider and the potential pitfalls you need to avoid.

This methodology provides you with the means to focus your efforts on core organizational needs rather than on the minor issues that can often sidetrack this type of evaluation.

For more, go to www.infotech.com.

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Prepare a business case for each solution. In your business case, include the following information:

• General description of the high-level system

• Identifi ed options

• Benefi ts

• Costs

• Risks

• Recommendation

Remember, these are going to be read by senior management. A good business case is no more than two to three pages in length. Keep them clear and concise. You don’t need to include every detail your research uncovered. Add value through your insight and analysis.

If management has asked you to include all of your background research, you should still prepare an executive summary of your fi ndings and include it at the beginning.

Make a Recommendation

Preparing a complete set of business cases gives you an objective way of analyzing the various solutions available. Once you have prepared a business case for each solution, the fi nal step is to make some recommendations.

Make sure that your recommendations are clear and justifi able in language that a non-technical person can understand. Any questions or concerns will be directed towards your decisions, not your background research.

Remember, the objective here is not just to make recommendations – you have to sell your recommendations to senior management. This is where the work you did on documenting and understanding your company’s business strategy will pay off by ensuring that your suggestions fi t with the overall goals of the company.



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Step 4 – Prioritize Your Projects Objective:

• Create a prioritized list of projects for inclusion in the annual strategic IT plan.

What You Need To Doü List all projects that are currently in progress. Refer to the work you did in Stage 3

documenting your current IT projects. Use “7.7 Comprehensive Project List” for this purpose.

ü Add to your Comprehensive Project List all of the possible projects that your department can pursue in the upcoming year to the list. Do not exclude any project for any reason. The Project Ranking Framework will take care of sorting out less attractive projects.

ü Use “7.8 Info-Tech Project Ranking Framework” to analyze and sort your projects into priority order.

• Use the “Info-Tech Project Matrix” to sort projects into four distinct groups: Pursue Aggressively, Scale Down, Pursue Cautiously, and Terminate Immediately.

• Use the “Info-Tech Priority Index” to ensure that your projects are aligned with the objectives of the business.

• Use the “Info-Tech ROI Calculator” to create comprehensive return on investment criteria for each project.

ü Use “7.9 Prioritized List of Projects” to list your top ten projects in priority order as established by Info-Tech’s Project Ranking Framework. This prioritized list is one of the central components of the Strategic IT Plan that you will submit to management.

1. Info-Tech Project Matrix

The fi rst step in sorting your initiatives is fairly straightforward. Use the project matrix below to sort your projects into four separate groups. Projects should then be carried forward in their groupings and prioritized using the Info-Tech Priority Index.

This framework shows the four generic strategies for IT projects: Pursue Aggressively, Scale Down, Pursue Cautiously, and Terminate Immediately:

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Contribution to Core Business(CCB)

Econ

omic

and

Ups

ide

Pote

ntia

l(E

UP)

Low High

High

Low

#3Pursue

Cautiously

#2ScaleDown

#4Terminate

Immediately

#1Pursue

Aggressively

For a more detailed defi nition of each quadrant of the project matrix see “7.8 Info-Tech Project Ranking Framework” in the workbook. Once you have sorted your projects into the four groups, take your prioritization a step further using the Info-Tech Priority Index.

2. Info-Tech Priority Index

Use the Info-Tech Priority Index to sort each group of projects. The Priority Index is a simple, but effective, analytical tool you can use to help you prioritize your projects. Info-Tech has assigned a suggested point rating to each factor, but these can be adjusted to refl ect your company’s objectives.

Info-Tech Priority Index

ViabilityCustomer Value Proposition – CVP – (0 -15)Economic And Upside Potential – EUP – (0-25)Industry Attractiveness – IA – (0-15)

“Fit” Fit With Company Goals/Capabilities – CGC – (0-15)Ease Of Implementation – EI – (0-15)

RiskPossibility of Missing Schedule – PMC – (0-5)Risk of Cost Overrun – RCO – (0-5)Technical Risk – TR – (0-5)

Total: Total out of 100



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For a detailed defi nition of each of the factors listed above, see the Priority Index in “7.8 Info-Tech Project Ranking Framework.” Assigning each project a rating out of 100 on the Info-Tech Priority Index is the fi rst step in creating a prioritized list of projects. Rate each individual category separately.

To Complete Info-Tech’s Priority Index:

• List all of the possible projects down the left-hand column of the Info-Tech Priority Index Template.

• Schedule a meeting and include all of the key stakeholders, including senior management.

• Hand out copies of the project list to each meeting participant.

• Ask them to assign rankings to each project under the criteria in the Priority Index Template.

• Briefl y explain each project and wait until everybody has fi nished assigning the project a numeric ranking. By completing rankings together as a group, it allows individuals to clarify any information they need to assign a ranking.

• Once you have assigned a ranking for each project, ask every attendee to submit their completed Priority Index template to you.

• Depending on the number of projects on your list, you will want to tally and average the scores after the meeting by inputting them into the spreadsheet provided with this workbook.

• Once you have tabulated the scores, sort them in order of priority, with the highest scoring project listed fi rst.

• Distribute the prioritized list to all meeting attendees.

Completing the Info-Tech Priority Index has moved your highest priority projects to the top of the list. Before you fi nalize your list, take your analysis a step further by applying the Info-Tech ROI (Return on Investment) Calculator to your top ten projects.

3. Info-Tech ROI Calculator

The Info-Tech ROI Calculator will provide you with one last step of prioritization. It will also force stakeholders to think through the project and identify potential risks.

Info-Tech’s ROI Calculator is an Excel spreadsheet and can be found the accompanying CD-ROM with additional explanation found under Info-Tech ROI Calculator in “7.8 Info-Tech Project Ranking Framework.” Use the spreadsheet to determine the ROI for each of your top projects.

Input all of the necessary data for each of your top ten projects. Once you have inputted all of the costs and benefi ts of each project, re-sort the projects based on the expected ROI of

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each project.

Your project with the highest return on investment should be the highest priority. Consider eliminating projects that do not meet the “2:1” Rule of Thumb. If the benefi ts of your proposed solution are not at least double the expected costs, then the project is not worth doing.

Agility Tip: Show Your Work

The tools in the Info-Tech Project Ranking Framework will help provide you and your stakeholders a common language and touchstone for prioritization.

If you don’t have time to work through the framework in a workgroup setting, as suggested above, make sure to at least distribute the framework to senior decision makers. Make sure they understand and approve of the methods being employed and be prepared to show your work in justifying prioritization decisions.



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Stage Summary: Build a Strategic Decision Making FrameworkThis stage is critical because, in addition to analyzing and recommending specifi c projects for the coming year, you and your governance group are establishing practices for how strategic level IT projects will be measured and evaluated from now on.


