Strategic IT Planning and Governance Info-Tech’ Info-T ech’ss Step-By-Step Consulting Methodology
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Strategic IT Planning and Governance
Copyright © 2004 by Info-Tech Research 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. review. P U O R G H C R A E
rinted in Canada First edition: January 2004 Cataloguing in Publication Data nfo- ech Res Research earch Group Group,, 20042004trateg tra tegic ic I Pla Planni nning ng and and Gove Governanc rnancee
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Strategic IT Planning and Governance Info-Tech’ Info-T ech’ss Step-By-St Step-By-Step ep Consulting Methodology In the modern organization, Information Technology (IT) plays an increasingly important role in enabling all all business processes. processes. I has become everybody’s everybody’s business and the the proper management of IT across the enterprise can substantially boost competitiveness. competitiveness. This step-bystep methodology will w ill help you create the mechanisms for making IT decisions at the strategic level.
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Here are some examples of the kinds of questions that this methodology methodology will help you answer: •
How Do You Prioritize Big IT Projects? Project s? 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 g reen-light an expensive project, sometimes they have to choose between several big ticket projects all vying for the same scarce resources. his 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 technolog y. Making outsourcing decisions in a strategic context will lead to smarter and more efcient IT. IT.
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What Are Your Organizational IT Standards? With most or all of your departments using I for competiti competitive ve advantage advantage,, platform platform standards standards cannot cannot simply simply be a case of hat’ss good for the IT department. Standards and procedures hat’ pro cedures should be approved through an organizational governance process.
Info-Tech Research Research Group believes the top IT manager in the organization (whether he or she is a Chief Information Ofcer, Information Systems Manager, or Information Technology Technology Manager) should play a lead role in the development development of a plan for the strategic use of Information Tec Technology. hnology. This guide is written from an IT management point of view view.. In eight concise stages, we show how IT managers can launch and manage a strategic IT process within their organizations. We 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 difculties with this guide, or with the accompanying CD-ROM, please feel free to contact us at: nfo-Tech Research Group 602 Queens Avenue P U O R G
London, N6B 1Y8ON el: 519-432-3550 Fax: 519-432-2506 oll-Free: 888-670-8889 Or visit us online a www www.infotech.com .infotech.com
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Table Of Contents Introduction............... Introduction.. ......................... ......................... .......................... ........................ ........................ .......................... .......................... ................ ... 9 Aligning IT With Business Business Goals.............. Goals........................... .......................... .......................... ......................14 .........14 Scope, Competen Competencies, cies, Governan Governance ce ............. ......................... ......................... .......................... .................. .....15 15 The Importan Importance ce of Governan Governance ce............. .......................... .......................... .......................... ........................16 ...........16
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The Agility Paradox......... Paradox...................... .......................... .......................... .......................... ........................ .....................17 ..........17
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How This Methodo Methodology logy Works: Works:............ ......................... .......................... .......................... ......................... .............. 19
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Stage 1> Plan the Plan ............ ......................... .......................... .......................... ......................... ........................ ......................21 ..........21 Step 1: Set Strategic Planning Goals. ............ ........................ ......................... .......................... ................ ...22 22 Step 2: Establish a Planning Group............................... Group............................................ ..........................25 .............25 Step 3: Hold a Kick-off Meeting ............. .......................... .......................... .......................... ........................27 ...........27
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Step 4: Create a Preliminary Report................................ Report............................................. ........................28 ...........28 Stage Summary....................... Summary.................................... .......................... .......................... ........................ ........................ ............... 30 Background Backgrou nd > Making the Case for Strategic IT Planning............................ Planning.............................. 31
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The Most Important Constituent: Constituent: Senior Manage Management ment............ ......................... ................ ...32 32
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The Importan Importance ce of Communica Communication........ tion..................... .......................... .......................... ........................33 ...........33
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More Notes on Agility............. Agility......................... ......................... .......................... ......................... ........................ ................ ....35 35 Co-opting the Power User .................................. ............................................... .......................... ........................36 ...........36
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Stage 2> Document Your Business Strategy............. Strategy.......................... .......................... ........................39 ...........39
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Step 1: Describe the Company and Its Background............................. Background................................ ...42 42 Step 2: Conduct an Industry Analysis.............................. Analysis........................................... ........................43 ...........43
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Step 3: Document Vision, Mission, and Core Values Values ............ ........................ .................. ......44 44 Step 4: Dene Core Business and Its Boundarie Boundaries s ................................. ................................... 45 Step 5: Create a Financial Picture........... Picture ........................ .......................... .......................... ......................46 .........46 Step 6: List Strategic Objectives................................ Objectives............................................. ......................... ................. .....47 47 Stage Summary....................... Summary.................................... .......................... .......................... ........................ ........................ ............... 48 ........ .... ......... ......... ........ ......... ......... ........ ......... ......... ........ ....... ... 9 A Company’s Company’s Value Value Chain Chain ............. .......................... .......................... .......................... ........................ ...................49 ........49 The Supply Chain ............. .......................... .......................... .......................... ........................ ........................ .....................51 ........51
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Industry Lifecycles ............ ......................... .......................... .......................... ......................... ........................ ....................52 ........52 Porter’s Five Forces Model............ Model......................... .......................... ......................... ......................... ....................54 .......54 Environmental Environmen tal Analysis (PEST)............. (PEST).......................... .......................... .......................... ........................55 ...........55 Identify Your Your Organizat Organization’s ion’s Core Competen Competencies cies ............. .......................... .......................55 ..........55 Key Success Factors Factors............ ......................... .......................... .......................... ......................... ........................ ................ ....57 57 P U
Stage 3> Assess the Current IT Situation ........... ........................ .......................... .......................... .................. .....59 59
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Step 1: Document Your Your IT Organizatio Organizational nal Infrastructure............. Infrastructure .........................62 ............62
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Step 2: Document Your Hardware and Software Infrastructure...............63
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Step 3: Audit Current IT Projects ............. .......................... .......................... .......................... ......................64 .........64
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Step 4: Understan Understand d the IT Environme Environment nt .............................. ........................................... ....................66 .......66 Stage Summary....................... Summary.................................... .......................... .......................... ........................ ....................... .............. .. 68 ac grou groun n >
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sse s....... s........... ........ ........ ........ ........ ........ ......... ......... ........ ........ ......... ......... ........ ........ ...... 69
Thoughts on Stafng Needs ............ ......................... .......................... .......................... ......................... ................. .....69 69 Skills Developme Development nt ............. .......................... .......................... .......................... ........................ ........................ ................... ......70 70
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Business Benets of Asset Manage Management ment ............. .......................... .......................... ......................70 .........70 Rolling Out an Asset Management Initiative............. Initiative .......................... .......................... .................. .....71 71 Conducting Conductin g a Hardware Asset Inventory ............ ......................... ......................... ........................73 ............73 Conducting Conductin g a Software Asset Inventory....... Inventory.................... .......................... .......................... .................. .....75 75
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Change Managem Management ent ........... ........................ .......................... .......................... .......................... .......................... ............... .. 76
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Asset Management Management Best Practices................... Practices................................ .......................... ......................... .............. 78
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Understanding Understan ding the IT Environme Environment nt ............ ......................... .......................... .......................... ....................79 .......79
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Stage 4: Propose a New IT Situation ............. .......................... .......................... .......................... ........................81 ...........81
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Step 1: Analyze IT Strengths and Weaknesses .............................. ......................................83 ........83
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Step 2: Brainstorm Technolog Technology y Opportun Opportunities ities ............ ......................... .......................... ................ ...86 86 Step 3: Document Your Results....... Results.................... ......................... ......................... .......................... .................. .....88 88 Stage Summary....................... Summary.................................... .......................... .......................... ........................ ....................... .............. .. 90 ac gro groun un >
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ra ns orm ng. ng.... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... ..
Brainstorm of One (Brainwriting (Brainwriting)) ............. .......................... .......................... .......................... ......................92 .........92
Stage 5: Perform a Gap Analysis ............. .......................... .......................... .......................... ........................ ................. ......93 93 Step 1: Analyze Alignment Alignment Gaps. ............ ......................... .......................... .......................... ......................95 .........95 Page 6
Step 2: Analyze Infrastruct Infrastructure ure Gaps..................... Gaps.................................. .......................... ......................96 .........96 Step 3: Summarize and Resolve Gaps.......................... Gaps....................................... ......................... .............. 97 Stage Summary....................... Summary.................................... .......................... .......................... ........................ ........................ ............... 98 Stage 6: Propose a Strategic Vision Vision and Governance Model ............. .......................99 ..........99 Step 1: Hold a Vision Meeting With Stakeholders Stakeholders ............ ......................... .....................101 ........101 Step 2: Establish a Strategic IT Vision..... Vision.................. .......................... .......................... ....................102 .......102
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Step 3: Propose a Governan Governance ce Structure.................................. Structure..............................................103 ............103
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Stage Summary....................... Summary.................................... .......................... .......................... ........................ .......................104 ............104
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Background Backgrou nd > One Vision for All....................... All.................................... .......................... ......................... ................. ..... Reigning In Rogue IT..................... IT.................................. .......................... .......................... ........................ ................. ......106 106 Building Your Steering Committee............. Committee.......................... .......................... .......................... .................. .....109 109
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Stage 7: Build a Strategic Decision Making Making Framework ............. .......................... ................ ... 11 111 1
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Step 1: Set Strategic Goals and Measures ............................... ........................................... ............ 113
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Step 2: Perform a Budget Analysis.............................. Analysis........................................... ......................... .............. 116 Step 3: Identify Your Options........................ Options..................................... .......................... .......................... ............... .. 117
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Step 4: Prioritize Your Projects ............ ......................... .......................... .......................... ........................120 ...........120 Stage Summary....................... Summary.................................... .......................... .......................... ........................ .......................124 ............124
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Background Backgrou nd > Typ Types es of Goals IT Should Set............................. Set.......................................... .................. .....125 125
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Financial ............. .......................... .......................... ......................... ........................ ........................ ......................... .....................125 ........125
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Organizational Organizatio nal Goals ............. ......................... ......................... .......................... ......................... ........................ .............. .. 126
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Technolog echnology y Operation Operations s ............ ........................ ......................... .......................... .......................... ........................128 ...........128 Customer Service Goals................ Goals............................. .......................... .......................... ........................ ................. ......129 129 IT Governan Governance ce Goals...... Goals................... .......................... .......................... .......................... ........................ ...................130 ........130 Getting Buy-In for Your Goals................... Goals............................... ......................... .......................... ....................131 .......131 Using Your Your Budget as a Managem Management ent Tool Tool ............ ......................... .......................... .................. .....132 132 Dealing with Budget Cuts ................................... ................................................ .......................... ......................133 .........133 Stage 8: Publish, Promote, Maintain Your Your Strategy ............ ......................... .........................135 ............135 Step 1: Build Your Your Strategic Plan Materials ............ ......................... .......................... .................. .....137 137 Step 2: Present Your Plan to Senior Manageme Management nt ........... ........................ .....................138 ........138
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Step 3: Communicate and Manage Change .........................................139 Stage Summary....................... Summary.................................... .......................... .......................... ........................ .......................141 ............141 Background> Backgrou nd> A Guide to Killer Boardroom Presentations........................... Presentations...........................142 142 Guide to Developing a Communica Communications tions Plan ............ ......................... .......................... ............... 143 Design the Roll-Out Plan ............. .......................... ......................... ......................... ......................... ....................146 ........146 P U O
The Rollercoas Rollercoaster ter of Change........... Change........................ .......................... .......................... ......................... ............... ...147 147 Adjusting Your Current Organizat Organizational ional Structure..................... Structure.................................. ............... 149 Tips For Ongoing IT Strategic Governance ............ ......................... .......................... .................. .....150 150
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Conclusion................................. Conclusion.................... .......................... .......................... ........................ ....................... ......................... .....................152 ........152
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Introduction Establishing a strategic planning process and governance model for Information echnology echnol ogy (I ) is criti critically cally importa important nt for for making sound IT investment decisions, garnerin garne ringg support support for I pro projec jects ts,, and proving IT is a strategic strategic asset of the organization. Strategic planning is about building consensus, both on strategic goals and on a framework for making strategic decisions.
Why Strategic IT Planning? In a late 2002 2002 survey, survey, Info- ech Resear Research ch Group Group aske as ked d I ma mana nager gerss how how much much Str Strat ateg egic ic I Planning impacted the overall competitiveness competitiveness of their organizations. he majority conrmed that strategic planning did have an impact on increasing
competitiveness.
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This st This step ep-b -byy-st step ep gui guide de takes you through the stages Here are some of the consequences of not having an of establishing an IT Steering established IT strategy: Committee and building a Strategic I Pla Plan. n. he gui guide de als also o inc includ ludes es ncreased risk of project failure due to ü helpful background articles. a lack of understanding of, or support support
3. A rep repor ortt temp templa late te pon which you can buil build d your your Strat Strategi egicc I Plan document. This will be a living document subject to annual review and updating.
Specically, the Methodology Specically, Methodolog y breaks into eight stages. By following the steps in each each of the stages listed below, below, you will build
o, your organization’s overall business strategies.
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eactive, rather than proactive, echnology decisions, leading to ew opport opportuni unitie tiess to make make your your I epartment a competitiv competitivee weapon.
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nconsistent systems purchases and additional costs incurred as a result of unplanned purchases.
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Limited participation of IT in the rganization’s strategic planning process because becau se of a lack of under understand standing ing of business strategy and IT’s role in the rganization’s future.
an I strat strategy egy,, which which aligns aligns well with your your organization’ss business strategy and lays the foundation for on-going strategic decision-making. organization’ decision-making.
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through this process:
2. A col colle lect ctio ion n of of to tool olss and and templates that you will use for information gathering and analysis throughout the Strategic IT Planning process. hese tools are available as both individual les, and are compiled into a printable Workbook, W orkbook, on your CD ROM.
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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
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Stage 1> P an t e P an Strategic planning is not just a task, it is is a process. process. he 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. •
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tep 1: Set when Strategic Planning Goals. Start by answering the question, “What Strategic?” it comes to I projects, processes, and investments. investm ents. Work up aislist list of bjectives for the strategic IT planning project. tep 2: Establish a Planning Group. List all the the major major I stak stakehold eholders ers in in the enterprise. Select for your planning team a group g roup that can work productively on building he plan and then on championing the results across the organization. A truly open and effective process begins with a well-rounded working group.
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tep 3: Hold A Kick-Off Meeting Meeting.. Review the steps steps of this methodology with the steering committee and set a preliminary time frame. Your timetable should establish omentum and a sense of urgency urgency.. Be aggressive agg ressive but realistic with your deadlines. deadlines. tep 4: Create a Preliminary Report. Make sure you have the full support and
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cooperation of senior management before you proceed. Put together a preliminary project description report. Include the overall goals, g oals, the steps that will be taken, the time rame, and any other preliminary cost estimates you have. Present this report to senior anagers and get their sign-off.
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Stage 2> Document Your Your Business Strategy Strate gy You can’t can’t hope to align your IT strategy with the business strategy of the organization if you can’t rst demonstrate demonstrate a clear understanding of that strategy. In this stage you will analyze your rganization; background, mission and core values. The culmination of your analysis should be a succinct set of well-dened corporate objectives. objectives.
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got to where it is today. today. Look at your history in terms of dates and growth milestones, ut also in terms of past challenges that have been overcome. overcome. Put together a reasonably etailed description of your organization. Can you describe your organization’ org anization’ss overall purpose?
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tep 1: Describe the Company and Its Background. Analyze how your organization
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tep 2: Conduct an Industry Analysis. An analysis of the industries in which your rganization operates will provide a deeper context con text to your current strategic mission and key objectives. Use these analysis tools, as well as the theory theo ry contained in the ackground section, to better understand your industry. tep 3: Document Vision, Mission, and Core Values. Document your organization’ organization’ss ission and vision statements and list your core values. Your Your organization mission statement should answer three equally important questions: Why do we exist? Whom do e serve? What do we produce?
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Step 4: Dene Core Business and Its Boundaries. Examine your organization’ organization’ss core competencies. What makes you special and different? Once you have dened your core business, determine what customers, channels, channels, and competitors are within those boundaries. •
Step 5: Create a Financial Picture. Gather up-to-date 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. objectives. These are the specic strategic objectives that you hope our I str strate ategy gy will will ali align gn with with..
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Stage 3> Assess the Current IT Situation Take a hard look at your current IT situation. situation. Completing this section will help you identify the IT areas where the enterprise should should focus investment. investment. Before plans can be made about the future of the IT organization, the current cur rent state must be understood. You can’t can’t manage what you don’t know you have.
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Step Your IT Organizational Infrastructure. Prepare an organizational chart 1: ofDocument your IT department. This should include functional areas like network netw ork support, programmers, and business b usiness analysts. Step 2: Document Your Hardware and Software Infrastructure. Identify and document your physical infrastructure. Without a rm understanding 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 fo r the future. Dening the projects currently being orked on by the IT department depar tment will help you understand whether IT is aligned with the overall goals of your business.
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Step 4: 4: Underst Understand and the the I En Envir vironm onment ent.. Analyze the trends in your industry and the actions of your competitors. Look Look at industry trends and create competitor proles.
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Stage 4> Propose a New IT Situation World-class IT departments are forward-looking and proactive. Creating an IT plan that only World-class addresses your organization’ organization’s current needs has limited value in the long run. his stage will help help you envision the future of IT in your organization. •
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Step 1: Analyze IT Strengths S trengths and Weaknesses. evi eview ew your your curre current nt I sit situat uation ion asking tough questions about performance, perfor mance, alignment, and goal setting. Compare your current governance practice (if you have any) to an industry maturity model. Conduct an analysis analys is of current strengths strengths,, weaknesses weaknesses,, opportunities opportunities and threats threats (SWO (SWO ).
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tep 2: Brainstorm Technology Opportunities. Hold a brainstorming meeting (or eetings) involving your strategic planning group as well as IT staff, senior managers, line managers, power users, and special applications users. users. Formulate a set of key uestions to get the mental wheels turning. •
tep 3: Document Your Results. Document your nal recommendations for the uture as approved by your planning group. Use diagrams and charts as much as possible
and remember to continually relate your recommendations recommendations to the business goals of the enterprise.
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Stage 5> Perform a Gap Analysis Compare your current I situa Compare situation tion to the proposed proposed situation situation you developed developed in the previous previous stage. By taking a detailed account of what you will need in the future and then matching matching it against your current infrastructure, infrastr ucture, you will be able to create a roadmap for the future. tep 1: Analyze Alignment Gaps. eview the results of “Stage 2: Document Your Business Strategy” and “Stage 3: Assess the Current IT Situation” in the context of the our quadrant strategic alignment model.
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tep 2: Infrastructure Assess the IT requirements of the projects and areas of Analyze investment you identied identiedGaps. in “Stage 4: Propose a New IT Situation”. Look at here current IT systems and skills sets do and do not fulll those requirements. tep 3: Summarize and Resolve Gaps. Put together a summary of the gaps identied in both Step 1 and and Step 2 and chart chart the implica implications tions for for your I strat strategy egy of addre addressing ssing hose gaps.
