The Eight Building Blocks of an Application Strategy

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The Eight Building Blocks of an Application Strategy

Summary

Often, application strategies just evolve by happenstance, but they shouldn't. There are eight key

components that all good application strategies must contain, so successful organizations must be aware of

them.

Overview

Organizations often have an application strategy and don't even know it. This research looks at the key

components that all application strategies should have in place.

Key Findings

An application strategy is a plan to achieve a business outcome via the use of technology.

Application strategies have eight components, or building blocks.

Successful organizations manage these building blocks to create the strongest strategy to meet their

objectives.

Recommendations

Understand the eight building blocks of an application strategy to align business outcomes with IT

capabilities.

Continuously work on building your strategy the process does not happen once and is then over it is

iterative. The more you work at it, the better it will become.

Analysis

Every organization has an application strategy, whether it realizes it or not. In the early stages, it is actually

more a collection of "the way we do things" rather than a comprehensive strategy. But over time, it evolves,

and becomes more structured and more recognizable.

Gartner defines an application strategy as "a plan to achieve a business outcome via the use of technology,

where the result is recognized to be the optimum balance between the conflicting requirements of

stakeholders." In other words, it refers to having a strategy of how to use technology to achieve business

goals. No two application strategies look the same, because no two companies are the same. And to make it

even more difficult, often no one is directly responsible for the application strategy per se, although the office

of the CIO eventually emerges as having that responsibility.

There are eight building blocks to developing an application strategy:


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Understand the internal culture and bias.

Articulate a technology vision.

Align the business and IT strategy.

Analyze stakeholder alignment.

Create a governance model to improve organizational alignment.

Create process integrity.

Develop an IT plan.

Create an information/data strategy.

If we look at each building block in more detail, then we can begin to understand the dynamics of what is

happening in organizations, regardless of size, industry or geography.

Culture/Bias

Many organizations have developed a culture that is biased when it comes to making IT decisions. It has

simply become the way they approach these decisions. Some examples of IT cultural bias include deciding

that all applications (or data) must be in house and on premises, or having a preference for leading-edge

applications, or waiting until applications/technology become mainstream. Other examples include the

organization's commitment to a particular vendor ecosystem, deciding to outsource applications or

processes, or having a preference with regard to buying intellectual property (IP) vs. viewing internal IP as

an asset that must be protected.

Technology Vision

A key element of an application strategy revolves around the vision an enterprise has for the role technology

will play in the organization. Is the IT organization a strategic enabler? Is it designed to provide a competitive

edge or is it a necessary evil? Is the role of the IT organization to provide operational efficiency? Is the key

driver architectural purity?

Business and IT Strategy Alignment

If the role of an application strategy is to achieve a business outcome with technology, then how well does

each side of the organization the business side and the IT side understand the other, and how do they

align their strategies? This would include areas such as the CRM, ERP or supply chain management

strategy. This also is important to ensure that corporatewide strategies aren't being solved with departmental

initiatives. Understand that enterprise business strategies need enterprise architectures. If the IT

organization can't answer what the desired business outcome is, then it will be hard to align the two

strategies.

Stakeholder Alignment

An application strategy tries to create a balance between the conflicting requirements of stakeholders. As

such, does the organization know who all the stakeholders are employees, customers, suppliers, partners


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and analysts? Organizations need to be able to ID, understand, and reconcile who the stakeholders are and

what they want and need.

Organizational Alignment/Governance

Application strategies are about people as much as they are about technology. The inevitable presence of

organizational silos creates ownership issues (an example is the question in organizations of who owns the

customer). To be successful, organizations must pay attention to the governance model (defined as "a set of

policies, procedures, and rules that define decisions and decision rights in an application organization"), and

have proper business and IT leadership. The issue of training is important as well. Some application strategy

decisions will be curtailed by an inability to properly handle the training needs of the organization. As such,

organizations need to be honest with regard to how good they are at training.

Process Integrity/Centricity

The key to proper IT and business user alignment is in the area of processes. Is there a process centricity in

the organization? Can the organization ID, document, redesign and optimize processes, or does it just takebroken processes and add technology to them doing the same things as before, only faster? Processes

are important enterprisewide and at a departmental level. This also reflects the organization's ability with

regard to change management.

IT Plan

In the early stages of an application strategy, organizations just buy solutions and install them. But over time,

an IT plan will emerge. This will include areas such as portfolio management, life cycle management,

upgrade strategy, alternative delivery models, tactical vs. strategic decision making, and the organization's

middleware plan. Also important is a plan with regard to key technologies, such as service-oriented

architecture and Web 2.0. Does the organization plan to solve future needs with packaged applications vs.

homegrown applications? The answer is reflected in the organization's application development capabilities

and integration capabilities.

Information/Data Strategy

Master data management is a key component of an organization's ability to leverage technology. What is the

organization's view and needs with regard to privacy? Does it have a data capture strategy? What are the

relevant regulatory issues? What is the current quality of the data?

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The Eight Building Blocks of an Application Strategy