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model Done 4IT SWOT Analysis Done 4List of Proposed Future IT Directions Done 4List of Requirements for Resolving Gaps (Roadmap) Done 5Corporate IT Vision Statement Done 6Corporate IT Governance Charter Done 6Strategic IT Goals Done 7Achievable Measures Done 7Budget Analysis Done 7Prioritized Project List Done 7Completed Strategic IT Plan Document 8Comprehensive Strategic Planning PowerPoint 8Strategic Planning Communication Plan 8

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Background > Types of Goals IT Should SetHere are the fi ve major types of goals you should consider setting. Each has different sub-types, metrics, and management issues. Below we will discuss appropriate measures for each category.

• Financial • Customer Service• Organizational • IT Governance• Technology Operations

Financial Enterprising IT managers will create and beat their own internal fi nancial goals. Here are a few examples of the different sub-types of fi nancial measures:

Budgeting

There are two kinds of budgeting IT managers perform: capital and expenditure. Capital budgeting is for projects and assets that will last over a long period of time, such as more than one year. IT managers can set budgetary goals such as reducing the capital budget 25%, reducing the toner cartridge budget 20%, or reducing the total expense budget to $1,000,000.

Purchasing

Purchasing involves selecting vendors and products that meet corporate requirements. Many vendors also require long-term management and strategies (e.g. Microsoft). IT managers can set a large variety of purchasing-related goals, such as reducing the number of PC suppliers


Aligning IT and Business Goals

IT goals and business goals must be continuously aligned and realigned. This point should be abundantly clear to you by now, based on the work you have completed. Below is a quick reiteration of some of the key points you should remember to ensure that your department’s goals fi t squarely with the overall direction of the company.

1. Make sure the business goals are clear. Transferring high-level goals down to operational IT goals can be a lot like playing the children’s game of whispering a message to the person sitting next to you in a circle (the message gets distorted). Get the latest information about business goals from business managers and ask if you don’t understand something.

2. Communicate business goals to all IT staff. After business goals have been fi nalized or changed, you need to communicate them to your IT staff. Asking questions about the business goals is a good way to test if the information has been communicated effectively. Remember that business goals don’t usually translate directly into IT goals, but IT staff should keep this information in mind when doing their jobs.

3. Earn the trust of senior non-technical management. This isn’t easy, but is critical for the success of projects that span multiple years (e.g. e-commerce) and high-profi le projects (e.g. management reporting). Trust can’t be won immediately, but must be built up over a period of time. This methodology is an important step in that process.


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from fi ve to one, increasing the dollar amount of purchases from a strategic vendor by $500,000, reducing total purchasing expense by 10%, and so on.

Total Cost of Ownership (TCO)

Total cost of ownership (TCO) is a measurement of all the costs of purchasing and using a technology. These costs include both direct (e.g. the purchase price) and indirect (e.g. other system resources that will be used). TCO is a major issue for IT managers, especially in the current environment of cost cutting and budget control. You can set TCO goals such as reducing you network TCO to $25 per user, or reducing overall TCO by 10%.

Organizational GoalsIn addition to fi nancial goals, companies can set organizational goals for their IT department. Organizational goals relate to the people working in the IT department and how they work. Here are some examples of organizational goals:

Staffi ng

When more than a few people are in an IT department, its manager must create an organizational structure with specifi c roles and responsibilities. As companies grow, you can see where new staff will be needed in the future and plan for the changes necessary in the organizational structure. For example, your company may be integrating systems with dozens of new customers, which is increasing the demands for customer system support. You can set a staffi ng goal of having three full-time people to handle all your customers’ system issues at the end of December. You can also set a goal of creating a new department for customer system support at the same time.

Another staffi ng goal you can set is related to productivity. If some of your current staff is under-worked, you can assign more work to increase productivity. If you measure their output (e.g. lines of code, number of hours worked) before this change, (e.g. 100 lines of code per week, 30 hours worked per week), you can set a productivity improvement goal (e.g. 200 lines of code per week, 40 hours worked per week). Similarly, if you have staff not working as hard as you think they should, you can measure their output and set productivity improvement goals. Remember to agree on the consequences of not meeting the goals with your staff before starting to measure performance.

Training

Because technology changes so quickly, skills become obsolete very rapidly. Keeping IT staff current with the latest technologies is a necessary investment to keep your technology functioning optimally. However, training also costs money, and fi nancial budgets need to be set.

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You can set training goals of having all your Windows NT 4.0 certifi ed staff upgrade their certifi cation to Windows XP certifi cation by June 30, or reducing the training budget from $10,000 to $8,000.

Management/Reviews

Having subordinates means that you must review their performance and manage them through problems. Although many large organizations require semi-annual or annual performance reviews of all employees, smaller companies often don’t have these requirements. You can set management and review goals for doing performance reviews for all your employees by the end of the current quarter.

In addition, you can set management goals for coaching employees with poor reviews. An example of this type of goal would be to improve a specifi c employee’s evaluation from “Poor” to “Good” by the next review through coaching.

Technical Skills Inventory

In larger organizations, the IT manager often doesn’t know every member of the department personally or what their skills are. These companies make inventories of their employees’ skills to match their skills with the projects they have to do. For example, you can set a technical skills inventory goal of creating the inventory by December 31, or adding “years of experience” to the database by the end of April.

Application Development Productivity

Programming output is a very diffi cult activity to measure, but managing this is critical to the success of your IT organization and the overall company. You can set an application development productivity goal of 1000 lines of code per quarter per employee, or no more than 10% of the initial programming time spent on debugging afterwards.

Effi ciency and Effectiveness

Effi ciency and effectiveness are related concepts that are critically important to any activity. Effi ciency measures whether you are doing things right, and effectiveness measures whether you are doing the right things.

Effi ciency in the IT department can be measured by taking outputs (e.g. business value created) and comparing them to inputs (e.g. total departmental costs) over time. You can set a goal of improving the ratio of business value to IT department costs by 10%.

Effectiveness in the IT department can be measured by surveying users to determine how satisfi ed they are with the IT department’s work. You can set a goal of an average customer satisfaction rating of 4 out of 5 (where 5 is high) and measure performance towards that goal by surveying users.



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Technology Operations On-going operations may appear routine and boring to users and support staff, but measuring their performance is critical to managing the trade-off between costs and user satisfaction. There are several sub-types of technology operations goals you can set:

Help Desk

Most IT professionals and users are familiar with help desk operations. However, many IT departments do not measure help desk performance on attributes like average response time, percent of issues resolved, customer satisfaction, and so on. You can set goals for each of these metrics and offer performance guarantees (e.g. support staff will respond to each inquiry in 30 minutes, 95% of issues will be resolved 30 days after the initial logging of the request, and users will have an average satisfaction rating of 4.5 out of 5).