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Stage 6> Propose a Strategic Vision and Governance Model With a rm grasp of your organization’s organization’s business objectives and the ways ways that IT can enable hem, now is a good time time to establish establish a top level vision vision and mission mission for your your I departm department. ent. •
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tep 1: Hold a Vision Meeting With Stakeholders. S takeholders. Describe what needs to be done o achieve the future IT situation documented in Stage 4. Y Your our I core values represent he standard standard axioms axioms by which which I is applied applied across across the organizatio organization. n. Simil Similar ar to the core core values you documented for your your organization, as a whole, strategic IT core values are the set of belie beliefs fs or philosophie philosophiess that guide guide strategic strategic I decis decisions ions.. tep 2: Establish a Strategic IT Vision. Use the guidelines for the organization vision statement state ment in Stage Stage 2 when preparing the the vision stateme statement nt for corporate corporate I . tep 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 g roup that draws a line from vision and objectives to specic actions.
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Stag St age e 7> Bu Buii
a Str Strat ateg egic ic De Deci cisi sio on Ma Ma in ing g Fra Fram mew ewor or
ranslate your strategy into some tactical and operational goals. Now that you have identied the gap between where you are and where you want to be, the next n ext 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 by setting som–eSet some clear goals the IT–department. Thissome takes the work work did inaction the previous prev ious stage stage Your Your I for Strategy Strat egy and turns it into som e actionable actiona bleyou objectives for the upcoming year. Step 2: Perform a Budget Analysis. Goal setting and measurement are only two steps of the cycle. cycle. The last step step is budgeting budgeting future performance levels. levels. After you have gathered some actual information, infor mation, budgeting next year’s information becomes much easier. •
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Step 3: Identify I dentify Your Your Options. Begin identifying your options by taking a very high level approach. Using your gap analysis from Section Section 6, group together functions that you think can be fullled by a type of application.
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Step 4: Prioritize Your Projects. Use a three-tier approach to prioritizing your projects.
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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:
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nfonf o-T Tec ech h Proj Projec ectt Mat Matri rixx
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nfo- ech Priority Index
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Stage 8> Publish, Promote, and Maintain Your Your Strategy The main deliverable of this process is a trategic IT Plan that provides a specic vision
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and goals goals for I in your your organizat organization, ion, a ratio rational nal for for prioriti prioritizatio zation n of current I projec projects, ts, 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 Str Strate ategic gic I Pla Plan n template to bring together all of the elements you have created 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 its ofcial approval. Step 3: Communicate and Manage Change. If your planning process has been open and broadly based, the completed plan should not no t be a surprise to anybody. However, However, it is still important to develop a communications plan to ensure that all stakeholders are
fully aware of the plan’s plan’s contents and implications.
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Aligning IT With Business Goals Strate Stra tegi gicc P ann nnin ing g an Alignment n o- ec P U O R G H C
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roups ro ups st stra ratteg c p ann ng sur urvvey
found that vastsaw majo of organizations that did trategic trat egic plathe planning nning samajority w anrity impro improveme vement nt in business/I busin ess/I alignment.
Any resource expended in an activity that oes not advance either the strategic goals f the organization, or the functional functional equirements of other units in their uest to meet key business goals, is a asted resource. Pursuing alignment is an exercise in efciency. T/Business strategy alignment has een talked about in business studies or 20 years. In a 1993 IBM Business Journal Article, J.C. J.C. Henderson and N. N. Venkatraman V enkatraman proposed a theoretical odel for Strategic Alignment. A number f management researchers have have further ened the model and applied it to a range f industries.
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IT/Business Alignment Model contains four main interrelated domains. Each Each of these The areas contains three interrelated subomains. Graphically, Graphically, the IT/Business alignment model looks like this:
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ach of the four quadrants of the business alignment model must integrate with the other uadrants. Vertical Vertical integration is called strategic t; horizontal integration is called functional integration. So, for example, your information technology infrastructure needs to be accountable o both the overall overall strategi strategicc goals of I (stra (strategic tegic t) t) while also also being able to help help individual individual business units realize their individual strategic goals (functional integration). Page 14
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Scope, Competencies, Governance An information technology technolog y strategic planning process needs to focus primarily on the Information echnology Strategy quadrant of the alignment model. he Information Technology Tec hnology Strategy Strateg y quadrant includes:
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Technology Scope: The key technologies that support the current business scope Technology as well as the technologies that enable new opportunities. oppor tunities. Plan Strategy and Infrastructure Concurrently
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Governance: How authority and responsibility for decisions is shared between IT and business partners. How project priorities are established.
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Structure: riorities, policies and choices that bring together tog ether applications, software, networks,
Processes: he proce procedur dures es for for mana managin gingg I infrastructure as well as practices for developing and maintaining applications. Skills: Human resources practices and issues specic to building an effective IT department.
If a well-articulated business business plan and a technology infrastructure plan are in place or under development, work on the Strategic I Plan will be that much easier. easier. However,, in the event they are not, this methodology However
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Plan Strategy and Infrastructure Conc Co ncur urre rent nt y It is strongly recommended that ourr n ra ou rast struc ructu ture re p an ann n ng initiative be undertaken concurrently with your strategic p an ann n ng ng.. hink of it as a conversation etwe et ween en t e stee steerr ng com comm m tt ttee ee,, w c s sett ng strateg c pr or t es and represents the whole enterprise, and the I dep departm artment ent tha thatt must mu st ar artt cu at atee t e n ra rast stru ruct ctur uree requirements and the specic projects that will realize strategic goaa s. go Further information/discussion of t e a gnment mo e ca can e o un un in the background section for Stage 1: Plan the Plan.
contains tools for roughing in some working denitions of your business and infrastructure strategies. In essence, your efforts will drive development in these important areas.
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O
G
hardware platform. and data management into a cohesive
•
U
Systemic Competencies: Vital characteristics and strengths of informat information ion technology technology that provide advantages to the organization.
Your strategic strategic I 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 Tec hnology Infrastructure. Infrastr ucture. Business strategy strategy also focuses on scope, governance, and core competencies as these apply to the whole enterprise. Infrastructure planning should focus on the following: •
P
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Strategic IT Planning and Governance
The Importance of Governance The term “IT Governance” refers to formal for mal high level processes and structures for IT strategic planning, prioritization, decision making and performance measurement. By having these formal processes proces ses and structures structures – such such as I strat strategy egy and steering steering groups – the organization organization can can better: •
P
Transform high level strategic goals into actual IT projects. projects.
U
stablish procedures stablish procedures for prioritizin prioritizingg I projec projects ts that are understood understood and supported supported by all senior managers.
O R G H C R A E
By “high level” we mean that these processes and structures str uctures extend beyond managing the IT epartment to address strategic IT issues across the entire enterprise. As they impact the entire rganization they demand wider involvement and particularly the the participation and support of senior management. n “An “An Holistic Approach to IT Governance”, Harvard Har vard Business School Professor Charles opper notes that formal for mal 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.
S E R
Align IT strategy with the business strategy
enior manage enior managers rs will will need need to accep acceptt formal formal respon responsib sibili ility ty for stra strategi tegicc decisi decisions ons egarding information technology, through an existing management committee or, if ecessary,, through a dedicated IT steering committee. ecessary
2. Agreed-on Agreed-on processes processes need need to be develo developed ped to identify identify the decisions decisions to be made made o collect, analyze, and disseminate the data needed for informed infor med decisions, and to make and communicate the decisions decisions..
H C E
3.
enior manag enior managers ers nee need d to to be be invo involve lved d on on a regu regular lar bas basis. is. he business world at he turn of the millennium is too dynamic for a strategy to be implemented by remote control.
T ~
While being as exible as possible, it is still important important to establish agreed upon processes and structures for strategic planning, prioritization, decision making and performance measurement.
O F N I
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Methodology Overview Spreadsheet This spreadsheet, located on the CD-ROM, will help you you assess the amount of work that needs to be done to complete this methodology. Completing 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, however, you may have already already completed much much of this work as part of other projects. In In these cases you can check off the steps as done and signicantly reduce the estimated hours it will take to complete your objectives objectives..
P U O R G H C R A E S E R H C E T
The Agility Paradox The faster things change, the harder it is to develop a strategic plan. Yet Yet the faster things change, the greater the need for strategic direction. direction. his is the agility paradox. You can take the the rst steps towards greater agility by developing a more exible strategic planning process for your organization.
Planning, Not the Plan Start with the following proposition: t’s not about the plan . You 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, iterative, real-time process of alignment and execution.
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nstead of thinking of your strategic plan as a reactive, reactive, stagnant annual document, 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 ongoing competitive advantage.
P U O R G H C R A
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, slow, too rigid, and too reactionary reactionar y. A McKinsey report re port involving 80 companies characterized the annual strategic process as, “ritualized, politicized, and f little value.” value.” •
Traditional models focus more on the bottom line and on making quarterly numbers Traditional han on innovation and real-time response to the market. hey depend on predictable future outcomes, linear forecasting, and the extrapolation f historical data, thus failing to anticipate change. Traditional Traditi onal plans are often out-of-date before they are even fully conceived, and planners are forced toadvantage wait until have the next planning cycle to react. By this point, windows of competitive already been lost.
E S E R
he moments of stability normally experienced between between cycles of change have become shorter and shorter, to the point where wh ere change is constant. Faster business cycles, rapidly advancing echnologies, and expanding elds of competition, the threat of external change is much greater. greater. The need for an agile strategic planning process is real.
H C E
Agi ity Tips
T ~ O F
Each step in this methodology is necessary for the creation of a workable strategic governance practice. In addition to the formal for mal processes laid out in this document, we add “agility tips” – suggestions sugg estions on how you might achieve each stage in a more informal infor mal and timely fashion.
N I
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How This Methodology Works Below is is a brief explan explanation ation of how the methodology is laid out, and what you can expect to encounter in each section. You have have been provided with a hard copy of the methodology methodology and background sections. he 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. he electronic version will save you time time in completing most stages and makes it easier to make make changes during the process. Contents of the CD-ROM are designed for use on PC platforms using Microsoft Ofce software (Microsoft Word, Excel and PowerPoint PowerPoint viewers are available on the CD-ROM in the “Viewers” folder for accessing les without Ofce software). If If the CD-ROM does not install automatically,, you can access the contents by exploring your CD-ROM drive. automatically
P U O R G H C R A E
Each Stage in the methodology methodolog y is broken down into Steps, which include the following sections: •
•
Objectives: Each step has objectives. Reading Reading these objectives will help you nail down the purpose of each step and will give you direction. direction. What You Need to Do: This section contains the action steps that you need to take in order to complete the the objectives. objectives. hese sections are the “meat” of this methodology and will guide you through the process in an easy-to-follow, 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. •
•
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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 nal report. repo rt. All workbook documents are in Microsoft Word, Excel, and PowerPoint PowerPoint format. for mat. Workbook Workbook documents can be accessed from the electronic version of the methodology through the hyperlinks within specic action s ep epss.
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Strategic IT Planning and Governance
When you insert the CD into your computer, the electronic version 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 les and interactive tools will be saved by default to their original location on your hard drive. We We strongly recommend that you create a Strategic IT Planning older on a backed-up network drive and save all of your work there. Please Note: While we refer to the business or com any , and in many cases relate stages or steps P U
o business situations, this methodology methodology is equally applicable to any type of for-prot, nonprot, or government organization. This terminology was used purely for consistency and to facilitate reading ease.
O R G H C R A E S E R H C E T ~ O F N I
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Stage 1> Plan the Plan Every moment spent planning planning saves three to four in execution. execution.
Strategic planning is not just a task. It is a process. The better planned
Stage
1
the process, the better the vehicle results. between A strategic process is organization. also a crucial communications IT planning and the rest of the An open and inclusive process will lead to a better plan, increased understanding by all, and closer alignment of corporate and IT strategy. strategy.
P U O
In this stage you will establish the who, who, what, when and why of your strategic planning process. You will will establish who the stakehold stakeholders ers are in in your strategi strategicc I plan and establi establish sh a planning committee to include those stakeholders in the process. •
You and your your committee will review the steps of this methodology and determine what will need to be done specic to your circumstances and establish when each stage should be completed.
R G H C R
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 green light for the entire process to commence.
A E S
Step 1 – Set Strategic Planning Goals Start by answering answering the question, “What is Strategic?” when it comes to I projects, processes, and investments. investments. The answer to this question will help h elp set the scope for the Strategic IT Plan. Work W ork up a list of objectives for the strategic IT planning project. Identify areas where key key steps have already been taken as well as areas that will require more work.
Step 2 – Esta is a P anning Group List all the major I stakeholders in the enterprise. Select for your your planning team a group that can work productively on building the plan and then on championing the results across the organization. A truly tr uly open and effective process begins with a well-rounded working group. g roup.
E R H C E T ~ O F
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 urgency.. Be aggressive agg ressive but realistic with your deadlines.
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Step 4 – Create Create a Pre Pre iminar iminary y Report Make sure you have have the full support and cooperation of senior management before you proceed. ut together a preliminary project description report. Include the overall goals, the steps that will be taken, the time frame, and any other preliminary preliminar y cost estimates you have. Present this report o senior managers and get their sign-off.
P U
In T is Stage
O
Stage 1 > Plan the Plan...................... Plan................................... .......................... ......................... ........................ ........................ .............. 21
R
Step 1 – Set Strategic Planning Goals ........... ........................ .......................... .......................... ............... .. 23
G
Step 2 – Establish a Planning Group................... Group................................ .......................... ....................... .......... 25
Step 3 – Hold a Kick Off Meeting ............................ ......................................... .......................... ................... ...... 27
H
Step 4 – Create a Preliminary Report............................... Report............................................ ....................... .......... 28
C
Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ ...................... ......... 30
R A
ac gr grou oun n >
a ng
e
ase as e or
ra eg c
ann an n ng ng.. .... .... .... .... .... .... .... .... .... .... .... .... .... ....
E
The Most Important Constituent: Constituent: Senior Managem Management................... ent............................ ......... 32
S
The Importanc Importance e of Communica Communication tion .................................. ............................................... ....................... .......... 33
E
More Notes on Agility ............ ......................... .......................... .......................... ......................... ........................ ............... ... 35
R
Co-opting the Power User ............ ......................... ......................... ......................... .......................... ..................... ........ 36
H C
Wor
oo
E T
Stage 1 > Plan the Plan...................... Plan................................... .......................... ......................... ........................ ........................ ............... ... 7
~
1.1 Scope Statemen Statementt Worksheet............ Worksheet......................... .......................... .......................... ......................... ............9 9
O
1.2 Project Goal Statement ..................................................................... 11
F
1.3 Planning Constraint Constraints s ............ ........................ ......................... .......................... .......................... ....................... .......... 12
N
1.4 Identify Stakeho Stakeholders lders ............ ........................ ......................... .......................... .......................... ....................... .......... 14
I
1.5 Stakeho Stakeholder lder Analysis Tool ............ ......................... .......................... .......................... ......................... .............. .. 15 1.6 Letter to Key Stakeho Stakeholders lders ............. .......................... .......................... .......................... ........................ ............. 21 1.7 Kick-off Meeting Agenda ............ ......................... .......................... .......................... ......................... ................ .... 23 1.8 Convergence of Technolo Technology gy and Core Business Strategy ............. ................ ... 24 1.9 Timeline Tool ............. .......................... .......................... .......................... ........................ ........................ ...................... ......... 25 1.10 Project Denition Statemen Statementt ............. .......................... .......................... .......................... ..................... ........ 26
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Agility Tip: Have a Plan for the Plan Every minute spent planning saves saves three minutes in in execution. wo critical issues require your attention in this 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 everybody’s attention. Wee recommend it. However, W 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.
P U O R G H C R
Step 1 – Set Strategic Planning Goals Objectives:
E
Establish the scope of your Strategic IT Plan.
•
A
Establish strategic planning goals.
S E R
Review possible constraints and steps to mitigate those constraints.
•
H
What You Need To To Do Create a Scope Statement. It is good to start by dening the kind of IT investments and activities your strategic planning effort will address. In most simple terms, start by dening boundaries. What is strategic? strategic? Use “1.1 Scope Statement Worksheet” Worksheet” to help ormulate a scope. Outline the purpose of the plan. Use the worksheet “1.2 Project Goal Statement” to Outline draft the primary reasons for developing a strategic plan. Identify (and plan to mitigate) possible constraints . Think about the constraints you ill 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. 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 “To align the IT organization with the business strategy of the North American operations.” operations.” Another example is “To “To identify technology-related projects that provide our organization with the highest return on investment.” Page 23
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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 ser ving our customers” is a laudable departmental goal, g oal, but it is more functional rather than Strategic. Your Strategic IT Plan should be about establishing how information technology technolog y will make the enterprise more effective and competitive.
Identifying Constraints P U O R G H C
As much as we would would all like to believe believe that everybody in an organization is headed in the same irection, the reality is that there are numerous numerous internal agendas. Successful implementation implementation of any plan relies on a number number of factors that are outside of your control. hink 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 have difculty scheduling time with all of the stakeholders. Alternatively Alternatively,, if IT has historically served in a support capacity at your organization, you may face resistance rom senior senior management management who do not see the need need for a strategic strategic plan for the I departm department. ent.
R A E S E R
W at Is Strategic? t will be noted noted later later in this methodo methodology logy that an I governa governance nce structure structure is no a replacement or the IT manager. However, However, there are certain IT projects that are beyond the scope of the unctional uncti onal duties duties of the I departm department. ent. Give Give some some thought to to what kinds kinds of projec projects ts occupy occupy his space. nfo-Tech Research Research Group suggests that you look at projects that might be strategic from three perspectives:
H C
•
E
Reach and Impact: Who is affected directly and immediately by a proposed project? Will it involve involve the participation of more than one department? What proportion propor tion of IT sers across the organization will be impacted?
T •
~ O F N I
•
tandards: Any action that sets or impacts an Information Technology Standard for he entire enterprise will, by denition, affect everybody. Any such standard should have emonstrable impact on moving the enterprise toward its goals. Cost: It may seem crass to identify identify a project as strategic simply because of its price tag, ut another way to look at it is that any project that carries a price over a certain amount, hich 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 ne PC isn’t strategic. strategic. However, if a new Web services based content management system requires Ofce XP running on Windows XP, XP, then it may be necessary for the company to standardize on Windows XP. XP. A project to upgrade every PC to Windows XP would certainly have the reach and impact, not to mention the cost, co st, to make it a strategic project. n this case the project should be analyzed and approved approved within a strategic strategic context. An enterprise-wide operating system upgrade does have the scope and impact, standards implications, and cost to warrant being considered strategically. strategically. Page 24
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Step 2 – Establish a Planning Group Objective:
Identify and contact the key stakeholders who can participate par ticipate in the strategic process.
•
What You Need To To Do Identify stakeholders. Use the worksheet “1.4 Identify Stakeholders” to create a preliminary list of people who you may want on your steering committee, committee, or those that you will enlist as ‘champions’, in order to implement your strategic plan. Think carefully about this list. Your list list should consist not only of management above you, but also of your peers and subordinates. Use worksheet “1.5 Stakeholder Analysis Tool” T ool” to further rene your list. Invite key stakeholders to join the steering committee. The Strategic IT steering committee commi ttee will will be be the prima primary ry planning planning body for Strategi Strategicc I . his group group will will participate participate in the creation of the strategic plan, and will be the basis for a permanent governance group.
P U O R G H C R
Creating your steering committee 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 lon g term I strat strategic egic governanc governancee in your your enterpris enterprise. e.
A E S
A steering committee will help perform two important roles for the management of an organization’ss IT direction: organization’
E R
•
Alignment. The committee helps ensure that IT strategy strateg y is aligned with the strategic goals of the organization. organization.
H
•
Ownership. IT enables all functional units within the organization. These units have to play a role in larger I strat strategic egic decisions decisions since since those decisions decisions will will impact their 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 t and functional integration across the organization. The steering committee will help you develop 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. investments. As IT has enterprise-wide implications, it makes sense that you should involve constituents consti tuents of the enterprise enterprise outside outside of I in strategic strategic planning planning.. It is also important, important, however 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 nance to complain about bugs in their new system or for personnel to note inefciencies in the help desk. A steering committee is not a replacement for the I manager, or management team of the IT department department. The IT manager manages his or her department. The
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steering committee helps set priorities for I investment and evaluates evaluates how well the entire organization is progressing in meeting strategic goals. •
P U O R
The steering committee is not a “rubber stamp” for the IT department . he committee commi ttee must must be able to gauge the business business impact impact of vari various ous proposed proposed I projec projects ts.. They are not there simply to communicate the latest decision decision by the IT managers. They ust have the power to say another project has higher priority.
Agility Tip: The Perils of Going It Alone A lone 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.
G H
Whether it is a ten-person committee or a couple of decision makers with whom you regularly have coffee, open communication communication and stakeholder involvement is the key.
C R A E S E R
Meetings, communication, consensus building: hese are all time consuming tasks. Wouldn’ Wouldn’tt it be easier just to take this methodology into your ofce, work through the steps, and present a nished strategic plan to your CEO? You can go it alone with this methodology You methodolog y, but the resulting plan will be more likely to sit on a shelf and never really impact management decision making. Wider involvement involvement in planning guarantees better and more lasting results as more people will have a stake in the outcome.
H C E T ~ O F N I
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Step 3 – Hold a Kick-off Meeting Objectives:
Bring together your steering committee to for mally launch the project.
•
Rene goals and establish an initial timeline for the project. What You You Need o Do ü
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 lanning project.
ü
ü
Use “1.7 Kick-off Meeting Agenda” as a basis for your meeting. meeting. Discuss the goals and possible constraints that you have outlined with the steering committee and if ecessary, revise goals and expectations based on their input. Use “1.8 Convergence of Technology and Core Business Strategy” PowerPoint presentation to help explain the importance of IT/Business alignment and establishing establishing governance.
ü
Use “1.9 Timeline Tool” Tool” to establish a preliminary preliminar y timeline for the Strategic T Planning project. Estimate an approximate time for each of the stages in this ethodology.
P U O R G H C R A E S
The kick-off meeting is an excellent opportunity to introduce your steering steering committee members to each other and to the project. Review the goals and possible constraints that you have already identied. Use this meeting to set a clear 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.
R H C E
If you can have the President or CEO kick-off the meeting with some encouraging ords, it would be a great shot in the arm to the project.
T ~
Introduce the members of the team to each other. Depending on the size size of your organization, some members may not know each other. oth er.
O
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.
N
Share your preliminary goals and discuss possible constraints with the team. e illing to listen to concerns and ideas. ideas. Make sure you encourage feedback from the eam. Finally,, review the steps of the plan and put a rough timeline together. Better Finally
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. Page 27
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Strategic IT Planning and Governance
Creating t e Timeta e eview the steps in this methodology methodolog y with your team and establish a completion date for each step in the strategic planning process. Try to stick to your dates dates as much as possible. This is your opportunity to streamline the process:
P U O R
Although the best IT plans include all of the stages in this methodology, the information gathering involved can be very time-consuming work. For For each stage of the process, ask “Has his been done already?” and “Do we already have this information?” For example, in Stage 2 you will be documenting your organization’ organization’ss strategic vision and business irection. 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.
G H C R
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 involved over time. time. At the outset, you you will likely have have no shortage of energy to put into creating the plan. However However,, as time goes on, you and your steering committee’s energy will wane.
A E
f 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 signicantly. signicantly.
S E R
Step 4 Create a Preliminary Report
Objectives: H •
C
Document the purpose of the Strategic IT Planning and Governance Project. dentify possible project constraints and limitations and mitigation options.
E T ~ O
•
Set a timeline for the project.
•
Gather top-level support.
F N I
What You Need o Do ü
Use the template “1.10 Project Denition 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 mana ma nagem gemen en .
n this step you will review and consolidate the content created in the rst three steps steps of the lan the Plan stage into one consolidated report that you can take to senior management for approval. In your project denition 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 Denition Denition Statement. List the primary reasons that the organization is undertaking this process and what it hopes to achieve achieve.. Use your revised goal statements from worksheet “1.2 Project Goal Statement.” •
Include the constraints you have identied. Successful implementation of any plan relies on a number of factors that are outside of your control. Using your completed completed
orksheet “1.3 Planning Constraints” list any constraints, limitations, or obstacles that you can think of, as well as possible solutions within the Project Denition Statement orkbook. •
•
Set a timeline. Use the “1.9 imeline ool” to lay out a preliminary timeline for the project. These dates may be adjusted later, later, however setting some general targets now is a good start. Use the various 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 re presentative 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 infor mal meeting – if you can, sit down with some of the brass and get
their take on the project. Show them your denition statement, constraints, constraints, timeline and budget, and solicit their feedback.
P U O R G H C R A E S E R H C E T ~ O F N I
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Stage Summary: Plan the Plan Time spent planning saves time in execution. execution. You 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. P
he following chart shows the progress of developing the plan after Stage Stage 1 of the engagement. Status
U O R G
Creation Of Steering Committee
one
Scope Denition of “Strategic”
one
Strategic IT Plan Kickoff Meeting
one
Preliminary Report With Goals and Timeline
one
Stage
Document corporate Vision, Mission and Strategic Goals
2
Analyze Core Competencies Competencies and Competitive Competitive Position
2
C
Current IT Organizational Structure.
3
R
Hardware and Software Inventory
3
Analysis of IT Trends
3
H
A E S E R H C E
Review of IT Against Governance Maturity Model IT SWOT Analysis List of Proposed Future IT Directions List of Requirements for Resolving Gaps (Roadmap) Corporate IT Vision Statement
6
Corporate IT Governance Charter
6
Strategic IT Goals Achievable Measures Budget Analysis Prioritized Project List
T ~ O
Completed Strategic IT Plan Document
8
Comprehensive Strategic Planning PowerPoint
8
Strategic Planning Communication Plan
8
F N I
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Background > Making the Case for Strategic IT Planning In 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. concep t. his is because because I is more often often seen as a functional functional enabler enabler of busin business ess processes processes.. Consider the four-quadrant IT/ Business alignment model that was presented in the introduction to this methodology methodolog y. In an ideally aligned ali gned I orga organiz nizati ation, on, there there is a balance between Functional Integration and Strategic Fit. he IT department is integrated with both the Business Infrastructure and an overall Technology Technology Strategy that is aligned with the Business
P U O R G H C R
Strategy.
A
IT alignment in actual companies can be quite different than what is modeled here. For example, an organization could have have a strategic plan, but I has never been looked at strategically strategically.. In this case the IT department’s agenda is very much inuenced by the functional requirements of the individual departments who are each striving to t their individual plans with the overall strategy strateg y.
E
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 infrastructure is the pivot and IT is the impact domain. It is also possible, p ossible, but perhaps less likely, 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.
S E R H C E T ~ O F N I
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 benet your organization. org anization. In short, make the case that a wellthought-out thought -out I strat strategy egy can make your enterprise enterprise more more competitiv competitivee and protable. protable. Page 31
Strategic IT Planning and Governance
n late late 2002 Info- ech Res Researc earch h Group Group surveyed IT managers about Strategic IT lanning lanni ng (SI P). Use Use the the followi following ng points points rom the survey in bolstering you case: •
SITP reported that their entire rganization was at least somewhat ore competitive due to utilization f SITP; 15% indicated that utilizing SITP has signicantly increased increased their rganizations’ competitiveness competitiveness..
P U O R
Increased Ability to Obtain Funding: 73% of organiz organizations ations tilizi til izing ng SI P reported reported an an increas increased ed ability to obtain funding for new IT initiatives.
G H C R
Increased Competitiveness: 65% of organizations utilizing
•
From En From Ena a er to St Stra rate tegi gicc Investment e purpose o as s te rom ena ng the organization to actually delivering value to the customer customer.. Consider Consider these these trends from from A. . Kearney. : o s e t t at tec no og y decisions inuence overall business strategy strategy.. ü
1998: 55% of CEOs were devoting 22% 22% of their time toward toward trying to keep abreast of technologies that would affect their business. : ec no ogy s not on y v ewe as part of the strategic business process, process, but is considered a fundamental key driver.
Increased Executive Executive Support of IT Strategy: Strateg y: 80% of respondents utilizing SITP
versus 67% of respondents not using SITP reported that IT strategy was of high or oderate importance to senior management in their organization.
A E S
•
E R
•
H
Improved IT/Business Objectives Alignment: 94% of respondents utilizing SITP eported having having improved improved the alignme alignment nt between between their I object objective ivess and those of the rganization as a whole. Better Project Tracking and Budgeting: Organiza Organizations tions util utilizing izing SI P were were more likely to nish their projects on time and on budget than those organizations not tilizing this practice
C E T ~ O F
The Most Important Constituent: Senior Management Senior management involvement (CEO and senior managers) in the strategic IT planning process is absolutely critical. In fact, if you don’t have have upfront buy-in and support, it is really orth asking whether or not you should proceed.
N I
n 1998 a research report repor t from McKinsey Group argued that most companies fall within four categories in terms of their use of Infor mation Technology. Technology. 1.
IT Laggards. Were slow to use new technologies either efciently or effectively in support of core business process. process. Almost Almost half of the companies studied studied by Mckinsey ell into this category. categ ory.
2. Big Big IT IT Sp Spen ende ders rs.. These are companies that have tried to stay stay ahead of the curve ith large IT expenditures. Unfortunately, Unfortunately, they have not balanced these efforts with efciencies and are not getting enough bang for their buck. Page 32
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3. Caut Cautio ious us IT IT Spen Spende ders rs.. hese are are companies companies that focus focus on efci efciency ency of functional functional I but fail to think about how IT can have a strategic impact. . IT Stars. These companies are a minority (27%). They have successfully successfully balanced effectiveness and efciency. efciency. hey spend less than the big spenders, spenders, but the expenditures they make have a greater return.
In their pres their prescri ption on for foIT r how I Laggards cancripti become Stars, the McKinsey researchers posited “seven highly effective habits” for IT in companies. companies. The very rst of these the se habit habitss is “I “I mu must st be a top management affair”. They found that top mana manageme gement nt at I laggar laggards ds spent spent 20 20 hours per month focused on IT IT.. At IT stars, top managers devoted 45 hours. h ours.
P U O R G H
At I stars, the researchers researchers found, “top managers devote time and energy to devel developing oping an an I strat strategy egy,, and get actively involved in introduction of new systems.” systems .” (“Manufacturing Use and Abuse of IT”, McKinsey Quarterly, Quarterly, 1998 issue 1, p 138.)
C R A E S E
The Impor Importan tance ce o Com Commun munica icatio tion n A 1999 study of “Enablers and Inhibitors of Business-I Alignment for the Association for Information Systems” surveyed sur veyed hundreds of IT executives and business executives executives.. The survey sur vey resulted in the following table of enablers and inhibitors.
R H C E
Enablers Senior ex executive su support fo for IT IT
Inhibitors IT/business la lack cl close re relationships
T ~
IT involved in in st strategy de development
IT does no not pr prioritize we well
O
IT understands the business
IT fails to meet its commitments
Business - IT partnership
IT does not understand business
Well-prioritized Well-priori tized IT projects
Senior executives do not support IT
IT demonstrates leadership
IT management lacks leadership
An interesting observation of the study was that the enablers and inhibitors were seen seen as two sides of the same same coin. It is is really really all about about communicat communication. ion. If you and your your non-I mast masters ers and colleagues plan together, use a common vocabulary, and share the same vision, alignment follows.
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ere are four suggested actions for enhancing alignment in your organization. All four are addressed in this methodology. 1. Build Build Gov Governa ernance nce Proc Procedu edures res and Struc Structure turess that involve the broader management eam in I inve investme stment nt decisions decisions.. Such a governance body body is usually called called a “Steering “Steering Committee” though other terms like “IT Investment Committee” Committee” can also be used. This committee commi ttee should should make sure sure that I planni planning ng and strategic strategic planning planning are linked. linked. P U O
2. Learn Learn th thee Lan Langu guage age of Busine Business ss:: The benets of any IT project must be expressed in business, rather than technical terms. Prepare a business case for each signicant echnology investment. Some can be difcult to justify in isolation (e.g. security, security, storage), ut can be justied as part of a broader business objective (e.g. (e.g. business continuity, continuity, letting customers serve themselves online).
R G H C
3. Measur Measuree Every Every Importan Importantt IT and and Busine Business ss Outco Outcome me (e.g. project completion ates, budgets, sales, and prots). Business and I metrics should also also be linked (e.g (e.g.. 1 illion 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 ot only is the outcome important, but it’s it’s important enough that you need to set goals and monitor progress towards them.
R A E
4. Comm Commun unic icat atee Cle Clear arly ly through policies, po licies, procedures, procedures, service level agreements, and project charters to ensure on-going understanding of both the functional and strategic olee of ol of I and I in invves estm tmen ents ts..
S E R H C E T ~ O F N I
Easier Sai T an Done n 2002, 2002, ME A group group reported reported that that alig alignme nment nt had been been amon amongg the top top ve conc concerns erns of of I executives executiv es over the previous 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 elusive in many companies. n the same year Balanced Scorecard Magazine and CIO Magazine co-sponsored a survey of 500 and business executives. Among the 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 I ’s role as “reactive problem solver”, while only 28% reacted favorably favorably to the itle “strategic consultant”. Almost half of respondents didn’t 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 ere well linked to business strategy strateg y.
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, effo rts, such as strategic planning and governance. Research shows that the better aligned the business and I strategy, the better the potential for positive return for the enterprise.
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More Notes on Agility Focusing on an open on-going on-g oing strategic process, as opposed to writing an annuall strategic annua strategic I planni planning ng document, document, is the key key to keeping keeping your strategic strategic planning agile. Here are some additional tips on building agility from the McLean Report article “An Agile Strategy Strateg y for A Dynamic World”. World”. Consider this food for thought as you build your strategic practice. .
Gather corpo Gather corporat ratee and and depa departme rtmenta ntall supp support. ort. 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, company, you will also need to gather stakeholders from various departments depar tments and functional units. Overall, there must be corporate initiatives in place that cultivate a change-tolerant and exible culture.
P U O R G
2. Envi Envisi sion on th thee str strate ategy gy.. As a starting point p oint 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 oppor tunities more accurately. accurately. Outline a focused, long-term long-ter m strategy based on the scenarios most likely to occur, and develop high-level strategic
options forthe other likely Setscenarios guidelinestranspire. guidelines for the real-time creation of new options in event thatscenarios. unforeseen 3. Design the strategy strategy and and plan for changes changes to the corporate infra infrastructure structure.. Ensure that the strategy strateg y 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? he largest hurdle hurdle in adopting a exible, agile strategy ill likely be your IT infrastructure. Consider the following implications for IT:
H C R A E S E R
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 evolve into a set of standards-based services, capable of maximum exibility. •
•
The IT investment policy must must change from simply endorsing planned replacements o a model of continuous adaptation based on business needs. needs.
C E T ~
nformation assets need to be made readily available and reusable to all authorized users while maintaining a high level of security security..
O
A process must be created to manage workow – providing providing access to information or those who need it, and restricting access from those who don’t. Strategic ecisions to outsource or in-source should be supported suppor ted by exible systems capable f change.
N
Business and I proces Business processes ses need to be develo developed ped and resources resources deploy deployed ed to gather real-time performance measurements during the execution phase. . Execu Execute te the the strate strategy gy and and gathe gatherr feedb feedback ack.. The success/failure of your strategy should be measured in real-time as the implementation occurs. If feedback indicates that
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here are holes in the design or vision of the strategy, then these should be modied. modied. This is the crux of the real-time strategy, strategy, and is the most difcult to implement. 5. Maintain Maintain a continu continuous ous proces processs for strate strategic gic devel developmen opment. t. Allow for the introduction of new ideas and innovations mid-planning cycle and respond to new pportunities and threats as they occur. Instead of an annual analysis of the strategy, evaluation of strategic effectiveness effectiveness should be occurring on an on-going on-g oing basis. Once
he process place, the strategic changes willisbeinincremental and lessplanning drastic. process should be less time-consuming, as
P U
•
O R G
Preparation and execution are lengthy processes. Infusing these with real-time eedback of environmental and competitive competitive changes as they occur will prevent companies from wasting time on o n outdated initiatives. initiatives. Document all changes, initiatives,, ideas, and market inuences for later reference during the on-going initiatives strategic planning process.
H C R A
Co-opting the Power User There is a power user in your organization. Let’s Let’s call him Bob (or Alice will also do). Bob is respected in his department because of his above average average understanding and use of information echnology. Bob doesn’t like you.
E S E R H C
More precisely, precisely, Bob doesn’t like the direction your IT department is taking. He is openly critical f I with other other users. users. Why? Maybe Maybe your department department refused refused his his request request for non-supported non-supported echnology without explaining why or offering an alternative. Maybe the help desk failed to answer his sophisticated sophisticated queries. queries. Maybe he just wants wants a little little respect for his opinions from the I ecision makers. The Bobs and Alices of your organization could undermine your credibility and frustrate your plans. It’s It’s also true, however however,, that Bob and Alice could have some great g reat ideas with genuine business value. Your Your job is to understand these skeptics and an d make them your allies. How?
E •
T ~ O F
•
N I •
Ask department heads and your own IT support groups to give you the names of he power users in various units. Skeptical business unit executives should be easy to nd since many of them come to executive meetings and make their skepticism known. he 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 ave adequate condence in your ability to support them. Invite potential power user skeptics to meet with you to discuss IT directions. The skeptic may be attered by your request and more more open to dialogue. Involve them urther by tapping them during fact-nding phases of planning for new projects. Help the skeptic become the local expert in new tools and services you plan to ntroduce . 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 satised users at public places on your intranet.
Be prepared to listen to your power user skeptics. You 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: Remember: the best way you can understand and win over skeptics is to keep them close to your side and an d involve them in planning initiatives initiatives.. They might even provide a valuable window into the business needs of your organization.
P U O R G H C R A E S E R H C E T ~ O F N I
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P U O R G H C R A E S E R H C E T ~ O F N I
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Stage 2> Document You Y ourr Bu Busi sine ness ss St Stra rate tegy gy
Stage
In 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. Realistical Realistically ly,, you can’t can’t hope to integrate your I strategy with the business strategy of the organization if you can’t can’t rst demonstrate a clear understanding of the business strategy strateg y.
2
In this stage you will analyze your organization’ org anization’ss background, mission and core values. The culmination of your analysis should be a succinct set of well-dened corporate objectives as well as an understanding of the environment in which your organization competes.
Step 1 – De Descri e t e Co Company an Its Bac groun
Use your steering committee Use members of your committee – such as participants from the senior management team – for information gatt er ng. ga Steering committee members should have n or mat on or t s stage rea y at an . If not, have committee members invite invite resource people from their departments to e p you u t s n or mat on o n.