Uptime

Uptime is a more technical measurement of IT operations, but is still critical to many users. Certain users require a great deal of system uptime (e.g. order entry), while others don’t require as much (e.g. building maintenance).

You can set uptime goals for the overall company and/or specifi c departments and applications (e.g. the order entry application will be available 95% of the time Monday to Friday 8:00 – 6:00). You can also set uptime goals for specifi c days and times (e.g. during month-end, all fi nancial systems will be up 99% of the time, and support staff will be available 24-7).

Security

Security goals are critical to protecting the company’s reputation and assets. Security goals can include having all extra-company data communications encrypted with 128-bit encryption, and having virus defi nitions updated every day instead of every week.

Disaster Planning/Business Continuity Planning

Business continuity planning is a critical issue for senior management today. IT managers need to be able to offer business continuity solutions that will let the company operate normally or almost normally very quickly. IT managers can set goals for business continuity planning of having real-time data available in the off-site location, or being able to restart operations in 24 hours after a major disaster.

Service Level Agreements (SLAs)

Service level agreements are critically important to managing external service providers, but are becoming more important at managing internal services. For example, you can set internal SLA goals for responding to all help desk inquiries within 30 minutes, and providing 99% uptime to all network users.

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Asset Management

As IT becomes a more critical component of the organization, managing IT assets is becoming a strategic imperative for IT managers. For example, you can set asset management goals for doing your fi rst asset inventory by the end of December, or auditing all PC assets by the end of June.

Policies

Users can do serious damage to systems in a variety of ways (e.g. hogging bandwidth with streaming media, spreading viruses). To prevent this, IT managers must make all users sign policies that describe what behavior is acceptable, what behavior is not acceptable, and what the consequences are for unacceptable behavior.

IT managers can set goals for getting users to sign existing policies (e.g. Internet use, e-mail use) or for writing new policies (e.g. handheld devices, wireless networking). For example, you can set a goal of getting everyone in the company to sign the Internet use policy by March 31, getting all new employees to sign all computer policies, or writing and distributing a wireless networking policy by September 30.

Customer Service GoalsCustomer service goals are very important because your users have more day-to-day awareness of them relative to other goals. Here are some customer service goals:

User Services/Levels of Service

Many new services are possible with new technologies (e.g. Active Directory). You can set goals to deploy new services to your users (e.g. Active Directory to every sales employee) or higher levels of existing service to your users (e.g. higher bandwidth VPN access).

Customer Satisfaction

Customer satisfaction is probably the most important measurement of how good a job you’re doing. Measuring customer satisfaction can be done informally by asking users what they think of your service or formally through surveys.

You can set customer satisfaction goals of having certain performance ratings (e.g. 4.5 out of 5) or improving existing poor performance (e.g. improving the 2 out of 5 rating in the shipping department to 4 out of 5 by August).



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IT Governance GoalsIT governance refers to the high-level strategies and practices of IT management. Here are some sub-goals you can make in the IT governance category:

Project Approval Method/Process

If you don’t have a standard methodology or tools for approving projects, you can set a goal of making one. You can also set a goal of creating standard tools for aiding this process.

Business/IT Alignment

Aligning IT with business goals is a critical issue for both business and IT managers. Measuring alignment can be diffi cult, but surveys of business and IT managers can be used to determine how aligned you are today and to set targets for future alignment.

Environmental Scanning

One of the most critical activities an IT manager performs is scanning the environment for critical technologies and issues that may affect the company in the future. You can set goals for how much time you spend scanning, which technologies you want to spend extra time scanning, or what you want to do with what you learn from scanning the environment.

Business Partnership

As business requirements change, you may need to develop expertise in a specifi c technology that is not yet mature. This will require a business partnership with vendor(s) to ensure that the technology meets your requirements today and in the future. You can set goals for what features you need to develop from this business partnership, or when and how you want to end such a partnership.

Top Management Commitment

In many companies, senior management doesn’t understand and is not committed to using IT for competitive advantage. You can set goals to improve senior management’s understanding and/or increase their commitment to IT (e.g. get the VP of marketing to sponsor a CRM project by December 31).

Project Portfolio Management

As you start to run many IT projects at the same time, you need to manage them as a portfolio. Portfolio management means that you calculate business value for each project and determine which projects to undertake based on the amount of business value they will generate.

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Outsourcing/Insourcing

IT departments need to outsource many routine and non-strategic activities (e.g. help desk support). However, IT departments sometimes also need to develop new competencies in new technologies (e.g. Java). IT managers can set goals for both outsourcing (e.g. all fi ve locations will have outsourced help desk support by December 31) and insourcing (e.g. by December 31 the company will have hired fi ve Java programmers and written 1,000 lines of Java code).

Getting Buy-In for Your GoalsBefore you assign goals to employees, you need to make sure they agree and are committed to them. Otherwise, they will feel excluded from the goal-setting process and work to sabotage the results. Here’s how to get buy-in for your goals:

1. Involve employees in selecting measurements and quantifi able performance levels. This should be a negotiation instead of you imposing expectations on them.

2. Map the performance expectations to their job descriptions. This will give them a greater sense of responsibility and ownership in the outcome.

3. Get the employees to measure and track the results themselves. This increases their ownership and lets them take corrective action as quickly as possible.

4. Evaluate employees based on the goals you have agreed to. You should also ask how the performance level goals can be improved and set the goals higher each review.


Measuring the Success of Your Goals

Once you have created goals, you need to measure your actual performance towards them. This requires establishing specifi c numeric metrics. Tracking actual performance lets you do several important tasks:

• Create and modify specifi c service level agreements (SLAs) as you learn more about what different customers want.

• Conduct performance reviews of IT staff based on the goals you set.

• Change job descriptions of IT staff to match IT department goals and infl uence behavior.

• Publicize what a great job you’re doing with the specifi c data you gather.


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Using Your Budget as a Management Tool

Management Application Management Benefi t

Planning Decision makers are forced to think through activities in detail.

Risk Management Information on projected expenses helps to assess feasibility and risk, and secure resources in advance.

Commitment Working collaboratively to prioritize expenditures helps gain buy in from all staff.

ControlThe budget can be used as a living prioritization document that differentiates between essential and non-essential activities.

Performance Evaluation Compensation and performance reviews can be tied to hitting budget targets.

Use the budget analysis tools in your workbook to help you identify potential line items on your IT department budget. Next, use this plan to help you turn your budget into a useful decision-making document.