Analyze how your organization got to where it is today. today. Look at your history in terms of dates and growth milestones but also in 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 overall purpose?
P U O R G H C R A E S E R H
Step 2 – Conduct an Industry Analysis An analysis of the industries in which your organization operates will provide a deeper context to your current mission and key objectives. Use these as well as the theory contained in thestrategic background section, to better understand youranalysis industrytools, industry. .
Step 3 – Document Vision, Mission, and Core Values Document your organization’ org anization’ss mission and vision statements and list your core values values.. Your organization mission statement should answer three equally important questions: Why do we exist? Whom do we serve? What do we produce?
Step St ep 4 – De De ne Co Corre Bus Busiine ness ss an It Itss Bou Boun n ar ariies Examine your organization’s core competencies. What makes you special and different? Once you have dened your core business, determine what customers, channels, and competitors are within those boundaries.
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Step 5 – Create Create a Financia Financia Pictur Picture e Gather up-to-date nancial information of your organization. Financial information is one of he few ways you can make a real ‘apples to to apples’ comparison of your organization to the rest f the industry. industry.
P U
Step 6 – List Strategic Objectives Summarize your analysis in a succinct and forceful set of business objectives. objectives. These are the specic strategic objectives that you hope our IT strategy will align with. w ith.
O R G
In T is Stage
Stage 2> Document Your Business Strategy..... Strategy.................. .......................... .......................... ................... ...... 39 H C
Step 1 – Describe the Company and its Background......................... Background.............................. ..... 42
R
Step 2 – Conduct an Industry Analysis.................... Analysis................................. .......................... ................... ...... 43
A
Step 3 – Document Vision, Mission, Mission, and Core Values ............. ......................... ............... ... 44
E
Step 4 – Dene Core Business and Its Boundarie Boundaries s ......................... ................................ ....... 45
S
Step 5 – Create a Financial Picture............ Picture ......................... .......................... .......................... ................... ...... 46
E
Step 6 – List Strategic Objectives.. Objectives............... .......................... .......................... .......................... ................... ...... 47
R
Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ ...................... ......... 48
ac gro groun un > na yz ng us ne ness ss
ra eg egy.... y....... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... .....
H C E
A Company’s Company’s Value Value Chain Chain ............ ......................... ......................... ......................... .......................... ..................... ........ 49 The Supply Chain Chain............ ......................... .......................... .......................... ......................... ........................ ..................... ......... 51 Industry Lifecycles........................ Lifecycles..................................... .......................... .......................... .......................... .................... ....... 52
T ~
Porter’s Five Forces Model ................................... ................................................ .......................... ..................... ........ 54
O
Environmental Environmen tal Analysis (PEST) ............. .......................... .......................... .......................... ....................... .......... 55
F
Identify Your Organization’s Organization’s Core Compete Competencies ncies............ ......................... ........................ ........... 55
N
Key Success Factors................ Factors............................ ......................... .......................... ........................ ........................ ............... 57
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Workbook Stage 2> Document Your Business Strategy..... Strategy.................. .......................... .......................... ................... ...... 33 2.1 Company Background and Description...................... Description.................................. ....................... ........... 35 2.2 Industry Denition............. Denition......................... ......................... .......................... ......................... ........................ ............... ... 38 2.3 Priority Industries.............. Industries.......................... ......................... .......................... ........................ ........................ ................ ... 41 2.4 PEST Analysis...................... Analysis................................... .......................... .......................... ........................ ...................... ........... 42
P U
2.5 Core Valu Values es............. .......................... .......................... .......................... ........................ ........................ ........................ ........... 44 O
2.6 Company Mission and Vision ............. .......................... .......................... .......................... ..................... ........ 45
R
2.7 Core Business and Its Boundarie Boundaries s ............ ........................ ......................... .......................... ............... .. 47 2.8 Business Unit Core and Goals ........................ ..................................... .......................... ..................... ........ 49 2.9 Company Financial Picture....... Picture.................... .......................... ......................... ......................... ................... ...... 51 2.10 Company Strategy and Goals .............................. ........................................... ......................... .............. .. 55 2.11 2.1 1 Key Success Factor Analysis Tool................................ Tool............................................. ................... ...... 57
G H C R A E S
Agility Tip: Keep an Eye on Change e too s n t e wor oo or t s sect on are es gne to e p ocument a company’ss vision, mission, core business, and objectives company’ objectives.. It is hoped that these elements are already documented documented or at least there is a rm idea of what they are n t e ea s o you ourr se sen n or exec ecut ut ves es..
E R H C
An important issue, from an agility standpoint, standpoint, is that you be kept in the loop loop if eree ar er aree an anyy s gn can antt c an ange gess n rec ectt on. gn ng w t st strrat ateeg c go goaa s t at
E
are moving targets can be hard enough, but not knowing that the target has been oved will be even worse.
T ~ O F N I
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Step 1 – Describe the Company and Its Background Objective: •
going.
P U
What You Need o Do ü
Outline Your Organization Histor y. Use the worksheet “2.1 Company Background and Description” to create create a brief history histor y and description 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 prole takes account of recent and pending changes.
O R G H C
Build a synopsis of your organization including where it comes from and where it is
Begin with historical information and documents about your organization. Much of this information will be readily available, available, although it may not be in an ideal format. he key to this section is to develop an appreciation of your organization from a business perspective. perspective.
R A E
Consult existing organization documents (e.g. business plans, nancial statements, 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.
S E R H C E
The aim of this stage is to build a structured prole of your company. company. You may may be surprised to nd that, while everybody feels they know why w hy 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 f the company you will better be able to focus on the technologies and policies that will help it succeed. aving sharpened your understanding of the company, company, you will in the next step sharpen your understanding of where your enterprise stands in relation to competitors. competitors.
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Step 2 – Conduct an Industry Analysis Objective:
Gather implications based on an analysis of the industries in which the organization opera ope ra es es.. What You Need To To Do Dene your industry. Use the worksheet “2.2 Industry Denition” in the workbook to document your industry. Your Your denition is based b ased on the answers to the following uestions:
•
P U O
In what industry (or industries) does the organization compete?
R
How large is the industry and an d what role does your organization org anization play in it?
G
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? Prioritize multiple industries. If your organization operates in multiple industries, industries, use the worksheet “2.3 Priority Industries” to determine if any industries are viewed as a more important strategic priority to the organization. Conduc Cond uctt a PES PES An Analy alysi sis. s. epending 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 PES (P (Politi olitical, cal, Econom Economic, ic, Social Social,, and echno echnologica logical) l) Analys Analysis”. is”. A PES analys analysis is will give you a rm understanding of the environment within which the organization is perating.
H C R A E S E R
Every organization operates in at least one market market with at least one product. Depending on the complexity of your customers and products, you probably have several distinct customer customer sub-groups and product groups. Most importantly, importantly, your organization may operate in different industries.. Each industry has different dynamics, levels industries levels of competitiveness and levels levels of protability. 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, Lifecycles, Porter’s Porter’s Five Forces Forces Model, and PES (Politic (Political, al, Economical, Social, and Technological) analysis. These are standard management theories that will help you in your analysis. analysis.
H C E T ~ O F N I
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Step 3 – Document Vision, Mission, and Core Values Objectives: •
List the core beliefs and philosophies that drive your organization’s organization’s strategy.
P
What You Need To To Do
U O
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.
R G H C R A E
Document the Mission and Vision Statements of your organization.
Your organization operates on a set of values that guide strategic planning and organization irection. Core values guide our day-to-day day-to-day behaviors and collectively collectively create the desired culture f 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 individual values values can be ifferent, an organization as a whole requires shared values. •
S E
•
They determine the norms nor ms or standards of acceptable behavior concerning how to approach your work.
R
•
They are enduring and consistent over time. They are traits traits your organization will ever give up (even in difcult times).
H C E T ~ O F
hey are driven by, by, and crystallized from, the top leadership in the organization.
More than likely, likely, your organization has both a vision and a mission statement. Use these statements to ll out this section. Don’t worry about nding the perfect wording for either the vision or the mission statements. statements. For now, now, just get the key concepts down on paper. A vision statement describes an image toward which which your organization is striving. Most rganizations’ visions say things like “to create an organization o rganization with which customers line up to o business and for fo r which employees can’t wait to come into work.”
N I
f your organization does not have a mission statement, use the Mission Development Triangle below to develop a working statement.
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P U O R G H C
Step 4 – Dene Core Business and Its Boundaries
R A E
Objectives:
S •
Identify those activities that fall inside and outside of the core business.
•
Identify core business and boundaries for individual business units.
E R
What You Need To To Do
H
Think about which line or lines of business are at the heart of your organization’s success. Enter these unique core business business lines into worksheet worksheet “2.7 Core Business and Its Boundaries”.
C
Dene the boundaries for the core cor e business in terms of market, operations, channels, channels, and competitors.
T ~
If you have more than one business unit, dene dene core business lines and boundaries for each unit. Use worksheet “2.8 Business Unit Core and Goals” to create a prole for each business unit.
O
E
F N
Depending on the size of your organization, dening your core business may either be an easy task or a very very difcult one. here are a lot lot of consulting companies whose primary business is helping rms determine their core business. It should not be as difcult as this – spend some time thinking about which line or lines of business are at the heart of your organization’s organization’s success. Part of dening 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 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 manufacturer’s core business may be esigning engines. Tire design and manufacture would not be included in the car maker’s maker’s core business. Once you have dened the core, determine what customers, channels, and competitors are within he boundaries. Although you may already already have an intuitive intuitive sense of what falls within and what alls outside of your core business, putting it down in writing should solidify your understanding. P U O
Step 5: Create a Financial Picture Objectives:
R
Create a nancial prole of your organization.
•
G H
What You Need To To Do ü
C R
Use the worksheet “2.9 Company Financial Picture” to construct constr uct a nancial prole of your organization and its competitors. competitors. he worksheet worksheet lets your create create proles for the following:
otal Company Revenues
A •
E
Growth Rate of Company Revenues
•
otal Revenue Over the Internet
S •
E
Growth Rate of Internet Revenues Numberr of Emplo Numbe Employees yees
R •
H
Capital Budget
ü
Operating Prot Inventory urns
•
Cost of Goods Sold Sold Cost of Labor
Expected Number of Employees
For each category, list your organization’s information in the top box and list the industry average in the box below below..
C E T ~ O F N I
Financial information is one of the few ways you can make a real ‘apples to apples’ comparison f your organization to the rest of the industry. industry. If you work for a publicly traded company, company, nancial information about your organization is public record and should be easy to nd. rivate companies are not obligated to furnish nancial information to either their employees or he general public. In most private private companies, nancial information is provided on a need-tonow basis only only.. alk to your nance department department and senior management. You should 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 nancially and how strong you are relative relative to ther companies in your industry. Once you have collected information about your own organization, do some research using either the Internet or industry associations to nd out how you compare to others in the industry.
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Step 6 – List Strategic Objectives Objectives:
Create a succinct list list of primary corporate strategic goals. Create a succinct list of business objectives. objectives. What You Need To To Do Review all of the information collected in this stage of the methodology. methodology. (Mission Statement, Vision Statement, Core Business Denition, Financial Information) Use the worksheet “2.10 Company Strategy and Goals” to formulate lists of primary strategic goals and business objectives ob jectives..
P U O R G
Take your analysis further with “2.11 Key Success Factor Analysis Tool” Take Tool”. This tool ill look beyond what the organization wants to achieve to a more specic analysis of hat the organization has to do.
An organization strategy can take many different forms for ms and timeframes. timeframes. It may consist of nancial targets, such as revenue and prot growth, increase in share price, p rice, or a decrease in levels of inventory inventory.. It may also consist of other, non-nancial goals, goals, such as number of new product launches, improved improved brand recognition, or additional partnership par tnership arrangements. Businesses operate towards towards a set of business objectives. objectives. Depending on the organization, these may or may not be properly dened. The point of this section is to clarify clarify your organization’s organization’s strategic business objectives objectives..
H C R A E S E R
Read back through the work you have completed and tie it together into one powerful document outlining your business objectives objectives.. We suggest using point form and listing no more than ten objectives.
Key Success Factors
Compare the business objectives you determined with the ones listed in your organization’s organization’s business plan or annual report. Companies’ stated intentions are often very different from the forces actually driving the organization.
ey uccess actors n uence management decisions, you should prioritize the Key Success Factors so that you focus attention on t e ar arges gestt ar area eass o op oppo portu rtun n ty ty..
H
ow t at you ave en entt e your go goaa s and strategy, you can determine what the Key Success Factors are for achieving hese. After you have identied how the
Keep your list of business objectives close close at hand and refer back to it when completing subsequent sections.
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Stage Summary: Document Your Business Strategy You should should now have a set of descriptions of your organization that can be used to compare ith your IT strategy in order to promote alignment. In a few PowerPoint PowerPoint slides, you should be able to tell an audience where your company comes from, what its primary objectives ob jectives are, and P U
how it ts in the market in which it competes. This is foundational infor mation for building s ra egy gy.. he following chart shows the progress of developing the plan after Stage Stage 2 of the engagement.
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Status R
Stage
Creation Of Steering Committee
Done
Scope Denition of “Strategic”
Done
Strategic IT Plan Kickoff Meeting
Done
H
Preliminary Report With Goals and Timeline
Done
C
Docu Do cume ment nt co corp rpor orat ate e Vis Visio ion, n, Mi Miss ssio ion n and and St Stra rate tegi gic c Goal Goals s
Done Do ne
R
Analyze Co Core Co Competencies an and Co Competitive Po Position
Done
A
Current IT Organizational Structure.
3
Hardware and Software Inventory
3
Analysis of IT Trends
3
G
E S
Review of IT Against Governance Maturity Model
E
IT SWOT Analysis
R
List of Proposed Future IT Directions
List of Requirements for Resolving Gaps (Roadmap)
5
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Corporate IT Vision Statement
6
C
Corporate IT Governance Charter
6
Strategic IT Goals
7
Achievable Measures
7
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Budget Analysis
7
Prioritized Project List
7
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Completed Strategic IT Plan Document
8
F
Comprehensive Strategic Planning PowerPoint
8
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Strategic Planning Communication Plan
8
E
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Background > Analyzing Business Strategy In order to proceed with IT Strategy development, you must start by building your understanding of your business and its its strategy. Complete alignment between your business busine ss strategy strategy and I strat strategy egy is the most most important determinant of success. If your organization is in the process of developing a strategic plan, plan, now is the perfect time to pitch pitch the idea of concurrently concurre ntly devel developing oping an I plan. Ideall Ideallyy, IT strategy and business strategy should be developed in a parallel process. process. If this is not possible, use documented existing business strategy as the basis for fo r your IT strategy. hroughout this methodology you will refer back to the goals and strategic objectives of the busin business ess and and ask ask how I ini initia tiati tive vess reinforce and support suppor t these objectives.
P U O R G H C R A E S E
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 to determine business strategy. strategy. This information will be particularly helpful if you do not have a background in management theory theor y.
R H C E
It not enough to simply know your organization’ organization’s strategy is. you is. o effectively effectiv ely develop develop an ITisstrategy you not o nly need only to what completely understand sthe strategy, must appreciate why your organization’s organization’s strategy is set the way it is.
T ~ O F
A Company’s Company’s Value Value Chain A value chain is a “string” of processes within a company that interrelate and work together to meet market demands. demands. By examining the value chain, one can uncover un cover how an organization has developed (or not developed) competitive advantage. he following chart developed by Michael Porter shows the value chain found in a typical company.
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P U O R G H C R
The various parts of the company’s company’s business processes (inbound logistics, logistics, marketing and sales, and so on) each contribute different amounts of value to the company. Strategic Strategic analysis etermines which of the activities are most important (i.e. (i.e. contribute the most value) from the customer’ss perspective, and determines ways to increase that value. customer’
A E S E R H C E
Maximizing Margin The goal of a well-functioning value chain is to maximize maximize margin. Margin is essentially a ratio f the operating income to the sales revenue – the bigger the margin, the higher the prot. Obviously,, maximizing margin is an objective of most businesses. How can a company Obviously achieve this? here are two main ways to improve margins: decreasing unit costs, and increasing unit revenue. 1.
ecreasing Unit Costs: This is reducing the costs of providing the same amount of value to customers. customers. Examples include:
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Savings on raw materials •
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Overhead reduction
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Productivity improvements
2. Incre Increas asin ing g Uni Unitt Rev Reven enue ue:: This usually involves improving the real and perceived value o the customer, leading to higher prices. Examples include:
Branding •
Quality and innovation Effective targeting
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The Supply Chain A supply chain is a process that consists of materials, information, and nances as they move from supplier, to manufacturer, to wholesaler, to retailer, to consumer. he average rm spends twice as much on its supply chain as the best rm, r m, showing how important the supply chain is to company performance. P U O R G H C R A E S
Considering the critical strategic role of the supply chain, nearly 50% of companies do not have good information infor mation about their supply chains. This is even even more astounding given the power of information sharing that the Internet and similar technologies allow. allow.
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Unta Un tang ng in ing g You Yourr Sup Supp p y C ai ain n Companies that have the best supply chain performance perfor mance follow six principles: 1.
traigh trai ghte ten n ou outt th thee str strat ateg egyy r rst st.. Too many companies see salvation in technology. One study says three of the four drivers of supply chain excellence are not related to echnology but to alignment of the organization and to performance measurement.
Defer IT spending decisions until key strategy elements are in place. P U O R G
2. Enli Enlist st th thee A pla playe yers rs.. he supply chain leaders hire the very best strategists – the best purchasing experts, the best logistics pros – and get g et them to work together under a top executive whose mandate is supply chain excellence. 3. Align Align the inc incent entiv ives es corre correctly ctly.. People do what they’re paid to do. Tie incentives to the ig goals: as you would hook transportation managers’ pay to on-time performance and racking costs, tie supply chain executives’ pay to return on assets (ROA) and vendor etrics. Reward cross-functional collaboration as well. well.
H C R A E S E R H
4. Repl Replac acee rules rules of th thum umb b with with metr metric ics. s. If you don’t measure, you can’t can’t improve. Get he data on everything from fro m vendor delivery performance to forecast accuracy, and then etermine which metrics matter most. Measure the “what ifs” and track your entire supply chain, not just what happens inside your business. 5. Work bey beyond ond yo your ur four wa walls lls.. Practice enlightened self-interest – share forecast and other data with suppliers, and demand the same same of your customers. customers. “Organized interdependence” is the goal. To reach it, offer trust, tr ust, ask for reciprocity and work to improve your communications channel. 6. Avoid Avoid “on “onee size size ts all all” ” soluti solutions ons.. Excellent supply chain management means uggling multiple supply chains simultaneously simultaneously.. op performers differentiate by product, y channel, and by customer.
C E T ~ O F N
Indu In dust stry ry Li ec ecyc ycle less
Analyzing where your organization and industry is in terms of its lifecycle is another way o understand management’ manag ement’ss 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 strategies f companies bringing new products to market, market, but they are just just as powerful in terms of understanding when and why companies spend money on IT planning and governance.
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P U O R G
here 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, Nonetheless, spend a couple of minutes thinking about where your your organization is in its lifecycle. lifecycle. his will help you later when you are prioritizing your projects. If you operate in a slow-moving 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 exp onential growth.
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Porter’s Five Forces Model The following diagram shows Michael Porter’s Porter’s famous strategy model that describes the ve orces of competition that affect a company and an industry. industry.
P U O R G H C R A E S E R H C E
The essential elements in Porter’s Porter’s Five Five Forces model model are: 1. Indu Indust stry ry Ri Rivval alry ry.. Rivalry is intensied by factors such such as a high number of competitors, slow market growth, high xed costs, high storage costs, low switching costs, low levels f product differentiation, and high exit barriers. 2. The The Thre Threat at of of Ne New w Ent Entra rant nts. s. 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 The Thre Threat at of of Su Subs bsti titu tute tes. s. This usually impacts an industry through price competition i.e. the number of suitable alternatives available available at a competitive price.
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4. The The Pow Power er of Suppl Supplie iers rs.. The power of suppliers increases if they can threaten to buy he purchaser, are concentrated, there exists a signicant cost to switch suppliers, or customers are powerful. Suppliers are weakened if there are many competitive suppliers, hey offer commodity products, the purchaser could buy the supplier, and customers are eak. 5. The The Pow Power er of Cu Cust stom omer ers. s. The power of customers increases if there are few buyers ith signicant market share or if they can threaten to buy the producing rm or rival backward integration). The power of customers decreases if buyers are fragmented, uyers are highly dependent on producer p roducer for their output, or there are high switching coss s. co
Applying this framework lets you understand understand the market forces that can impact your rganization. In essence, this model ties everything together tog ether – it, along with a PEST analysis, allows leaders to fully understand all the market forces that can impact their organization. org anization.
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Environmental Analysis (PEST) The Environmental Analysis asks what external forces inuence the company. company. A PEST Analysis is commonly used to determine what w hat these external factors could be. External factors can be categorized in four ways:
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Political P
2. Economic 3. S cial
U O R
. Technological Political: The political environment is important in certain situations where there are legal leg al issues with the company’s products (e.g. tobacco) or disputes between jurisdictions (Canada/U.S. (Canada/U.S. lumber or U.S./Japan automobiles).
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Economic: Economics can play an important role if the company’s company’s product is highly cyclical (e.g.. housing, base metals) or if the company is impacted by changes in the general economic (e.g environment (e.g. retail).
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Social: Social trends can be positive or negative.
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Technological: Tec Technological: Technology hnology also impacts companies and industries because of the new possibilities it creates. Certain industries (e.g. music) music) can be suddenly impacted by new technologies and related business models (e.g. KaZaA).
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E R H
Identi y Your Your Organization’ Organization’ss Core Competencies Competencies
C
Successful managers identify and understand their organization’s organization’s core competencies and take appropriate actions relating to them.
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A core competency is a business function, process, or other discipline discipline that provides signicant competitive advantage for the organization that has it. Core competencies are a subset of all business functions an organization o rganization has (e.g. sales, manufacturing, purchasing, recruiting). Since an organization can’t do all things equally well, well, the core competencies are the major source of differentiation in the marketplace that creates most of an organization’s organization’s prot.
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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. P U O R G H C R A E S E R
Companies’ core competencies do not extend to everything the organization org anization does. For example, SAP is not the world’s best operating system or database software writer. In their case, case, it doesn’t doesn’t really matter because they can partner with Microsoft or Oracle to make sure their enterprise software runs on their platforms.
Identifying Core Competencies ü
an ot er re reso sour urce cess go go. s may e your core competency. However, certain industries have most of their costs in one major category t at s not a cor coree com compet petenc encyy e. e.g. g. a r nes spend most of their funds on airplanes and fuel, but don’ don’tt achieve competitive advantage from these purchases). ü
Similarly, Dell is not effective at research Similarly, and development. They have a signicantly smaller R&D budget than Hewlett-Pac Hewlett-Packard kard or IBM and don’t produce any leadingedge products. However, their efcient, low-inventory manufacturing and supply chain systems don’t 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.
H
Look where the largest portion of nancial
Ask customers why they buy from you. you y ou ave s gn can antt a van anta tage gess t at customers see every day (as opposed to process advantages they don’t really see), customers s ou e mm mme ate y a e to te ou what they think your core competencies are (e.g. cutting-edge products, low price, great g reat
cust cu stom omer er serv serv ce . ü
Ask senior management. Core competencies are usua y part o t e strateg c p an, w c t e executivee team is responsible for. executiv
ü
Review your performance appraisal system or core compe competency tency measure measurements ments an requirements. Ideally, your performance appraisal system should be in sync with your organ or gan za zatt ons over overaa co core re comp compet eten encc es es..
C E T ~ O
Implications of Core Competencies here 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. 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).
F N I
Apply them to other related industries and opportunities . For exampl example, e, if if marketing is your core competency, you can market new products that you don’t today. 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 co mpetencies has major implications for which projects and departments I should support.
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For example, IBM used to have a signicant core competency with manufacturing mainframes and other hardware. h ardware. However, However, other companies have developed similar competencies and eroded IBM’ IBM’ss competitive advantage. Today 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 Factors Key Success Factors are the most important parts of the strategy or conditions that may exist in the marketplace or your your organization without which your strategy strategy would fail. Since conditions change, the Key Success Factors must be identied and monitored in case conditions change.
P U O R G
Key Success Factor Example: General Motors
H
General Motors has large investments and xed xed costs in its manufacturing plants. plants. Because these large xed costs are relatively constant, GM’s GM’s protability is heavily inuenced by the number of units it can sell. Therefore, one Key Success Factor Factor is sales and marketing capability. capability. Similarly, controlling overhead costs is very important. If there were a sudden Similarly, sudden increase in overhead costs, GM would 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. money Factor. GM has several alternatives alternatives of how to structure the compensation package for its sales force. otal 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 factory utilization or the number of units shipped. Note that this can cause problems (e.g. selling selling cars below cost to increase factory factor y 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.
C R A E S E R H C E
General Motors would need some specic nancial information about abo ut the two Key Success Factors it has previously identied: identied: increasing sales units and reducing overhead 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. sold. For the overhead cost cost Key Success Factor, GM would would need to know the total amount of o f overhead spending. spending.
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If GM had an extra 100,000 units of capacity capacity,, and the average contribution per unit sold was $5,000, the total opportunity oppor tunity from increasing units sold would be $500 million.
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Stage 3> Assess the Current IT Situation
Stage
A balanced ITIT Plan must integrate business strategy andStrategic with your infrastructure. In both Stagewith 2 youyour were asked to map the particulars of your organization’s organization’s Business Strategy. In this stage you will map and analyze the characteristics characteristics of the Information Technology Technology Infrastructure of your organization. A strategic IT plan has to integrate with your functi functional onal I plans and infrast infrastructure ructure (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:
3
Optimi Opt imizin zing g IT In ras rastru tructu cture re Info- ec Infoech’ h’ss “Optim “Optimizi izing ng Your Your I Dep Depart artmen ment” t” consu t ng met o o ogy prov es a eta e , stepby-step, process process for analyzing all facets of your I inf infras rastruc tructur turee – I arc archit hitect ecture ure,, proce procedur dures es and processes, and human resources – and for evee op ng an op ev optt m za zatt on p an an..
P U O R G H C R
Organizational infrastructure •
Hardware and software infrastructure Curre Cu rrent nt I pro proje ject ctss
Documenting and analyzing each each of these areas will provide you with a clear picture of where you are currently sitting. sitting. Only by understanding your current position can you begin to develop a strategy for the future.
his product will provide you with the tools an pr proc oces esse sess to ev evee op a co comp mpre re en enss ve an effectiv effec tivee I Infra Infrastructu structure re Plan that that will optimize optimize I in your your organizat organization ion to best serve serve both both the unct ona nee nee s o us ness un ts an t e strateg c I obj object ectiv ives es of yo your ur organiz organizati ation. on. t s st stro rong ng y re reco comm mmen en e t at yo you u co comp mp et etee this method methodology ology concurre concurrently ntly with with Strateg Strategic ic I Planning and Governance.
A E S E R H C
Step 1 – Document Your Your IT Organizational Organizationa l Infrastructure
E T
Prepare an organizational chart of your IT department. This should include functional areas like network support, programmers, prog rammers, and business analysts.
Step 2 – Document Your Hardware and Software Infrastructure Identify and document document your physical physical infrastructure. Without a rm understanding understanding of your existing technology assets, you are essentially operating in the dark and strategic planning will be a futile effort.
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Step Ste p 3 – Au it Curr Current ent IT Pro Projec jects ts Understanding the current workload and spending patterns pattern s is essential to planning for the future. Dening the projects currently being worked on by the IT department will help you understand hether I is aligned aligned with with the overa overallll goals of your busine business ss..
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Step 4 – Understand the IT Environment Analyze the trends in your industry and the actions of your competitors. Look Look at industry trends and create competitor proles.
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In T is Stage
Stage 3> Assess the Current IT Situation Situation............ ......................... .......................... .......................... ................. .... 59 H C
Step 1 – Document Your Your IT Organizatio Organizational nal Infrastructure....................... Infrastructure....................... 62
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Step 2 – Document Your Your Hardware and Software Infrastructure ............ ............ 63
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Step 3 – Audit Current IT Projects..................... Projects.................................. .......................... ......................... ............64 64
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Step 4 – Conduct an IT SWOT Analysis ..................... .................................. .......................... ............... .. 66
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Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ ...................... ......... 68
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ackground ackgroun d > Mapping IT Assets......... Assets...................... ......................... ......................... .......................... ................... ...... 69
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Thoughts on Stafng Needs ............. .......................... .......................... .......................... ........................ ................ ..... 69
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Skills Developme Development nt ............ ......................... .......................... .......................... ......................... ........................ ................... ....... 70 Business Benets of Asset Managem Management ent ............ ......................... ......................... ....................... ........... 70 Rolling Out an Asset Management Initiative............................... Initiative............................................ .............71 71
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Conducting a Hardware Asset Inventory............. Conducting Inventory .......................... ......................... ....................... ........... 73 Conducting Conductin g a Software Asset Inventory ................................... ................................................ ............... .. 75
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Change Managem Management ent ............ ......................... .......................... .......................... ......................... ........................ ............... ... 76
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Asset Management Management Best Practices........... Practices........................ .......................... .......................... ..................... ........ 78
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Understand Understan d the IT Environme Environment............ nt......................... .......................... .......................... ......................... ............79 79
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Workbook Stage 3> Assess the Current IT Situation Situation............. ......................... ......................... .......................... ................. .... 60 3.1 Organizat Organizational ional Chart........ Chart..................... .......................... .......................... .......................... ........................ .............. ... 62 3.2 IT Irregulars ............. .......................... .......................... .......................... ........................ ........................ ........................ ........... 63 3.3 Skills Mapping Tool................. ool.............................. .......................... .......................... ........................ .................... ......... 65 3.4 Network Diagram Primer ............ ......................... .......................... .......................... ......................... ................ .... 67
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3.5 Ven Vendor dor Contact Informatio Information................... n................................ ......................... ......................... ................... ...... 69 O
3.6 Software Inventory... Inventory................ .......................... .......................... .......................... ........................ ...................... ........... 71
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3.7 Hardware Invento Inventory ry ............ ........................ ......................... .......................... .......................... ........................ ............. 75 3.8 IT Expenditu Expenditures res Analysis ............ ......................... .......................... .......................... ......................... ................ .... 84 3.9 Current IT Projects ................................ ............................................. .......................... ........................ .................. ....... 87 3.10 Project Scope Statemen Statement....................... t.................................... .......................... .......................... ................ ... 88 3.11 3.1 1 Industry Trends ............ ......................... .......................... .......................... ......................... ........................ ................. ..... 90 3.12 Competito Competitorr Proles Proles............. .......................... .......................... ......................... ........................ ....................... ........... 92
G H C R A E S
Agility Tips You have to know You know where you are to chart where you you are going. A basic audit of curr cu rren entt n ra rast stru ruct ctur uree, nc u ng ta en entt n ra rast stru ruct ctur ure, e, s ou e a pa part rt o an anyy ajor initiative, from departmental optimization to disaster planning. You You should ave a lot of this information already. already. If you don’t, don’t, perhaps you have more ress re ss ng ma mana nage geme ment nt ss ssue uess to ea w t e or oree st stra rate tegg c eve eve p an ann n ng ng.. ont forget to to form relationsh relationships ips with your your “I irregul irregulars”. ars”. Find Find out what is going going on outs ou tsid idee of of fo forma rmall I .
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Step 1 – Document Your IT Organizational In ra rast stru ruct ctur ure e Objectives: •
Create a map of who does what in your IT department. Document IT service providers and key IT vendors.
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Document I resour Document resources ces (pow (power er users users,, user user groups, groups, I profes professional sionalss in other epartments) that exist outside of the IT department.
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What You Need To To Do
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ü
Prepare an organizational chart of your IT department. department. Use the tool “3.1 Organizational Chart.” his PowerPoint PowerPoint template will help you create a chart that includes the number of people in your department, each employee’s responsibilities, responsibilities, and the volume of activity by task.
ü
Record individ Record individuals uals outsid outsidee of the I departm department ent who who formally or informally informally provide IT services (Such as power users and IT support personnel within other departments). Use the works workshee heett “3. “3.22 I Irre Irregul gulars ars”” to rec record ord names names and and contac contactt information for this important internal IT resource.
H C R A E
ü
Use “3.3 Skills Mapping Tool” Tool” to develop a map of the skills in your IT department. his will help you understand, beyond a simple head count, where your organizational IT skills lie.
S E R H
repare an organizat organizational ional chart of your I departme department nt simil similar ar to to the the example example belo below w. his should include functional areas like network support, programmers, business analysts, and so on. Also include the following information:
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Number of people in your department.
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ach employee’s responsibilities.
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Volume of activity by task (e.g. Volume (e.g. password password reset, desktop recoveries, recoveries, viruses, new application installation).
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P U O R G
Step 2 – Document Document Your Your Hardwar Hardware e and So twar tware e Infrastructure
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Objectives:
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Create a detailed view of all physical IT assets. assets. Audit all enterprise software. software.
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•
Document vendor and service provider contact information. What You Need To To Do Create/acquire a network diagram. For each component that is identied in the diagram, provide the following information: infor mation: component’s name, name, manufacturer and model number, operating system, IP address. See “3.4 Network Diagram Primer” for more. Create a directory of all vendor account account numbers, contact information, service and agreements. Use the worksheet “3.5 Vendor Contact Information” to gather this information.
Create a software inventory. 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. Conduct a complete hardware inventory. inventory. Using the worksheets in “3.7 Hardware Inventory” to list each server, hub, switch, router, rewall, and desktop.
Without a rm understanding of your existing technology assets, you you are essentially operating in the dark and strategic planning will be a futile effort. Managing your I portfoli Managing portfolio o in a current networked networked computing computing environm environment ent requires requires more than simply conducting a physical physical inventory. inventory. While the concept of asset management is familiar familiar to most decision makers, its implementation has largely been sporadic and half-hearted. For example:
E R H C E T ~ O F N I
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•
•
•
Many organizations send out hardware and software inventory surveys, but much much of the information is incomplete and inconsistent. ven 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.
P U O
Asset management, if implemented correctly, correctly, can become an important decision-making ool in any organization. For more information and advice on asset management, refer to the background section of this stage.
R G
Agility Tip: Have You You Been Here Before?
he 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.
H C R A
Don’t reinvent reinvent the wheel. If you have recently gathered infrastructure data, copy it into your workbook.
E S E R
Step 3 – Audit Current IT Projects Objectives:
H •
C E
Createe a consolid Creat consolidated ated record record of all current current I projec projects ts..
T
What You Need To To Do
~ O
ü
Analyze current I expenditures. Use the the workshee worksheett “3.8 I Expend Expenditure ituress Analysis” Analysis” to to record the current prole of expenditures in your IT department. The worksheet includes seven questions you can ask in analyzing current expenditures.
ü
Docume Docu ment nt you yourr I pr proje oject ctss. Use the workshe worksheet et “3.9 Current Current I Proje Projects” cts” to list list current current major IT projects. Use the template “3.10 Project Scope Statement” to create a project descriptio desc ription n for each major major I projec projectt currently currently underway underway..
F N I
Develop a snapshot picture of current IT expenditures.
Understanding your department’s department’s current workload and spending patterns patter ns is essential to planning your upcoming year. year. This section focuses on identifying identifying where your department spends its money and what projects are currently cur rently on your plate.
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Where does your I department spend its budget? If you have just completed completed a year-end, use last year’s year’s gures to complete this section. Alternatively Alternatively,, if you are part of the way through your current scal year, your budgeted gures may provide 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 ser vices
epairs
Hardware
e as e s
Software
raining
P U O R
•
Other
G H
Break down this information further in the following ways:
C
•
Capital assets versus expenses
R
•
Growth rate over time
A E
Perc Pe rcen entt of to tota tall I bu budge dgett •
Percent of organization sales
Clearly dening 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. business. Be ruthless in your your analysis of current projects and expenditures. If projects or expenses do not match the goals of the organization, be prepared to take action. action.
S E R H C
Agility Tip: Project Discipline is Key
E
The Project Scope Statement will help you provide further detail on each ajor project. he better your project information, the better better you will be able to make strategic decisions about ab out projects.
T
nfo-Tech offers a comprehensive consulting methodology, Effective roject Management: Tools, Templates and Best Practices o help you get your rojects 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 ews information as well as at your competitors. What You Need To To Do P
ü
Identify Important Industry Trends. Industry trends are changes happening in the marketplace of technology. Meet with your IT department as well as your your steering committee. Use “3.11 Industry Industry Trends” to work up a list of technology trends that could impact your company’s competitiveness.
ü
Develop Competitor Proles. Use the worksheet “3.12 Competitor Proles” to prole a selection of main competitors. Understanding how your competition is using technology to gain a competitive advantage will provide you you with a point of reference against which you can benchmark your company’s performance.
U O R G H C R A
Looking at what is happening in your industry and with your competitors provides you with one f the best ways to to benchmark your company’s company’s performance. For example, example, you may be using echnology that is becoming obsolete, or are just starting to use a new technology that none of your competitors are using.
E S E R H C E T ~ O F N I
his can be one one of the toughest toughest parts parts of your job. job. If your company is like most, the CEO and other senior management expect you to have an opinion on, or o r knowledge of, everything related to technology. However However,, he pace of technological change suggests hat much of what you knew two years ago is obsolete. Take this opportunity to do an intensive intensive survey of industry trends and the actions f your competitors. competitors. Getting a solid understanding of the current environment ill make the task of keeping up-to-date easier in the long run.
Info-Tech Advisor an Mc McLe Lean an Re Repo port rt Clients of Info- ech Resear Clients Research ch Group Group have have ready acce ac cess ss to tw two o ex exce ce en entt to too o s or tr trac ac ng te tecc no ogy and business trends. Info- ech Advisor Advisor provides provides on-going on-going research research into into I depart department ment managem management ent practic practicee as well well as the the practical implications of technology trends. c ean eport prov es more g - eve a v ce on the management and strategic use of technology in the enterprise. Both products are based on extensive scanning of the busines businesss and I manage management ment envir environmen onment. t.
Industry Trends Staying abreast of industry trends is an on-going process. Schedule some time into your week to eep your knowledge base current cur rent and relevant. Here are some additional tips to help you and your department to keep up-to-date: 1. Us Usee a dive diverse rse set set of in info forma rmati tion on sou sourc rces es.. On a weekly basis, you should at least be be
eading publications focused on technology, business, business, and general news.