• Look at Last Year. Last year’s fi nal operating budget is your best “reality check” on actual costs. However, avoid making your budget a mere extrapolation of the past - new anticipated projects will have a big impact on your fi nal numbers.

• Involve Others. Getting your decision-making staff on board with the budgeting process and helping them understand that the budget will be used as a measurement tool will ensure their commitment. Lay your assumptions on the table to ensure everyone is on the same page.

• Talk to the Right People. HR and fi nance will be able to provide you with some valuable information to help ensure accuracy. HR will be able to provide accurate headcounts, benefi ts fi gures, and predict salary increases, whereas fi nance can help predict the impact of seasonal variations on income.

• Identify Your Variables. The cost of some factors is hard to predict. Know your variables and draft several advance budgets (“fl exible budgets”) that account for potential variances. See if you can gain permission to include a contingency budget - a specifi c percentage of your total budget - for covering cost variances in “iffy” areas.

• Look Into “Rolling Budgets.” Rolling budgets work by adding an additional quarter to the end of the budget as the current quarter ends. This forces you to think long term, revisit your plan four times a year, and continually revise your projections. This method keeps your budget current and accurate, which is better for forecasting.

• Prepare Quarterly Reports. Every three months, compare how well your department is faring against budget predictions. Prepare a report and share it with your staff. Identify and investigate what are causing deviations from the budget and take action to either rectify or justify the differences.

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Dealing with Budget CutsBefore your CEO demands a 10% cut to your IT spending, build fl exibility into your budget today. The downturn in the U.S. economy makes this the smartest pre-emptive move you’ve ever made.

Why IT Gets Cut

IT is often the fi rst to get slashed when an organization is facing a fi nancial squeeze because those in IT have traditionally done a mediocre job of linking IT performance with company business objectives.

META Group states that 80% of Global 2000 enterprises have failed in merging their IT and business strategy. Only 20% will succeed in creating a unifi ed business/IT strategy and establishing an architecture process that addresses the enterprise’s key business goals. What should you do?

• Be Prepared. Make it a practice to tie IT performance with business performance measures like return on investment, return on equity, return on assets, and profi t per employee. Show through the numbers that IT is not just a cost center.

If a budget cut is necessary in your organization, use these key methods to “trim the fat.” Also, integrate these methods into your IT department culture so that future cutbacks won’t cause insomnia.

• Budget Comprehension. Make it your practice to understand the economic returns for the company on each line item within the budget. This knowledge will allow you to foresee what would take place if a particular line item were trimmed down or cut completely. This allows you to prioritize projects and protect those of high priority.

• Utilize Methodology. Make it a practice in your IT department to identify the target line item for budgetary reductions. Then ask your employees to consider ways in which to maintain the business benefi t of the line item while cutting costs simultaneously. This push toward creative thinking will have big results.

• The Best Defense is a Good Offense. Building fl exibility into your IT budget is key. This way, you won’t be sorry when your CEO asks you to cut your budget by “X-percent.”


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Stage

8Stage 8> Publish, Promote, and Maintain Your Strategy Congratulations. You have completed the work of creating a Strategic IT Plan for your organization. Now you need to pull everything together, seek formal approval, and get the ball rolling. In this stage we outline what you need to do to formally launch your Strategic IT plan. As with much in the realm of strategic planning, communication is the key.

Step 1 – Build Your Strategic Plan Documentation

Use the Strategic IT Plan template to bring together all of the elements you have created in this process into one concise plan that can be recommended to senior management. We also have a template that you can use to create a comprehensive strategic plan presentation.

Step 2 – Present Your Plan to Senior Management

Present the plan to Senior Management and require its offi cial approval. Executive sponsorship is require its offi cial approval. Executive sponsorship is requirecritical for any strategic initiative to succeed.

Step 3 – Communicate and Manage Change

If your planning process has been open and broadly-based, the completed plan should not be a surprise to anybody. However, it is still important to develop a communications plan to ensure that all stakeholders are fully aware of the plan’s contents and implications. You also need to consider the organizational impact of your initiative.


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In This Stage

Stage 8> Publish, Promote, and Maintain Your Strategy............................. 135

Step 1 – Build Your Strategic Plan Documentation ............................... 137

Step 2 – Present Your Plan to Senior Management.............................. 138

Step 3 – Communicate and Manage Change ....................................... 139

Stage Summary..................................................................................... 141

Background> A Guide to Killer Boardroom Presentations........................... 142

Guide to developing a communications plan......................................... 143

Design the Roll-Out Plan ....................................................................... 146

The Rollercoaster of Change................................................................. 147

Adjusting Your Current Organizational Structure................................... 149

Tips For Ongoing IT Strategic Governance........................................... 150

Workbook

Stage 8> Publish, Promote, and Maintain Your Strategy............................. 185

8.1 Notes for the Strategic IT Plan Template......................................... 187

8.2 Notes for PowerPoint Slide Presentation ........................................ 190

8.3 Communications Plan Template...................................................... 192

Agility Tips

The end of this strategic planning methodology is not the creation of a strategic plan document. The end of this methodology should be the creation of a permanent strategic planning process that includes a governance model and an overall goal of business/IT alignment.

Review your progress. If your proudest achievement is a nice looking plan document, but you still feel that the executive and IT can’t talk about strategy, you still have work to do.

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Step 1 – Build Your Strategic Plan Documentation Objectives:

• Create a formal strategic plan document.

• Create a master strategic planning PowerPoint presentation.

What You Need To Doü Assemble your strategic plan document. Open “8.1a IT Strategic Plan Template”.

Most of the content for the plan should now be in your workbook. “8.1 Notes for the Strategic IT Plan Template” indicates which workbook content should be incorporated into the plan.

ü Circulate a draft of the plan to your planning group. If your process has been inclusive, there will be few surprises in the content of the plan for your planning group. However, it is still important to have unanimous approval of the document before it is presented to senior executives and the stakeholder community.

ü Create a master strategic plan PowerPoint presentation. “8.2 Notes for PowerPoint Slide Presentation” provides you with notes for incorporating your SITP workbook content into a comprehensive presentation. The fi le contains a link to the shell PowerPoint presentation “8.2a Slides to Present Your Strategic IT Plan.”

A formal plan provides a tangible object that you can bring to senior management for approval and adoption of:

• The strategic IT planning procedures that you and your planning group have established including the steering committee and the prioritization matrix.

• An initial set of prioritized projects that have been identifi ed as providing the greatest strategic value to the organization.

Much of the content of your strategic plan can be derived from the workbook tools you have already completed. The fi nal step of the plan creation process is, paradoxically, to write the fi rst page – the “Executive Summary” (also called a Management Overview) section of the template. This is a succinct summary of your entire plan with specifi c focus on changes or projects proposed, costs involved, and expected timelines.

The Executive Summary is the single most important section of your plan and, in many cases, it is the only section that management will actually read. Your Executive Summary should be one to three pages long and should persuade management that your suggested plan is the best course of action for your company.

Once you have completed the Executive Summary, your Strategic IT Plan is complete and ready to be proofread. Treat your plan as carefully as you would a resume to a prospective employer. Spelling mistakes, grammatical errors and poorly structured ideas can seriously impact your credibility and diminish the likelihood that management will approve, let alone champion, your projects.


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Have a draft of the plan reviewed and approved by your planning group. Invite them to critique it and make suggestions for improvement. Make sure that you give them at least a week before you need to create a fi nal draft.

The PowerPoint Presentations

In addition to the strategic plan template document in Microsoft Word, we also provide you with two PowerPoint presentations.

• The fi rst is an empty template called “8.2a Slides to Present Your Strategic IT Plan” that you can fi ll out with highlights of your plan.

• The second – “1.8 Convergence of Technology and Core Business Strategy” – is more focused on educating your audience about the reasons that you have completed a strategic plan for the IT department.

These presentations will provide valuable backup material for communicating your strategic IT plans and processes, whether it is to senior executives, other managers, or line workers. Use either or both, depending on your objective. You may also want to cut and paste slides from one into the other to create your own presentation.

In the workbook section “8.1 Notes for the Strategic IT Plan Template” you will fi nd detailed notes suggesting how to use your workbook content to populate the slides in “Slides to Present Your Strategic IT Plan.”

Step 2 – Present Your Plan to Senior Management Objective:

• Win formal approval of the Strategic IT Plan and its recommendations.

What You Need To Doü Send out the fi nal version of your plan ahead of time to everybody you have

invited to the presentation. Since your document is probably fairly lengthy by now, highlight specifi c areas that they should focus on in case they do not have time to read the whole document. Make sure that you make the time and date of your presentation clear and confi rm who will be attending ahead of time.

ü Keep your presentation short and punchy (one hour or less) and leave a lot of time for questions. Remember that your audience is probably not very technically oriented, so don’t alienate and bore them by using techno-babble. They will want to talk in terms of costs and benefi ts, so make sure that you have these fi gures handy for every single aspect of your plan.

ü Wrap up with approval and next steps. Make sure to conclude your presentation by asking for formal approval of the plan. Outline what will happen next.

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All the work you have done thus far is not worth much if you do not communicate and sell your plan to senior management. For your plan to be truly successful, you need senior management to approve and champion it. Many well-conceived IT initiatives have failed because they did not have executive sponsorship and support.

Your understanding of your company’s business objectives and your ability to demonstrate the ways in which your plan supports those objectives is essential in gaining support from senior management.

Step 3 – Communicate and Manage ChangeObjectives:

• Communicate the plan to the broader community.

• Prepare for change management.

• Establish long term goals for Governance.

What You Need To Doü Develop a formal communication plan for the SITP. Use “8.3 Communications Plan

Template” to devise a communication strategy to promote the goals and objectives of your strategic IT plan. The plan should clearly indicate actions that need to be taken by you and others to promote and raise awareness of the plan.

ü Prepare to manage change. It isn’t enough just to inform people of impending change. Plan to mitigate the impact that strategic projects may have on your staff.

ü Establish a timetable for change. Make sure your strategic planning effort does not become an historical footnote. In addition to project milestones, make sure there is a timetable in place to review the plan and develop annual revisions/additions to the plan.

Creating a Strategic IT Plan has limited value if you do not communicate the end result to others. Although this is perhaps the most important section of this entire document, it is the one that most IT professionals overlook, for a variety of reasons.

To some, communicating with others is something they do not feel they are particularly good at. To others, laying out a plan with milestones is done only when requested, and given to only those who request it. Do not fall into any trap that prevents you from communicating your plan with as many people as possible.

This should be the most enjoyable part of completing a strategic plan for IT. It is your opportunity to get others excited about the opportunities that technology can create for your company.


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Establish a Formal Change Management Process

Follow these steps to manage your process of change:

1. Defi ne the Project Adequately: Clearly defi ning the project being pursued will help sharpen the vision. Nebulous or overly broad problem statements are harder to work with than more direct statements. Break the problem down into bite-sized portions.

2. Make the Intended Outcome Clear: The goals of the anticipated change should be made clear to all those affected by the change. Focus on measurable value that is highly visible.

3. Prioritize Multiple Improvements: Often there is more than one change opportunity in play. Determine which of these to pursue at which time, and then stick with your priority. Consider building a prioritization matrix that measures each opportunity against established criteria.

4. Determine Costs, Feasibility and Benefi ts: To help calculate the possible costs and benefi ts of the change, brainstorm how the process will look in its new and improved state. Consider all users of the process and how their interactions will change. The new process may mean less waiting time for client support, fewer people behind the scenes, or less paperwork. Market these benefi ts to the user community.

5. Assess Your Training Needs: Training is essential when changing a process. Do a training assessment in conjunction with the Human Resources department, especially if the change requires new skills or competencies. Coordinate to ensure the right people receive the right training at the right time to maximize positive effects.

6. Construct a Timeline: Once you know what needs to happen, the next decision is when it will happen. Develop an implementation timeline that incorporates major milestones and actions for approvals, budgets, and resource requirements. Identify which actions may be taken concurrently and which are dependent on other elements. Clearly identify on the timeline all items that can halt the progression of the plan.

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Stage Summary: Publish, Promote, and Maintain Your StrategyBy following this process you have established a framework for formulating IT strategy and making strategy level decisions about IT for your organization. In this fi nal stage you have put together plans and materials that will help you communicate this process and the value it will create to the organization as a whole.


Status StageCreation Of Steering Committee Done 1Scope Defi nition of “Strategic” Done 1Strategic IT Plan Kickoff Meeting Done 1Preliminary Report With Goals and Timeline Done 1Document corporate Vision, Mission and Strategic Goals Done 2Analyze Core Competencies and Competitive Position Done 2Current IT Organizational Structure. Done 3Hardware and Software Inventory Done 3Analysis of IT Trends Done 3Review of IT Against Governance Maturity Model Done 4IT SWOT Analysis Done 4List of Proposed Future IT Directions Done 4List of Requirements for Resolving Gaps (Roadmap) Done 5Corporate IT Vision Statement Done 6Corporate IT Governance Charter Done 6Strategic IT Goals Done 7Achievable Measures Done 7Budget Analysis Done 7Prioritized Project List Done 7Completed Strategic IT Plan Document Done 8Comprehensive Strategic Planning PowerPoint Done 8Strategic Planning Communication Plan Done 8


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Background> A Guide to Killer Boardroom Presentations Giving a presentation on the best of days is a nerve-wracking experience, but confronting a team of cynical executives is the ultimate presentation stress test. Use these tips to help you master the art of boardroom presentations.