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2. Make envir environment onmental al scanning scanning a require requirement ment for for everybody everybody in your your department. department. Assign each person a specic publication or topic area. Make “keeping up-to-date” part of their performance evaluations. evaluations. 3. Create Create an “Ideas “Ideas and and Opportuni Opportunities ties” ” living living docume document. nt. 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 document will become some of
your department’ depar tment’ss future projects. P
Competitor Proles
U
Here are some types of information you should know about your competitors.
O R
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).
G H C
Enterprise systems (ERP, CRM).
R
Here are some ways ways of learning this information:
A
Your Y our employees who used to work for them.
Magazines and other public sources of information.
Competitors’ Web sites.
Vendors.
Customers.
Consultants.
Sort the information into les on your biggest competitors and update the les as you learn new information. Conducting a periodic review of the les will will provide you you with better industry trend data than you will nd anywhere else.
Agility Tips: They Who Know the Competition
E S E R H C E T
alk to your sales sales and marketing people about the competition. competition. hough it’ss a difcult topic to broach, ask about it’ ab out lost sales. How have we been eaten in the past? Is there something the competition is doing better han we are? How is technology technolog y aiding them? How have we used echnology to get ahead of them in the past?
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Stage Summary: Assess the Current IT Situation The IT audit sets a starting point against which you can analyze the gaps between what is and hat should should be. In the next stage stage of this methodol methodology ogy,, you will set set your sites sites on an ideal I situation, one that will help the enterprise achieve its strategic goals. The following chart shows the progress of developing the plan after Stage 3 of the engagement. P
Status
U
Creation Of Steering Committee
one
O
Scope Denition of “Strategic”
one
Strategic IT Plan Kickoff Meeting
one
Preliminary Report With Goals and Timeline
one
Docu cum men entt co corp rpo ora ratte Vi Visi sio on, Mi Miss ssio ion n an and Str Strat ateg egiic Go Goal als s
one
Analyze Core Competencies and Competitive Position
one
Current IT Organizational Structure.
one
C
Hardware and Software Inventory
one
R
Analysis of IT Trends
one
A
Review of IT Against Governance Maturity Model
E
IT SWOT Analysis
R G H
S
Stage
List of Proposed Future IT Directions List of Requirements for Resolving Gaps (Roadmap)
E R
Corporate IT Vision Statement Corporate IT Governance Charter Strategic IT Goals
H
c eva e
C
u get na ys s
E
r or t ze
T ~ O F N I
easures ro ect
st st
Completed Strategic IT Plan Document Comprehensive Strategic Planning PowerPoint
8 8
Strategic 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 Information echnol echnology ogy Strategy Strategy.. Similarl Similarlyy, without without a rm grasp of your current I 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 echnology 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. planning. In this section we offer additional information on o n Information Tec Technology hnology 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.
P U O R G H C R A E S E R
Thou Th ough ghts ts on St Sta a ng Ne Need edss Theories abound on how to organize an IT department, depar tment, including: Organizing around the services to be provided such that business needs are adequately reected.
H C E T ~
Organizing around work roles so that people are easier to replace rep lace when they leave. O •
Organizing around a complete team with a broad skill set to exibly meet a variety of specic missions as they arise.
F N
Each of these methods has its strengths and weaknesses. weaknesses. For example: •
Organizing around services ensures that business needs are being met, but if needs change rapidly; you could be left stumbling to ll the holes. Organizing around work roles offers a simple “cookie cutter” approach, but what if you can’t nd a replacement worker fast enough? In this case, you could be left with a large stafng gap with no one to do the requisite work.
I
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he approach you choose will depend on the pace of your industry and your organization’s organization’s position within that industry. Fast moving organizations need to maximize exibility, exibility, which could lead to more extensive utilization utilization of contractors and other outsourced services.
Skills Development P U O R G
Specic jobs require different skill sets, ranging from technical, to business and management, to personal and interpersonal skills. skills. Degrees of technical versus management skills, skills, for example, ill manifest differently at junior versus senior levels. Beyond generic job type skills and duties, you must consider other factors that relate to your specic organization, such as industry afliation and the specic technologies and tools your rganization employs employs.. Use these tips to help you create and maintain an efcient and responsive IT staff:
H C
•
R A
•
E S
Create a Skills Map: Almost 60% of skills required by IT workers workers are general business skills, not I -specic skills. skills. Build a skills map map that outlines outlines those skills required required by: all orkers, IT workers, specialized specialized IT workers, and those at your specic organization. Look for Skills Upgrade Candidates: Staffers with a high-demand, ready-to-go skill set are expensive and hard to nd. This can really hamper your skills acquisition acquisition process. Workers with low-demand IT skills can be hired and “reskilled” “reskilled” to do what you eed faster and at a lower cost.
E R
•
H C
•
E T ~ O F
•
Avoid Niche Products: Niche technologies (e.g. Forte), or mainstream technologies in a niche combination (e.g (e.g.. COM on andem), demand a big training investment investment in highly specialized skills that aren’t aren’t portable across other technologies. technologies. When that technology ades away, so can employee value. Minimize Training Training in ‘Subsumable’ Skills: Do you want to invest heavily heavily in training or grassroots XML coding, or future XML design tools? Think ahead – invest in skills
hat will last and outsource the skills “du jour. jour.”” Train Small Groups: Don’t train your entire development team on a new technology technolog y. raining small groups of specialists is faster and easier, easier, and allows trainees to do a specic job better. better. As skills become undesirable undesirable over time, time, you have have fewer staff to etrain.
N I
Busi Bu sine ness ss Be Bene ne ts o As Asse sett Man Manag agem emen entt Any business, large or small, can signicantly reduce reduce costs and engage in better decision making by actively practicing asset management. According to20 Gartner properly asse asset can save rganization to 40%Group, per seat per yearimplemented in IT costs. For F or ta management typical enterprise with an 2,500 Cs, this this could translate translate into 900,000 in savings savings over 12 months.
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Gartner Group has also found f ound that the average lifecycle cost for a given g iven asset can be reduced by 37.5% overall by using asset management. International Data Corporation discovered savings of 13% per year on PC stafng costs alone due to asset management initiatives.
he benecial applications of asset management are myriad. Listed in in the table below are the primary business “selling points” of diligent asset management: P U
nanc a
ene ts
c ency an
er or orm m ac accu cura rate te u ge gett ng an or orec ecas astt ng of hardware and software expenses.
ro uc uct v ty
ene ts
e p rea y t e or orga gan n za zatt on or or orga gan n zat on on-wide migrations, installations and upgrades.
O R
Calculate total cost of ownership (TCO) or average price per equipment type.
Accommodate rapid technology changes and deploy new applications more quickly.
G
Uncover vendor accounting and invoicing .
Anticipate and plan plan moves, personnel rans ra ns er ers, s, an or orga gan n za zatt on re rest stru ruct ctur ur ng ng..
H
egot at egot ate e et ette terr ar war are e pu purc rc as ng an software licensing agreements.
ve en users access to t e r g t applications when they need them.
Cancel costly maintenance renewals for unused software.
emove end-user access to “time-wasting” applications.
Identify correct amount of insurance cove co vera rage ge re requ qu re t ro roug ug co corr rrec ectt as asse sett va ue es estt ma matt on on..
dentify potential incompatibilities between compon com ponent ents s pr or to pur purc c ase ase..
E
vo up cat on n pro uct purc ases or double-coverage in contracts.
ea y t e organ zat on to a sor mergers and acquisitions more easily.
E
Disc Di scov over er an and d re remo move ve do dorm rman antt as asse sets ts..
Make th Make the e he help lpde desk sk mo more re pr prod oduc ucti tive ve by g v ng t em access to eac es top s nventory.
Assure the organization organization of software license license compliance, helping to avoid nes, minimize us ne ness ss sr srup uptt on ons, s, an re uc uce e p ra racy cy.. eterm ne ep epartmenta c arge- ac
Deter theft of components by deploying entirely traceable equipment.
ng.
C R A
S
R H
Create at-hand information for IT budgeting and planning.
C
ove to stan ar ze ar ware an software purchasing, allowing for eased support and volume discounts.
T
E
~ O F N I
Rolling Out an Asset Management Initiative Given that comprehensive asset management is enterprise-wide in nature, creating an effective program is a sizeable undertaking. under taking. Follow Follow this 15-point checklist to help you get your plan underway:
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1. Plan Plan for a Sta Stage ged d Ro Roll llou out: t: Ideally Ideally,, an asset management manag ement initiative should be rolled ut in small steps. Start with something you know you can solve, such as a single project that addresses a pre-existing asset category categor y like tracking machines under lease or inventorying a single department. Once O nce you have ironed out the initial process glitches and demonstrated positive results, subsequent projects should be easier.
P U O R G
2. Iden Id tify fy management Affect Affe cted ed Part Partie ies: s: Understand all ofe the constituencies that will heenti asset initiati initiative. ve. hese include includ all of the departments thatbe youaffected you expect by o comply with new policies and from f rom whom you will be collecting data. You need to nderstand nders tand the business business that that the I departm department ent serves serves and the different different units’ units’ goals and bjectives in order to effectively sell the asset management manag ement concept. 3. Buil Build d You Yourr Tea Team: m: Form an asset management team made up of representatives from he affected constituencies constituencies.. his step is critical in order to uncover uncover potential resistance and to ensure end-user compliance. These individuals individuals may also be aware of local attempts at asset inventorying that you don’t know about.
H C R
4. Check Check Current Current and and Histo Historic rical al Initi Initiati ative ves: s: Find out what asset data has already een gathered, for what purpose, and how it is being maintained. By knowing your
rganization’s current state, you can begin to identify areas of greatest need and plan your target goals.
A E S E R H C E T ~ O
5. Underst Understand and Exis Existin ting g Polici Policies es and Proce Procedur dures: es: This includes any hardware and software purchasing policies, IT move/add/change request policies, and so on. One O ne f the goals of asset management is to create create standardized practices. practices. Finding out what hese policies currently demand, if anything, will give give you a good indication of how uch work you will have to do. 6. Gath Gather er Rec ecor ords ds:: Find all technical technical,, nancial, nancial, and legal records records for all I asset assets. s. Apart Apart rom your own department, the purchasing department dep artment is a good go od place to check. You ill need to compare these records against your actual inventory to identify gaps. 7. Pick Pick You Yourr Roll Rollou outt Struct Structur ure: e: Decide on a structured structured plan of attack. Are you going to collect by department and roll into a centralized database, or perhaps tie inventory to irectory services? ser vices? It’s It’s up to you, but do decide early.
F N I
8.
ecide Wh eci Whet eth her or Not to Ou Outs tsou ourc rce: e: Given budgetary and personnel constraints, utsourcing your asset management may be a wise choice. Look for a provider that ffers extra services like infrastructure design and planning, selection and deployment of ools, software migration planning, and software license management in addition to basic inventory services.
9. Organi Organize ze Man Manual ual Ass Asset et Tagg Tagging ing:: All current and incoming assets should be physically agged with unique asset tags, preferably permanent metal metal tags. tags. his information must must
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be recorded. Create and enforce a mandatory mandator y asset tagging policy p olicy.. 0. Set a Sche Schedu dule le:: 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 unscannab le by automated tools. 1. Assi Assign gn Owne Ownersh rship ip:: To make sure that this initiative initiative is converted into an on-going on-go ing process, someone needs to be assigned responsibility. 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. invoices. This is a big responsibility, responsibility, so make sure the chain of command is well established.
P U O R
2. Pick Pick Auto Automat mated ed ool ools: s: Gartner claims that asset management is 60% technology and only 40% methodology methodolog y. If you have more than 200 desktops, an automated asset management solution is a must have. 3. Plan Plan for Agent Agent Install Installati ation: on: 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 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.
G H C R A E S
4. Set Up Up a Base Baseli line ne:: Before using your new software, do a physical count of roughly 5% of your current IT systems. 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 accuracy..
E R H
5. Plan Plan Regul Regular ar Chec Checks: ks: Perform regular asset scans not only o nly to ensure your asset inventory is up-to-date, but also to ensure that your asset management manag ement software is registering newer device specications.
C E T
Combined with rigorous enforcement and follow-up, these 15 tips should place you in good stead for deploying a successful asset management initiative.
~ O F
Conducting a Hardware Asset Inventory
N I
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. devices. This infor mation is critical for technical planning and support as well as nancial management. One of the major early benets of conducting con ducting a hardware asset asset inventory is the discovery discovery of dormant or excessiv excessivee assets. Such assets are nancially wasteful on many fronts, including cost of storage and lack of revenue-generating use. Consider these statistics statistics from Micropath:
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•
The average corporation has about 20% more workstations than they originally thought. he percentage percentage of out-ofout-of-service service I equip equipment ment – desktops, desktops, laptops laptops,, servers, servers, monitors, monitors, printers, modems, etc. etc. – runs r uns between 17% for fo r medium-sized companies and over 27% or Fortune 1000 companies.
Careful structuring of the information you wish to collect is an important rst step. You You P
need to decide early on the level of detail you wish to achieve in your asset registry. Below Below is a comprehensive list of elds you may wish to include for each each discrete component.
U
Identication Data
O R G H C R A E S E
ss gne user epartment Physical location
omponent ma e
omponent mo e
Unique asset identication (serial number, asset tag number, bar code)
m n st strrat ve at ata a Date of acquisition
Purchase order number
Purchase/leasing price
Contract information (maintenance and support)
Le L ease terms (if any)
Warranty information
Service history
Usage history
sto st or ca
ata at a
Move/add/change history t er nsta e
ar ware
nsta e so so tware
ssoc ate pe per p era s
Many hardware asset inventories will be conducted at the PC or server ser ver level: that is, the components will be tied to and/or listed as part of an individual machine. machine. As such, it is particularly important to itemize each individual component within the PC or server, including:
R
rocessor name, make, and model
H
•
C •
nstalled RAM All peripherals (keyboard, mouse, monitor, monitor, and modem)
E T ~
Video card •
O
Network card Number, size, and type type of disk drives
F
Amount of remaining disk space
N I
•
Any other drives (CD, (CD, DVD, DVD, tape, and zip)
f a component, like the ones mentioned above, is is a part of a larger system, it is a good practice o note which system the component is tied to using the larger system’s system’s unique identier.
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Potential Problem Areas: Performing asset management on wireless and mobile devices is difcult given that they are highly portable, have rapid usage cycles, and are difcult to locate exactly.. Polling a network to nd out where they are is often not an option. While including exactly mobile and wireless devices in your asset management plans is important, put this project at the bottom of your to-do list. Start Start by mandating the use of specic 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. he information you collect can be used to better manage license and support contracts, plan technology implementation, troubleshoot, and perform better nancial management. Compared with hardware, software is something something of an “invisible” asset; because it is less less physical, it is much harder to track and much easier to misuse than its hardware counterpart. For example, the average average organization spends 10 to 20% of their software investment investment
P U O R G H C R
on software support services. Unbeknownst to them,assets. however, most do not actually use aupdates sizeableand portion of these paid-for, yet superuous, assets . As with conducting a hardware asset inventory, inventory, you need to to decide which data elds you wish to populate. See the table below for key information infor mation to track in your software inventory.
A E S E
Identifcation Data
Administrative Data
Unique asset identication serial number, product umber, license number)
ate of acquisition
Application name
urchase order number
istorical Data
R
Support histor y H C
Usage monitoring details
Application vendor Application version
Cost of license Cost of annual support and pdate fees
Move/add/change Move/add/c hange history Training history
hysical location
License type, ter ms, and conditions (maintenance and support)
Consulting history
Assigned user/department
License expiration date
Workstation/server upon Workstation/server hich software is installed
Warranty W arranty information infor mation
E T ~ O F N I
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Change Management Asset management isn’t 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 o remain useful, it is essential that it remain remain reective of the actual state of affairs in your rganization. P U O R
he change management aspect of asset management involves the recording of all installations, removals,, and conguration changes made to hardware and software. This is particularly useful removals between actual inventory audits that just present present a snapshot of what you have at a specic period in time. The result for IT is the ability to engage in risk management by responding to rganization expansions, employee changes, and technology technolog y advances. f a hardware component is redeployed, make the following following changes to the asset database:
G H
•
•
C R
•
A
S
f the hardware is placed in storage, then change the workstation record.
f software is added or removed, removed, make the following changes to the asset database:
R
f it is a peripheral, then change the workstation identication to which the asset is is allocated.
f the hardware is slated for disposal, then ag the asset as removed removed in the database. If it is a workstation and has associated peripherals that are not being disposed, then delete he peripherals listed and redeploy them.
E
E
Location and/or staff to whom the hardware is assigned.
•
f software is installed, then add a unique identier identier that ties it to the workstation workstation or server upon which it is installed. Add an install date.
H C
f software is transferred between machines, machines, then change the workstation identication eld.
E T ~ O
f the software is permanently removed, ag it as deleted in the registry registry.. ngaging in rigorous change management practices is probably the most critical, yet hard to control, aspect of asset management. Managing change will necessarily involve involve the development, communication, and enforcement of enterprise-wide policies for it to be effective.
F N I
Example: Tracking Tracking Component Lifecycles Let’s walk through the process of tracking a PC and an operating system license over the course Let’s f their respective lifecycles. lifecycles. (The data provided in this example is for fo r demonstration purposes nly and may not be accurate.) tep 1 - Requisition: Enter the requisition requisition information into the asset database. his can be
a single-eld entry that lists the requisition date and number, who requested the purchase (by name and department), and a brief description and statement statement of anticipated use of the intended system. In essence, you are earmarking a place in the asset repository for fo r your new acquisition.
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Step 2 - Procurement: When the asset arrives ar rives and before it is used, it is tagged tagg ed with an asset tag and described in the asset database. Step 3 - Deployment: Once a user for the asset is identied, add the following information to the asset database. C
Dell Optiplex
ser
m y
ocat on
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R G H C
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Step 4 - Maintenance: The asset is subject to regular inventories inventories,, usage monitoring, updates, and support. When each of these events occurs, occurs, the following needs to be recorded in the asset database:
E
Hardware - PC
R
Move/add/change history
S E
07/07/01: Added 32MB RAM : n ows ro ess ona a e - no prev ous operat ng system
H
23/05/01: Jammed CD-ROM drive (technician deployed onsite)
C
Usage history Software - Operating System
Basic ofce use
T
Move/add/change hi history
15/03/01: Li License tr transferred fr from PC PC PC PC000221 to to PC000762 - same user
Service history
Support history sage mon to tor ng ng et eta s Training history
onsu t ng
story
E
~
27/09/00: OS crash - technician deployed onsite 14/06/01: Installation of Service Pack 2 aunc e ours per wee on average. weekend use.
o
End-User: Windows 2000 Professional Introduction (2-hour seminar for all end users) ta : cros croso o t ou ours rse e ta en y an ane e on ones es one
If a hardware component or software license is moved moved to a different machine, changes must be recorded in at least two elds:
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Details must be entered in the “move/add/change history” eld. Include activity dates in all history-related histor y-related elds. The unique identier in the “workstation/server installed on” eld must must be changed to hat of the new workstation.