Presentation Best Practices:

1. Plan Your Time: Allot one minute per slide, and two minutes for those with graphs, charts, or tables that require explanation. When planning your presentation, follow this time management rule of thumb:

• To decide on the total number of slides you should have, take the total time allowed, subtract 10% of that time, and round down to the nearest fi ve.

• For example, you have 30 minutes to present. Subtract three (10%) from 30 to get 27, and round down to 25. This means that you should have no more than 25 slides for a 30-minute presentation.

2. Maintain Readability: Projections aren’t as clear as on-screen visuals.

• Use Arial or Times New Roman fonts only and a minimum 18-point size.

• Master the 5x5 rule - no more than fi ve lines per slide and fi ve words per line.

• Stay within your presentation software’s default title and text blocks.

Tips for Building Blockbuster Presentations

With Microsoft PowerPoint, a laptop computer, and an LCD projector anybody can put together an effective presentation. When the CEO invites you to make a presentation to the senior management group, you need to knock, not bore, their socks off. Here are some tips to help make your presentations sing.

• Organize Your Information. You should be able to state the goal of your presentation in fi fteen words or less. Consider not only the information you must present, but also the questions that you are likely to be asked. Presentation technology won’t save poorly organized material.

• Use Slides to Hammer Home Key Points. The most boring presentations feature a speaker reading the content of his or her own slides to the audience. Speak to the audience and have the slides support, not repeat, your words.

• Balance Words with Images. Wordy slides are dull and distracting. Use short bulleted information nuggets complemented by photos and graphics. Limit yourself to 20 words per slide.

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3. Don’t Use Technology Just Because You Can: Technology cannot replace creativity. Other media – such as handouts – are sometimes more appropriate, especially for detailed or complex visuals. If you do present an electronic slide show, always have print copies of it available (note: conserve paper by printing multiple slides per page).

4. Bring Two of Everything: Assume that your technology will fail. Double or triple up. For starters, bring an extra laptop, modem, cables, and backup copies of your presentation saved to CD-ROM (fl oppies are not reliable enough).

5. Avoid Real-Time Visits to the Internet: The risk of technology failure is too high. Instead, store a copy of the site on your hard drive and use your browser to open the fi le.

6. Hone Your Style: The only way to improve is to practice, practice, and practice.

• Focus on perfecting the fi rst 30 seconds and last 15 seconds of your presentation. These moments are where lasting impressions are made.

• Practice holding eye contact with individual audience members for upward of fi ve seconds. Quick left to right scanning of the audience is less likely to engage them.

• Finish early. Be brief and candid. This shows respect for your audience’s time.

In the boardroom, your budget and your reputation are on the line. Developing your presentation skills is an important way to get your voice heard in your organization.

Guide to Developing a Communications PlanFace it: communications skills are not among the many abilities for which information technology (IT) professionals are known. IT professionals pride themselves on being doers, not talkers. But a “do fi rst, explain later”, attitude can doom a project as surely as faulty technology.

IT is central to business processes and organizational goals. To move your projects ahead you must be able to build consensus and develop relationships whether it be with other business units within the organization or with a client base. You must be able to communicate what you are doing and why it matters to them.

This brief guide will walk you through the creation of a communications plan. We have attached a downloadable template document that you can use to create your own planning documents.

Your organization may be large enough to employ professional communications staff. Remember, their job is not to communicate on your behalf; it is to help you communicate. Use this guide to evaluate their services. Are they asking the right questions?

When Do I Need a Communications Plan?

It should only take a few hours to draft a communications plan. You have to ask yourself whether the issue that needs communicating is worth the time investment. Here are just some possible initiatives that might warrant a communications plan.


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• Major Software/Service Roll-out. To maximize awareness and acceptance of a new application or service. “Build it and they will come” is not enough.

• Department/Organization Wide Desktop Upgrade. Do some advance legwork to help clients see the value of a change to their desktop workstation. This should reduce service-calls after the fact.

• New Policy Initiatives. Communication is crucial to encouraging compliance with policy such as a new security policy or a disaster recovery plan.

• Introduction of New Communications Vehicle. A new communication vehicle – such as a newsletter, regular e-mail, or intranet page – should itself be given maximum introductory exposure to encourage its use.

It is also important to note that if you have a range of existing communications vehicles, this does not mean you don’t need to do communications plans. A newsletter or a Web site is only a tool; you need to plan how to make effective use of that tool. Saying “we’ll put something in the newsletter or on the Web site” is not enough. A communication plan will help you identify the how, when, what, and why of using these media.

Key Point: Start With the Audience

A key failing of many communications initiatives is that they begin with output products – such as a distributed e-mail, a newsletter, or a memo – without appropriate consideration of the audience or what you would like that audience to do. If you have ever been in a meeting where somebody said, “We should have a newsletter” or “Let’s e-mail everybody about it” then you have witnessed this thinking.

Before you commit anything to paper, it is a good idea to sit down with those involved in a particular project and brainstorm about your audience. Consider these questions:

• Who is our audience? This seems like a “no-brainer”, but it can be more complicated than you think. If a newsletter is being done solely to “make the head offi ce happy” then the audience is the head offi ce, not the people reading the newsletter. Does your audience read newsletters or do they line budgie cages with them? Do they read and respond to e-mail? Do they use the Internet/Intranet?

• What do we want our audience to know? Information Technology is complex; however you should be able to state the benefi ts of a particular technology in simple terms. Focus on creating a list of key messages. If you can’t put what it is you want to communicate into three or four simple bullet points, your communication effort is in serious trouble.

• What do we want our audience to do? The best communication plans encourage an action on the part of the audience. During Y2K initiatives, for example, communication of Y2K issues to clients was part and parcel of encouraging due diligence steps that needed to be taken. The action encouraged by your plans might be as simple as attending an open meeting or going to a Web page for more on a new application.

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The considerations prompted by the above questions should be interlocking. For example, the nature of your audience and how they receive information will guide your choice of communications vehicle. Your key messages will provide the “why” for what you want that audience to do.

Anatomy of a Communications Plan

Your communications plan will lay out how key considerations – such as audience, message, and action – fi t together and with other considerations such as budget and timeline. The goal is to have a simple, one or two page document that lays out your plan to achieve clear communications goals.

Here then are the components of your communications plan and what each of them means:

• Overall Goal(s): Begin with a statement of what you hope to achieve with this communications effort. In essence you are stating your conclusion fi rst. This should be a brief statement, no more than one short paragraph.