P U O R
tep 5 - Retirement: Upon retirement of an asset, an accurate account account of where it is, 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. org anization.
f a component is to be discarded, ag that asset’s asset’s record in the registry as deleted. nsure that changes are also made in the “installed components” and “associated peripherals” elds.
G H
A calculation can also be made at this point about how much the system system cost over its lifecycle. lifecycle. This is valuable in helping to identify potential cost-cutting areas as well well as for planning future budgets and investments investments..
C R A E S E R H C E T ~
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. Bew Bewar aree of of Cu Cult ltur uree Sho Shock ck:: Asset management will probably require a restructuring f how certain traditional processes, such such as purchasing, are done. Some users and epartment heads may resent this or have trouble making the transition. Learning to comply with new asset management policies and procedures p rocedures will likely require some raining, so be prepared. 2. Ensu Ensure re EndEnd-Us User er Comp Compli lian ance ce:: Behavior modication may be in order to make your asset management plan achieve the desired benets. benets. Here are some examples of what
you may need to communicate in in terms of end-user participation: •
O
Ensure that remote machines are left turned on during the scanning period. Mandate that users Mandate users notify I prior to any changes changes that might might affect inven inventory tory.. This includes hires, terminations, terminations, moves, and and strategic plans that involve IT IT assets. Employ e-mail or an asset change form on the intranet to facilitate this communication.
F N I
If the number of available software licenses licenses is tight, ask end users to schedule schedule use or 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. 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. Enfo Enforc rcee Sta Stand ndar ardi diza zatio tion n: ME A Group Group says says standard standardizati ization on of hardw hardware are and software purchased for the desktop alone can reduce costs by up to $650 per seat per year. Standardization Standardization limits the number of products that helpdesk and IT staff need to learn to support, suppor t, as well as allows greater leverage in purchasing volume discounts. . Automat Automatee Sof Softw tware are Dis Distri tribut bution ion:: Deployment is a key stage in the lifecycle of an asset, and an excellent cost-saving opportunity. opportunity. Automating software distribution is a simple, labor saving device that has a big impact on the bottom line by lowering the cost of managi managing ng I as asse sets ts.. 5. Focus Focus on on Softw Software are Asse Assett Manage Managemen mentt First First: Potential cost-savings associated ith well-managed software assets include overall reductions in license fees, update fees, and software support. Other areas of benet include system administration, administration, and management time spent on budgeting, budg eting, documenting, and guring charge backs. Because of these factors, software asset asset management has the fastest return on investment. . Perform Perform In Inven ventory tory Sca Scans ns Dur During ing Off Hours: Evenings and weekends are ideal times to perform automated scans since the tax on the system and associated bandwidth is reduced. 7. Comm Commun unic icat atee Wit With h Oth Others ers:: To get the most benet from asset management, the data gathered through this process must be made available to nancial, administrative, administrative, and technical planners, as well as system administrators and the helpdesk. Key data includes contract terms, hardware and software inventory, inventory, accounting, maintenance records, change history, support history, and other technical and nancial information. Decide the types of reports needed and who will get them.
P U O R G H C R A E S E
8. Broad Broadca cast st You ourr Res Resul ults ts:: Publicize the benecial results of your efforts. This will not only make you look like a cost-saving star, star, but it will also help change the minds of buyin hold-outs.
R H C
Understanding the IT Environment
E T
Environmental Environment al scanning scanning is becoming becoming a skill required required of more and more more I manager managers. s. Understanding trends in your industry and the actions of your competitors has never been more importa imp ortant nt to to the the I fun functi ction. on.
~ O F
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 specically 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 your technology decisions is a difcult task at best. Thisbasis. does not mean, however, that that you do not have to scan the environment on an on-going
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ecognizing the business ramications of new technologies and trends should be the responsibility of company business executives. executives. However, pdating executive executivess on new pportunities and potentials p otentials are your responsibilities.
Competitor Proles P
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 department’s performance.
U O R
n some cases, every company in your industry may be using the same technology, but in others you may be able to gain competitive advantage advantage by implementing systems that differentiate your company.
G
Knowing Your Your Competitors Pays Off
H C R A E S E R H C E T ~ O F N I
Organizations with a Strategic IT Plan were more familiar with the IT strategies of their nearest competitors than those without. w ithout. Familiarity with competitors’ strategies is generally low, low, but use f a plan appears to drive some investigation investigation of competitors’ IT strategies and departments. departments.
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Stage 4> Propose a New IT Situation
Stage
Now comes the fun part. Through the rst three stages of this methodology, you have have focused on the past and present of your organization and its use of Infor mation echnology. Now it is time for you, and your steering committee, to set your sights on the future.
4
To T o this point in the methodology you have gathered information on two important issues:
P U O R
Where You Are. By examining and documenting organizational infrastructure, current systems, and current projects you should now 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 To Be. By documenting your company’ company’ss strategic objectives, as ell as its market and core competencies, competencies, you have begun to construct a picture of here 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 proposi prop osing ng a new new I sit situat uation ion.. Be bold! ry not to worry too much about what can be done in the short term. This is your opportunity to look at the future future and and think think about about how I can make a difference. difference. The particulars of what can actually be accomplished short, medium, and long term will be b e addressed in the next stage.
Step 1e–a Analyze an W nesses IT Strengths
G H C R A
Do You Have Your Act Together?
E
Your information technology department has a Your critical crit ical role role to play play at this stage stage of strategic strategic I p an ann n ng ng..
E
Your department will be expected to provide Your provide ea ers p n p tc ng new n t at ves t at can be tested against strategic priorities priorities.. he department can also be a valuable resource for evaa ua ev uatt ng an sc scop op ng ou outt eta eta s or eass ea provided by stakeholders in other departments. depar tments.
H
S
R
C E T ~
While strategic I planning goes beyond the or er erss o t e epar ep artm tmeent nt,, you a so ont want to be in a position where your your future is entirely dictated externally externally..
Review your Review your current current I situ situation ation 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 Conduct a analysis of current strengths, weaknesses, opportunities and threats (SWOT).
Step 2 – Brai Brainst nstorm orm Tec no ogy Opp Opport ortuni unitie tiess 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.
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Step 3 – Document Document Your Your Resu ts Document your 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.
P U
In This Stage Stage 4> Propose a New IT Situation Situation............. .......................... .......................... .......................... ....................... .......... 81
O
Step 1 – Analyze IT Strengths and Weaknesses ................ ............................. .................... ....... 83
R
Step 2 – Brainstorm Technology Technology Opportunities............. Opportunities .......................... .......................... .............86 86
G
Step 3 – Document Your Your Results ............................ ......................................... .......................... ................... ...... 88
Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ ...................... ......... 90
H C
ackground ackgroun d > The Art of Brainstorming ........... ........................ .......................... .......................... ................... ...... 91
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Brainstorm of One (Brainwriting (Brainwriting)) ............ ......................... .......................... .......................... ....................... .......... 92
A E S E
Wor
oo
Stage 4> Propose a New IT Situation Situation............. .......................... .......................... .......................... ....................... .......... 94
R
4.1 Questions to Focus Discussion ............ ......................... .......................... .......................... ................... ...... 96
H
4.2 IT Governan Governance ce Maturity Model ............. .......................... .......................... .......................... ................... ...... 98
C
4.3 SWOT Analysis ............. .......................... .......................... .......................... ........................ ........................ ................ ... 105
E
4.4 Future IT Options Questionnaire ............ ......................... .......................... .......................... ............... .. 114
T
4.5 Brainstormin Brainstorming g Tool.................. ool............................... .......................... .......................... ........................ .................. ....... 121
~
4.6 Summary of Strategic Objectives Objectives ........... ........................ .......................... .......................... ............... .. 124
O
4.7 Summary of Strategic Directions............ Directions ......................... .......................... .......................... ............... .. 125
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Agi ity Tip: Keep t e Focus Externa his is not a referend referendum um on the effect effective iveness ness of the I departm department. ent. While the IT department will likely play the largest role in the IT SWOT SWOT analysis analy sis of the enterprise enterprise,, don’t don’t forget forget to address address and analyz analyzee how I is eing used throughout the organization to advance the corporate goals you documented in Stage 2. For example, if a particular department has forged a productive elationship with an external IT ser vice provider, the strengths and eaknesses eaknes ses of that relations relationship hip should should be consi considered dered as part of the I SWOT analysis.
P U O R G
Step 1: Analyze Strengths And Weaknesses Weaknesses
H
Objectives:
C R
•
Review your current situation to identify specic specic issues of strategy and governance. Analyze the strengths, weaknesses, weaknesses, opportunities and threats of IT in your enterprise.
A E
What You Need To To Do 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 ocus on key issues of strategy and IT governance. Encourage steering group members to share the questions with their constituents and gather their feedback. Benchmark Current IT Management Practices Against “4.2 IT Governance Maturity Model”. Analyze your current level level of IT Governance against this governance maturity model. This will help you map out what needs to happen in the short shor t and long term to improve Strategic IT governance. Conduct a directed SWOT analysis with members of your steering committee. Discuss everybody’s 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 esh out the strengths, weaknesses, weaknesses, opportunities oppor tunities and threats faced by enterprise IT IT.. Analyze all I initiatives. Be sur suree to to consi consider der the SW SWO O for all I bei being ng used used in the rganization, 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 work being done is most effective toward the organization achieving its goals. To get at the issue of effectiveness To effectiveness,, begin by asking tough questions. The Board Brief on IT Governance, which is based on Control Objectives for Information Infor mation and related Technology (COBI ), notes notes that that asking asking the tough quest questions ions about about I is the the necessary necessary rst rst step step in deve developing loping
S E R H C E T ~ O F N I
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he outcome measures, best practices, practices, key success factors and performance drivers of successful governance. Such questions would include the following:
o
ncover •
ssues
ow often do IT projects fail to deliver what they promised? Are end users satised with the quality of the IT service?
P
Are sufcient I resources, infrastructure and competencies available available to meet strategic bjectives?
U O
What has been the average overrun of I operational budgets? How often and how uch do IT projects go over budget?
R G
ow much of the IT effort goes g oes to reghting rather than enabling business improvements?
H C R A E S E R
To Fi Fin Out Ho How Ma Management A
resses t e IT IT Is Issues
•
ow well are enterprise and IT objectives aligned?
•
ow is the value delivered by IT being measured? What strategic initiatives has executive management management taken to manage I ’s criticality elative to maintenance and growth of the enterprise, and are they appropriate? s the enterprise clear on its position p osition relative to technology: pioneer, early adopter, ollower or laggard? Is it clear on risk: risk-avoidance or risk-taking?
H C
s there an up-to-date inventory of IT risks relevant to the enterprise? What has been one to address these risks?
E T ~ O
Ahese more extensivebelist is included “4.1your Questions to Focus Fstrategy ocus Discussion”. tackl tackle e questions, sure to reviewinboth corporate strateg y (from StageBefore 2) andyou your current T situation (from Stage 3). Distribute the questions to your 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 ill be discussed further in Stage 7: Build a Strategic Decision Making Framework.
F N I
T e Go Gove vern rna anc nce e Ma Maturity Mo Mo e he introduc introduction tion to to the Strat Strategic egic I Plann Planning ing and and Governan Governance ce methodo methodology logy states states that I 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 practi practices ces in in I Gove Governance. rnance. “4.2 I Gov Governance ernance Matur Maturity ity Model” Model” is based based on the maturit maturityy model outlined in Control Objectives for Information and related Technology Technology (COBIT). The model looks like this:
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P U O
his Strategic Strategic I Plann Planning ing and Governance Governance methodol methodology ogy lays out the steps steps for moving moving to a Level 3 – Dened 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.
Dirrec Di ecte te SW SWOT OT An Ana a ys ysis is
R G H C R
A SWO analysis is a simple and powerful way way of analyzing an organization’s organization’s corporate capabilities. The temptation in completing this section is to pick some generic areas, areas, or pick areas for political reasons. For example, stating, stating, “the employees are Acme’s Acme’s biggest strength” is an easy answer with which nobody will disagree, disag ree, but which provides little insight into the reasons why Acme is actually successful. successful.
A
Focus your analysis of strengths, weaknesses, weaknesses, opportunities and threats upon the key areas used in “4.1 Questions to Focus Discussion” these include:
R
Governance and Accountability Accountability..
E S E
H C
IT/Business Alignment. •
IT Skill Sets and Performance. Process and Project Management.
•
Budget Performance.
E T ~ O F
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, weaknesses, opportunities, and threats for each of these categories categori es in the “4.3 “4.3 SWO SWO Analys Analysis” is” tool. tool.
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Step 2 – Brainstorm Technology Opportunities Objectives:
Brainstorm Brains torm various various options options for for I in the future future of the organization. organization. •
nvolve the widest possible circle of stakeholders in the exercise. What You Need To To Do
P ü
U
ready for the upcoming brainstorming brainstor ming meeting is key to having a successful outcome. Distribute “4.4 Future IT Options Questionnaire” in advance to those attending meetings.
O R G
ü
C R A
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.
H
Lay the ground rules and prepare for the future. Planning ahead and getting everybody
ü
Hold brainstorming meetings with stakeholders. Distribute the same questionnaire as
well as any of the ideas already on the table. Meeting attendees attendees could include: senior management, middle management, power users, and specic application users. Use “4.5 Brainstorming Tool” to document ideas coming out of these meetings and the one within your department.
E S E R H C E
Are there potential opportunities to use technology to further the goals g oals of the business? What can be done using technology technolog y 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 eliver value to your company. company. Use the IT Options Questionnaire to get g et participants thinking of how I might t into the company’ company’ss future. future. Getting everyone involved in, and excited about, generating ideas for capitalizing on technology ill give you the chance to shape the way your company thinks about the IT department.
T ~ O F N I
Brainstorming Meetings Your objective objective is to nd the best possible ways ways that technology can be used to help your company.. o do this, company this, you need to pull in a variety of people from your your company. 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. meetings. 1. First, First, hav havee a meet meeting ing wit with h your your own own IT IT staff staff and and go through the list of ideas they generated from the questionnaire. The goal in this meeting is to come up with as many ifferent technology-related ideas as possible. •
Make your staff accountable for coming up with new ideas to help your company. company. Refer back to the “Ideas and Opportunities” document discussed in Step 4 of Stage Stag e 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 presenting an initial list of possible ideas that your department can undertake. 2. Next, hav havee a meeting meeting (or meetings meetings)) with with the broade broaderr community community. Expect this meeting to take approximately two hours. end out your compiled list of ideas well ahead of time, along with a meeting agenda. Stick to your timeline timeline as much much as possible.
During the meeting, brainstorm the various options that were brought up by he questionnaire. questionnaire. Encourage discussion, debate, and even disagreement. Only by pushing the envelope will you come up with truly tr uly brilliant ideas.
P U O R
his is your opportunity to “blue sky” about ideas to reinvent r einvent the business and change your industry. industry. At this point don’t don’t discount any ideas, ideas, regardless of size r scope. In other words, don’t don’t say that any ideas “wouldn’t work” work” – consider every ption. Focus on determining which options provide your company with the greatest business benet.
Before adjourning your meeting, make sure that you you arrive at a list of options and potential avenues to follow. follow. his list will be used to create the follow-up document discussed next.
Agility Tip: Controlling the Chaos
G H C R A E S E
rainstorming sessions are a great way to both generate new ideas and o push your own thinking outside of the box. However, without strong leadership, brainstorming sessions can get out of control and end up eing counterproductive counterpro ductive.. e sure to read the background articles on brainstorming and “brainwriting” (in this Stage) for tips on sparking and leading effective rainstorms. Consider designating a third party to be b e moderator/ secretary for your sessions, somebody with a methodical/procedural bent shouldn’t be hard to nd somebody like that in IT).
R H C E T ~ O F N I
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Step 3 – Document Your Results Objectives: •
Create a summary of project ideas from the brainstorming sessions. nclude, where possible, cost estimates for making the ideas a reality reality.. What You Need o Do
P U
ü
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 Estimate the cost of each idea if it were to become a formal project. (This includes outsourced IT projects.) projects.)
ü
Follow-up and document. old a follow-up brainstorming meeting with your steering committee. Review 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. values. Use “4.7 Summary of Strategic Directions” to record and list all possible projects. projects.
O R G H C
Use the “4.6 Summary of Strategic Objectives” Objectives” form to list the overriding overriding objectives of core R A E S
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 disposed to supporting pen source development, and senior management is not averse to exploring this option from a cost savings point of view view,, one of your objectives may may be to:
E
“Move toward adopting proven open source tools and applications for all core echnologies.”
R H
On the other hand, your analysis and brainstorming could lead to an opposite set of objectives:
C
“Seek industry standard commercial tools and applications for all core technologies.” technologies.”
E
“Continue to strengthen our relationship with key enterprise technology vendor
T
Microsoft.”
~ O
The list of objectives you put together here will inform the Strategic Objectives Objectives and Core IT Values Val ues sections of the Strategic Plan which you will construct at the end of this Methodology.
F N I
Projects List Your brainstorming brainstorming sessions will also yield a wish list of specic projects ideas aimed at advancing the core strategies of the organization. For each proposed IT project, include the ollowing information: •
•
Descriptio Descr iption n of option. Benet to the business. stimated 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. business. Using this process to create a list of possible projects will also help when it comes time to implement because you you will already have buy-in from key stakeholders.
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Stage Summary: Propose a New IT Situation The 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 stag e 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). he following chart shows the progress of developing the plan after Stage Stage 4 of the engagement. P
Status
Stage
Creation Of Steering Committee
Done
1
O
Scope Denition of “Strategic”
Done
1
R
Strategic IT Plan Kickoff Meeting
Done
1
G
Preliminary Report With Goals and Timeline
Done
1
Docu Do cume ment nt co corp rpor orat ate e Vis isio ion, n, Mi Miss ssio ion n an and d St Stra rate tegi gic c Go Goal als s
Done Do ne
Analyze Co Core Co Competencies an and Co Competitive Po Position
Done
Current IT Organizational Structure.
Done
Hardware and Software Inventory
Done
R A
Analysis of IT Trends
Done
Review of IT Against Governance Maturity Model
Done
4
E
IT SWOT Analysis
Done
4
S
List of Proposed Future IT Directions
Done
4
E
List of Requirements for Resolving Gaps (Roadmap)
5
R
Corporate IT Vision Statement
6
Corporate IT Governance Charter
6
Strategic IT Goals
7
Achievable Measures
7
Budget Analysis
7
E
Prioritized Project List
7
T
Completed Strategic IT Plan Document
8
Comprehensive Strategic Planning PowerPoint
8
Strategic Planning Communication Plan
8
U
H C
H C
~ O F N I
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Background > The Art of Brainstorming Brainstorming is a creative idea generating technique which results results in a set of ideas from which we can choose, and it also forces us away 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 to ensure that you succeed succeed at brainstorming with a group. .
Sched Sch edul ulee a Mee Meeti ting ng:: Everyone has a busy schedule so make sure that you book bo ok their time in advance. Invite those who will be open to share their ideas and ensure that you have coverage coverage from all the required viewpoints. viewpoints. The ideal number of participants is 4-7 members.