• Objectives: Break down your overall goal into two or three discrete objectives.

• Key Messages: This is where you list the gist of what you want to communicate. You should be able to boil down your messages into two or three bullet points.

• Potential Barriers: You know whom your audience is and what you want to say to them. Now ask what possible barriers stand between your message and your audience. Be realistic; ask yourself why they should care about your message.

• Suggested Actions: Now comes the fun part. Given all of the possible barriers that may exist, what are the best ways of carrying your message to your audience to help you move them toward a particular goal? This part lends itself well to a brainstorming session: start with all the options regardless of how unusual or expensive.

• Budget: Time for a reality check. If you are going to produce anything on paper, make sure you consider the cost of production and distribution. Consider the costs that will be incurred if you outsource the job in whole or in part. Time is also a resource that should be budgeted.

• Timeline: By this point you should have a short list of actions that are “do-able”. Now it’s important to plot out a timeline for the proposed actions to take place. Take care to consider maximum impact for each action and a mutually supportive timetable.

• Roles and Accountability: Many an exciting communications plan has died because of inadequate follow through. Your plan should be clear about who will be responsible for various actions and who will make sure the timeline is met.

• Post Mortem: A fi rm date should be set for reviewing whether or not the timeline was met and what impact the communication plan had.


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Design the Roll-Out PlanControl is an essential part of any project roll out. Make sure your project plans have the following components to ensure you’re controlling it instead of the other way around:

1. Team Management: The project managers need to develop skills that create an effi cient production system and a cooperative and effective team culture.

2. Communication Management: This enables interaction between project teams, stakeholders, clients and senior management.

3. Risk Management: This includes strategies and tactics used to identify, avoid and control project risks.

4. Quality Management: Activities and techniques used to ensure that all project activities and work products comply with all relevant standards, procedures and requirements.

5. Time Management: This includes processes and techniques used to ensure the timely completion of each project.

6. Cost Management: This includes processes used to ensure that the projects are completed within the approved budget.

Double check to ensure that the following steps are included in your project implementation:

1. Defi ne Each Project. This section will help the Project Managers start the task of outlining each project. Each project requires a Project Charter with the following components:

• Sponsorship: Who is commissioning the work?

• User Community: Who will use the product? How many users are there?

• Functions: What will the product do? What purpose will it serve?

• Deadline and Other Constraints: When must the project be ready for release?

• Budget: Who is paying for the product?

2. Plan Each Project. Always come equipped with a detailed project plan complete with goals and milestones. Keep your team apprised of problems and progress – change is much less harrowing when people can see where they are headed. Don’t forget a contingency plan – if things aren’t working, you need a well-thought-out backup strategy. Proper planning requires the project manager and sponsors to do the following:

• Create a Work Breakdown Structure. This involves determining in detail all tasks needed to fi nish each project.

• Estimate Task Times Accurately. Time estimates are diffi cult aspects to predict accurately. Unexpected delays and unforeseen aspects of implementation often extend a timeline by over 40%.

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• Create Task Analysis Forms. A Task Analysis Form is used to collect information of the most consequence for your schedule and budget.

• Schedule Each Task (using a Gantt chart or Critical Path Charting). Gantt charts attach work tasks to a calendar, while the Critical Path charts aren’t date specifi c but represent more accurately the task-by-task progression of the project.

• Create a Budget. A budget can only be useful if it is realistic, so make sure your estimates do not turn into a “pie in the sky” piece of work. An unrealistic budget will only create frustration and disappointment among your project teams, multiplying the lack of incentive to complete the projects in a timely manner.

• Staff the Project Team. When selecting members for your project teams, you may have limited options available. Make sure that your selections refl ect the collection of skills needed as well as who is available. If your selection list extends beyond the skill set requirement, make your selections based on individual (or team) track records. This may seem to be a simple point, but it cannot be stressed enough. Selecting teams and team members with proven track records improve the probability of your project being delivered on time and within budget.

• Win Client Approval for the Plan. The fi nal step in planning your projects is obtaining the approval of your clients. Depending upon client demands, the project plans may need revising, but this is essentially the reason for the project plan – better to revise the requirements now than to do it during implementation. The formality of client approval generally depends on the size and complexity of each project. Make sure that the project plans are signed by someone with the authority to approve each project.

Rolling out a full-scale IT strategy can be a large undertaking that required meticulous planning. If you think you’ve covered all the bases, check again, and then check one more time for good measure.

The Rollercoaster of ChangeRegardless of the reasons for change, managers must understand how to conduct change correctly in order to minimize department and company-wide stress during and after implementation.

The effect of change on employees and managers is stressful at the best of times. Make absolutely sure that you convey to your personnel why changes are being made and how they will affect different people’s positions.

The diagram below represents the “highs” and “lows” of the change process as experienced by individuals in a given organization.


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Rollercoaster of Change

• Step 1 – Shock/Denial: When change is announced, personnel will probably respond negatively. Previous change experiences play a large role in the perception amongst personnel of how the change process will play out over the long term. Unfortunately, many change experiences are fraught with stress. Watch for “fi ght or fl ight” responses in personnel, which may manifest as shock, anger, or denial.

• Step 2 – Acknowledge Depression: Pretending that personnel are not experiencing stress brought on by change is dangerous. Organizations involved in a large change process experience higher rates of employee dissatisfaction, lower productivity, and high turnover. Clear two-way communication can mitigate many of change-associated staffi ng losses. Acknowledge the stress, listen to personnel concerns, express empathy, dispel uncertainty, and explain why the change is taking place. Acknowledge the disruption and insecurity change can bring, but also sell the benefi ts for the organization and its employees.

• Step 3 – Hope/Readjustment: As demonstrated by the diagram above, expect a “bottoming out” period. This is the most painful part of the change process. However, shortly after the bottom, things start to improve. People start to become more profi cient with the new way of doing things, and their productivity improves. This gives employees a sense of hope about the future, which creates a virtuous circle of productivity improvement and greater hope.

• Step 4 – Rebuilding: The pieces of the puzzle should all be on the table and how the pieces fi t together increasingly apparent to individuals at all levels of the organization. Delegate tasks so that all staff members are participating in putting the pieces together in order for them to buy in to the new post-change vision. With consistent progress and small successes at the front-end of the project, people will become more comfortable with the concept of change. Establish a rewards system based on success measures to motivate participation.

Change usually has a cultural impact that is often underestimated. Pay close attention to the people factor, communicate clearly and often, and stress the positives of what lies ahead.

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Adjusting Your Current Organizational StructureIf you did the work on the previous pages to assess your optimal organizational structure, you probably had one of two reactions when you saw the results:

• No wonder I never get a break. We don’t have enough people.

• How do we get anything done? We don’t have the mix of skills we need.

Simply put, most IT departments are either staffed inadequately or inappropriately. Take heart in knowing that you are not alone. The important thing to do now is to recognize the situation and determine an action plan for making improvements. Here is what we suggest:

• Conduct performance reviews. Before you make any changes, it is only fair to your staff to provide them with feedback on their performance. If you are behind on completing your performance reviews, get them caught up as soon as possible.

• Make the obvious moves. Chances are that a number of your staff are very competent, but are not currently in positions ideally suited to their skill sets. You run the risk of losing these people if you do not move them into positions where they can use their abilities.

• Get rid of the bad apples. It is probably equally likely that you have some people who are counterproductive to your efforts. There may be a number of reasons that you have held on to them until now, but you should begin planning to replace them. Depending on the nature of the problem and the potential to replace lost skills, your timeline for terminating the ‘bad apples’ should be at most six months.

• Hire to fi ll gaps. Only once you have moved your existing staff into positions that best fi t their skills and terminated employees who do not fi t should you begin hiring to fi ll gaps. Waiting to hire people may feel like you are moving slower than necessary, but you have to be careful to avoid disrupting your current culture. Too many moves too quickly can make everybody paranoid that they are the next to be replaced.

• Train to retain. Now that you have the right mix of people, show them some appreciation by investing in training to keep their skills current – they will repay you with increased loyalty and improved productivity.

• Manage their careers. Let’s face it – managing your people is probably one of the most diffi cult parts of your job, but it is probably also the most important factor in both your and your department’s success. Creating an organizational infrastructure plan for your department, communicating it to your staff, and managing to it will make your department happier and more productive because everyone will know where they stand and where they are headed.

• Adjust the mix. Review your organizational chart quarterly and make adjustments as your needs change.


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Tips For Ongoing IT Strategic Governance

Complete Quarterly Top Executive Investment ReviewsA quarterly review of your projects and investments is essential to guaranteeing the health of your overall strategy.

However, most projects are often treated as independent silo operations. This approach can result in too many projects and too few resources. Governing your projects as a comprehensive portfolio will help you to track projects over the long haul.

Project Portfolio Management (PPM) allows you to collect and control your entire suite of IT projects as a single set of interrelated activities. PPM is based on the same theories as those governing fi nancial investment portfolio management. PPM allows you to:

• Catalog and know what projects are planned and/or already underway.

• Prioritize all projects against strategic business goals.

• Allocate shared resources more effectively and fl exibly.

• Prevent project redundancy and overlap.

One of the fi rst steps you should take is to assign a Project Portfolio Manager. This person will manage the Project Portfolio Master Schedule and be responsible for calling all quarterly meetings of top executives.

The goal of these quarterly meetings, and the Project Portfolio Manager in general, is to identify project winners and loser early, minimize risk, and optimize resource allocation.

Review Utilization OpportunitiesCross-project thinking will help you identify opportunities and risks. If one project falls behind schedule, this could have a ripple effect through all other projects with which it shares resources.

Become aware of the interrelationships and interdependencies between projects that could cause ripple or domino effects in the event of a problem. Look at which projects share common resources, namely staff, and map out risk points and mitigation plans. Similarly, if some resources are being underutilized, you should fi nd new ways to make use of them in other projects.

Identify the following:

1. Underutilized assets that can be deployed elsewhere

2. Over-utilized assets that need to be conserved

3. Ways to improve asset utilization by training, mentoring, and other techniques

Always be vigilant in watching for ways to maximize resource utilization.

Re-establish Project PrioritiesProjects should be re-prioritized as funding and business conditions change.

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1. Catalog all projects: Using a spreadsheet or database, consolidate all project details. For each entry, include the project name, description, goals, estimated costs, established timeframes, and all staff members assigned, including their role and degree of involvement. Make this repository as detailed as possible.

2. Re-prioritize all projects: Project value should directly correlate to organizational objectives. Once these objectives are clear, assign rankings and update your catalog.

• Projects that most closely align with organizational objectives, maximize profi t, and minimize risk are your most important and should receive top ranking.

• Localized cost-cutting projects should be of the lowest priority.

3. Divide your ranked projects into types: Different projects achieve different organizational aims, involve different stakeholders, and often receive funding from different sources. Separating out these projects will help you decide what percent of your budget should be directed at which project types. Label your projects as:

• A utility project (basic necessary maintenance)

• An upgrade project (improvement of the existing technology base)

• A strategic investment project (new endeavor that will bring revenue or increased service). These should receive the highest resource allocation.

4. Make Cuts: The overall health of the portfolio, not individual projects, is your goal. The cuts you make to your portfolio may be dictated by resource availability. Cuts could come in the form of complete cancellation of, or in reduced resource allocation to, low priority projects.

5. Reprioritize Regularly: Projects should be re-prioritized; funds and resources reallocated, and timelines rescheduled on at least a quarterly basis. If you make any changes, add them to your project portfolio repository as soon as they are made. Remember: all changes should be made at the portfolio level, not the project level.

Meet with key stakeholders from sales, marketing, operations, fi nance, IT, and other departments on at least a quarterly basis. If you make any changes, add them to your project portfolio repository as soon as they are made. Remember: all changes must be made at the portfolio level instead of the project level so that the best opportunities from across the organization are pursued.



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ConclusionA good plan today is better than a perfect plan tomorrow. George S. Patton

Congratulations! You now have a methodology and a living document to guide you, your department, and your organization in the strategic application of information technology.

You should now have the support of key stakeholders in your organization, which will make implementing your plan much easier. Keep their support by maintaining an open and continuous dialogue through your IT Steering Committee.

We suggest reviewing your plan and making revisions on an annual basis, unless there is a signifi cant change to your business that requires you to rebuild your plan. If you take enough time to complete this plan properly, once per year should be often enough to ensure that you are changing with the times, but not so often that you are operating reactively.

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About Info-Tech Research Group

Info-Tech Research Group is a research and professional services fi rm focused on providing premium research and advice geared to the unique needs of IT Managers of mid-sized enterprises.

Info-Tech provides practical and thorough solutions that enable IT Managers to bridge the gap between technology and business. Our web publications, reports, methodologies, education, and consulting services help IT professionals across North America and the U.K. to stay current, effectively manage people and technology, and achieve professional success.

Strategic IT Planning and Governance:Info-Tech’s Step-By-Step Consulting Methodology

Authors

• John Sloan, Research Analyst

Contributors:

• Davin Juusola, Vice President,

• Jason Livingstone, Research Manager,

• Joel McLean, CEO.

For more information about the Info-Tech Research Group, and how we might help you, see our Web site at http://www.infotech.com.

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