P U O R G H C
2. Desi Design gnat atee a Reco Record rder er:: This individual will be kept very busy writing down down the ideas that will be generated, and therefore should not be a participant par ticipant in the actual brainstorming. 3. Disc Discus usss the the Rul ules es:: here should be a dened 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. key. Quantity supersedes quality because because it has been proven in history that the best ideas are generated when the highest numbers of ideas were being generated. . Dele Delega gate te a Mod Moder erat ator or:: A moderator is responsible for keeping order and ensuring the discussion stays on topic and moves moves in a logical manner. For example, itit is benecial to build on existing ideas before new ones are tackled. The moderator can also use the following techniques to facilitate the idea generating process. •
ose an initial question that will encourage thought into what the brainstorming session should provide ideas about, or what you you are attempting to solve. solve. This presents a discussion starting point and it frames f rames what the ideas/solutions are intended to resolve. dentify 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 nd linkages between key words that will assist in idea generation.
5. Reg egul ulat atee Ti Tim me: Sessions are not recommended to go any longer than 15-20 minutes
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ithout breaks. Do not confuse a lull in idea generation as the end of idea generation. You will will nd that after people have had the opportunity to “relax their minds,” minds,” additional idea generation will recommence. 6. Make Cop Copiies: After the session session has concluded, make copies of the ideas that were generated and distribute them before the next meeting. meeting. This allows for closer study and he ability to unearth further fur ther ideas for the next meeting. P U O R
7. Add Add an and d Ev Eval alua uate te:: At the next scheduled scheduled meeting, add the new ideas and evaluate 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. g roups.
Brainstorming is a method to facilitate creative idea idea generation. Ensure that you understand, understand, encourage and properly use the keys to unlock the minds paralyzed by daily rituals.
G H C R A E S
Brainstorm of One (Brainwriting) One of the reasons you are distributing the options questionnaire is to encourage thinking on echnology 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 scientic research suggests there is more to brainstorming than originally hought. Scientists are studying studying cognitive processes processes and looking deeper into human behavior behavior to push people to their creative heights.
E R
sychologist Paul Paulus, Paulus, for example, has spent the last 14 years studying brainstorming echniques at the University of exas Arlington Group Creativity Creativity Lab and has discovered the ollowing:
H •
C
o not overuse group brainstorming as groups g roups create distractions, conformity, and social inhibitions.
E •
T
Groups illusionsthe of task. their own effectiveness and therefore prematurely believe hat theyharbor have completed
~ •
O F N I
olitary brainstorming is as effective as group brainstorming. Groups with 4 embers generated about half as many ideas as 4 individuals brainstorming individually alone.
deally, you want to get the most out of individual and group brainstorming. deally, brainstor ming. 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 istributes the idea to others to obtain feedback feedback and additional ideas. his technique has been proven to generate 40% more ideas than individual brainstorming.
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Stage 5> Perform a Gap Analysis
Stage
It’s reality check time. In Stage 4 you were asked to blue sky a little bit It’s about how IT might play a critical role in the future competitiveness competitiveness of your organization. At the time, you were advised to be bold and to not worry worr y too much about what it might take to get there.
5
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 matching it against your current situation, you will be able to create a roadmap for your organization.
If you have completed completed all of the sections in the workbook workbook up to this point, performing a gap analysis should be a fairly straightforward process.
P U O R G H C
Step St ep 1 – Ana Ana yze A ig ignm nment ent Gap Gapss Review the results of “Stage 2: Document Your Your Business Strategy” and “Stage 3: Assess the Current IT Situation” in the context of the four quadrant strategic alignment model.
R A E S
Step 2 – Analyze Infrastructure Gaps Assess the IT requirements of the projects and areas of investment you identied identied in “Stage 4: Propose a New IT Situation”. Look at where current IT systems and skills sets do and do not fulll those requirements requirements..
E R H C
Step St ep 3 – Sum Summa mari rize ze an Re Reso so ve Ga Gaps ps Put together a summary of the gaps identied in both Step 1 and Step 2 and chart the implications for your IT strategy of addressing those gaps.
E T ~ O F N I
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In This Stage Stage 5> Perform a Gap Analysis............. Analysis .......................... .......................... .......................... ........................ ................ ..... 93 Step 1 – Analyze Alignment Gaps. ............. .......................... .......................... .......................... ................... ...... 95 Step 2 – Analyze Infrastructure Gaps................................... Gaps................................................ ................... ...... 96 P U
Step 3 – Summarize and Resolve Gaps .......................... ...................................... ....................... ........... 97 Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ ...................... ......... 98
O R
Workbook
G
Stage 5> Perform a Gap Analysis............. Analysis .......................... .......................... .......................... ........................ .............. ... 126
H
5.1 Assess Yo Your ur Alignment................... Alignment................................ .......................... .......................... ....................... ..........128 128
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5.2 Review Strategy to Assess Skills ................................... ................................................ ................. .... 138
R A
5.3 IT Infrastructu Infrastructure re Gap Analysis ............ ......................... .......................... .......................... ................... ...... 141 5.4 Recommendations Recommendations to Resolve Strategic Gaps................................ Gaps................................143 143
E S E R H C E T ~ O F N I
Agi ity Tips Before you meet with anybody to discuss the gaps, g aps, take a few minutes alone to play the Devil’ Devil’ss advocate. Write down ten things you wish you did better. better. hen compare your your list to corporate objectives. 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 orking 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 corp orate strategy. What You Need To To Do Review your strategic position. Review your 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. 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.
ool “5.1 Assess Assess Your Your Alignment” is based on the four-quadrant four-quadrant strategic alignment model. he tool is divided into ve sections. Sections one through four allow you to map the infor mation you have gathered so far into the four quadrants of the alignment model. For exampl example, e, in section section “4.a” “4.a” of the tool you you are asked asked “Outline “Outline the the key parts parts of your I infrastructure such as the main platforms, platfor ms, hardware, software, software, and network congurations that you support.” You should be able to complete this table with information infor mation gathered in your Stage 3 IT Assessment.
P U O R G H C R A E S
The most important part of the tool, from a gap analysis perspective, is the nal section. section. In section 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. he questions questions include:
E R
1. Do the current current skills skills and processes processes of the organizati organizational onal infrast infrastructure ructure (from (from Section Section 2) 2) support where the company wants to go in terms of strategic goals (Section 1)? If not, no t, hat are the gaps?
H
2. How can informatio information n technology technology improve improve business business proces processes ses that that will help help the company company meet strategic goals?
T
3. What enterprise enterprise-wide -wide technol technological ogical initia initiativ tives es would would most benet benet the the strategic strategic goals 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).
O
4. Do your current current distinguish distinguishing ing competenci competencies es and strategic strategic deliv deliverable erabless (your answers answers to to 3-A and 3-B) relate to future strategic priorities of the organization? org anization? If not, what has to be done? 5. Assuming Assuming that your your IT strategy strategy aligns aligns well well with your your business business strategy strategy,, and that the the organizational infrastructure and processes are well-suited to meeting strategic goals, hich parts of your IT infrastructure (architecture, processes, and skills) best deliver deliver on functional integration with other departments and strategic t?
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6. What elements elements do do not t either either horizontal horizontal or vertical vertical alignm alignment ent and what what elements elements will will ave to be built or bought? From this discussion use the Alignment Gap Summary to list action areas where alignment gaps might be addressed.
P U
Step 2 – Analyze Infrastructure In frastructure Gaps Objective:
O
Analyze gaps between current infrastructure and the proposed new IT situation.
•
R
What You Need To To Do
G
ü
Identify future requirements. Completing a gap analysis between your current systems and your your vision vision of the future future of I at your your company company requires requires you you to identify identify all of the IT requirements needed in the future. Use “5.3 IT Infrastructure Gap Analysis” Analysis” to enter these requirements requirements..
ü
Identify the gaps. Using the Infrastructure Gap Analysis ool, go through your list of future IT requirements. requirements. Compare them to current capabilities. Make Make note of where current capabilities don’t match future requirements requirements.. hese are your gaps.
H C R A E S E R H C
Depending on the level of detail you drilled down down to when creating your vision of the future in he previous stage, extra work may or may not be necessary here. Your objective objective should be to make your your vision of the future as concrete and detailed as possible. possible. You need to to determine specically what you will need in the future, so that you can evaluate evaluate hether or not you currently cur rently have the capabilities and what you need to do to bridge the gap.
E
very time you identify an I requirement, write it down in a separate list. he more detailed you make your list, the more useful it will be when you are trying tr ying to nd gaps g aps in your current
T
syss em sy emss.
~ O F N I
After you have completed a list list of requirements for each procedure, the next step is to compile he list into one comprehensive master list of IT requirements. The gap analysis tool uses a three column approach. 1.
n the rs rstt colum column, n, writ writee your your futu future re requ require iremen ments ts..
2.
n the second colum column, n, identif identifyy the current syst system em that that fulll fulllss the requi requiremen rement. t.
3.
dentifying the gaps is now a strai dentifying straightfor ghtforward ward proces process. s. Go down your list. Every time you nd a future future I requi requiremen rementt that is not met by by current systems systems,, make a note in the hird column.
Be honest! If there are requirements listed listed that are not met, 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 nd a large Remember, number of gaps in your current systems. systems. Conversely Conversely,, if you are not 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 likely to nd that there are some things that simply cannot be accomplished. Go down your list and rule these out early. 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.
P U O R G
Step 3 – Summarize and Resolve Gaps G aps
H
Objective: •
C
Create a summary document of gaps. g aps. What You Need To To Do Gather strategic gaps and implications. Accumulate all of the implications and gaps that you have identied thus far in this stage. Use “5.4 Recommendations to Resolve Strategic Gaps.” Resolve gaps. n a meeting with stakeholder(s), develop some recommendations as to how you might overcome the gaps identied in this stage. stage. Distribute the list of gaps ahead of time so that people have time to think on their own and table ideas at the the meeting.
R A E S E R H C
Get everyone involved and think creatively. creatively. Don’t discount any ideas yet, just try tr y to get g et 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. ideas.
E T ~
Is there a project here? Carefully examine the proposals for resolving gaps. These could spark specic strategic project plans.
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Stage Summary: Perform a Gap Analysis Your gap analysis should yield 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. The following chart shows the progress of developing the plan after Stage 5 of the engagement. P
Status U
Creation Of Steering Committee
Done
O
Scope Denition of “Strategic”
Done
R
Strategic IT Plan Kickoff Meeting
Done
G
Preliminary Report With Goals and Timeline
Done
Docu Do cume ment nt co corp rpor orat ate e Vis Visio ion, n, Mi Miss ssio ion n and and St Stra rate tegi gic c Goal Goals s
Done Do ne
Analyze Co Core Co Competencies an and Co Competitive Po Position
Done
Current IT Organizational Structure.
Done
Hardware and Software Inventory
Done
R A
Analysis of IT Trends
Done
Review of IT Against Governance Maturity Model
Done
E
IT SWOT Analysis
Done
S
List of Proposed Future IT Directions
Done
E
List of Requirements for Resolving Gaps (Roadmap)
Done
H C
R H C
Stage
Corporate IT Vision Statement
6
Corporate IT Governance Charter
6
Strategic IT Goals Achievable Measures Budget Analysis
E
Prioritized Project List
7
T
Completed Strategic IT Plan Document
8
Comprehensive Strategic Planning PowerPoint
8
Strategic Planning Communication Plan
8
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Stage 6> Propose a Strategic Vision and Governance Model
Stage
6
With a rm grasp of your company’s company’s business objectives – and having having brainstormed various ways that IT can enable them – now is a good time to establish an overall overall strategic vision for IT in your organization. n erpr se vs. epar men s on All of the work you have completed completed thus s sect on ocuse ocusess on an ente enterpr rpr se far should help you to arrive at a rm vision. It is not specically about establishing establishing understanding of the role that IT can play play an operatio operational nal vision vision for for your your I departm department, ent, within your company. company. Setting a clear direction oug t ere w e o v ous over ap. will help you later when you are evaluating evaluating and prioritizing the projects in the decision-making ncee t e nc epart ep artme ment nt s t e pr ma mary ry mo move verr framework.
Step 1 – Hold A Vision Meeting With Stakeholders Describe what needs to be done to achieve the future future I situa situation tion docume documented nted in Stage Stage 4. Your IT core values values represent the standard axioms by which which I is applied applied acros acrosss the organization. Similar to the core values 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
P U O R G H C
in advancin advancingg I strat strategy egy,, it stands stands to reason reason that that our departmental vision will be closely aligned nott syn no synon onym ymou ouss w t a cor corpo pora rate te v s on on.. However How ever,, it is important important that that your your corporate corporate I vision extend beyond beyond the I department.
R A
A good enterprise I strategy will align closely with your corporate strategy strategy and vision. It will a so e p oc ocus us t e en entt re co comp mpan anyy on sp spec ec c I goa goals ls.. An I st stra rate tegy gy and and gove governa rnanc ncee tructure that is exclusive to one department eaves eav es a space or ot er epartme epartments nts to c ar artt t e r own co cour urse sess – a pra racct ce t at could have disastrous results.
E
or mo more re se seee t e art c es on ne s on For All” and For and “Reigni “Reigning ng In Rogue Rogue I ” in the the background section for this stage.
T
Use the guidelines for the organization vision statement in Stage 2 when preparing the vision statem sta tement ent corp corpora orate te I .
E S
R H C E
~ O F N I
Step 3 – Propose a Governance Structure The strategic IT vision applies to all strategic level level IT decisions across the organization. The IT Steering Committee is a cross-functional committee committee for the on-going application of strategic priorities IT projects. Propose a charter for this group g roup that draws a line from vision and objectivestotoall specic actions.
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In This Stage Stage 6> Propose a Strategic Vision Vision and Governance Model Model ............. ...................... ......... 99 Step 1 – Hold a Vision Meeting With Stakeholders Stakeholders ............. .......................... .................. ..... 101 Step 2 – Establish a Strategic IT Vision .................... ................................. .......................... ............... .. 102 P U O R G
Step 3 – Propose a Governan Governance ce Structure......................... Structure...................................... ................... ...... 103 Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ .................... ....... 104 ackground ackgroun d > One Vision for All............... All............................ .......................... .......................... ........................ ............. 105 Reigning In Rogue IT............. IT.......................... .......................... .......................... ........................ ........................ ............... 106 Building Yo Your ur Steering Committee...... Committee................... .......................... ......................... ......................... .............109 109
H C R A
Workbook Stage 6> Propose a Strategic Vision Vision and Governance Model Model ............. .................... ....... 147 6.1 IT Vision Meeting Agenda...................... Agenda.................................. ......................... .......................... ................. .... 149
E S E R
6.2 Strategic Objectives List ............. .......................... .......................... .......................... ........................ .............. ... 150 6.3 IT Core Value Values.................... s................................. .......................... ......................... ....................... ....................... ............151 151 6.4 IT Vision Statement ........... ........................ .......................... .......................... .......................... ....................... .......... 152 6.5 Steering Committee Charter................. Charter.............................. .......................... .......................... ................. .... 154
H C E T
Agility Tips: Forget the Poetry
~ O F N I
he 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 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-specic points.
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Step 1 – Hold a Vision V ision Meeting With Stakeholders Objective:
Meet with your your strategic strategic planning planning group to devise a vision and mission mission for corporate corporate I . What You Need To To Do
P
Review your corporate vision and future IT situation. eet with your IT strategy committee. Use “6.1 IT Vision Meeting Agenda” to review the corporate cor porate strategy, as establishe estab lished d in Stage 2 as well well as the the list of I options devel developed oped in Stage Stage 4.
U
List strategic objectives for IT. As a committee, develop statements that capture how various IT options can improve the competitive competitive position of the organization and or the services it provides. Use worksheet “6.2 Strategic Objectives O bjectives List” to support this exercise.
O R G
List strategic core IT values for the t he company. Similar to the core values you documented docum ented for for your company company as a whole, whole, I core values values are are the set of of belie beliefs fs or philosophies that guide strategic IT decisions. decisions. Use worksheet “6.3 IT Core Values” Values” to
H
document your results.
R A
Meet with the I stakeholders in your strategic planning group. It is important to develop 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. his does not mean, however, however, that you or a sub-group within the I department can’t can’t do some “brainwriting” (see background to Stage Stag e 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 p rocess everybody has already given considerable thought to the corporate cor porate agenda and where IT resources might help advance that agenda. Participants should not feel like they are building b uilding from scratch. At the meeting, do the following: .
Begin by reviewin reviewing g the compa company ny vision vision and missi mission on statemen statements ts. It may be helpful to read the vision aloud. Make sure everybody is focused on that vision.
2. Invite Invite participants participants to reect reect on all all of the material material that you you have have gathered gathered to date and contemplate the ways that IT is going g oing 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 down your your list list into into ve ve to seven seven speci specicc objectiv objectives. es. The hardes hardestt part part of of creating your strategic objectives objectives will likely be the wording. wording. It can be difcult to create
strategic objectives that are broad enough to encompass the goals g oals you have set, yet specic enough to be meaningful.
C
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4. On a separat separatee white white board board or easel easel page, page, list list some some core valu values es of corporate IT 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 decision aking.
For your list of core values, consider your scope denition from Stage 1 as well as your commitment to alignment. Some examples of core values could include: P
1.
nformation technology nformation technology plays plays a critica criticall role role in achi achieving eving our strate strategic gic object objective ivess and in enabling critical processes across the organization. It should therefore be viewed as a critical enterprise resource.
2.
T projects projects inv involving olving an inves investment tment of $10,00 $10,0000 or more shoul should d be approv approved ed by by the IT governance body body..
U O R G
3. All IT projects projects in in this class class must must have have demonstrable demonstrable benet benet to advan advancing cing the corporate corporate ission.
H
4. We are committed committed to maintaini maintaining ng a unied standard standard for for enterprise enterprise architectu architecture re across across he organization.
C R A E
Step 2 – Establish a Strategic IT Vision
S
Objective:
E •
Draft an IT vision upon which you can base future strategic decisions.
R H
What You Need To To Do ü
Create an IT vision statement for your organization. Consolidate the various IT value statements state ments into into one vision statement. statement. Use Use the worksheet worksheet “6.4 I Visi Vision on Statement” Statement” to support this exercise.
C E T ~ O
Your IT vision vision statement should reect your vision of what IT might do for the organization in he future. •
F
Some of the statements will overlap. overlap. Others will state the same principle more than nce. Devise a single statement that covers off all the main points in your list.
N I
List some broad statements that reect the values values and goals of these lists. lists.
•
Work out a nal draft of the vision statement as a group. Make sure that everybody Work everybody agrees to the vision statement.
Your IT vision vision should describe what the future will look like in terms of functionality and perations (e.g. anyone can place an order from anywhere in the world, administrators can manage storage capacity globally, globally, and so on). A good vision is both inspiring and attainable. 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 o Do 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 or IT analysis and investment decisions at the strategic level.
P U O
A steering committee is absolutely critical critical to on-going strategic IT planning and decision making. You will will know how serious your organization is about strategic I when you see how serious it is about a steering committee.
R
As was stated earlier in this methodology, methodology, steering committees committees are not a replacement for the IT department. departme nt. Neither Neither are they, they, at the other extreme, extreme, a rubber stamp for I departm department ent plans. plans.
H
he 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 investments with projected costs over a determined monetary threshold. This includes proposals from within IT services as well as proposals from other departments de partments that have a signicant IT component.
G
C R A E S E
All proposals must be reviewed and approved approved for technological merit by the I department. All proposals must include clear denitions denitions of business measures and benchmarks of progress. These include cost/benet cost/benet analysis and clear calculation of Return on Investment (ROI).
R H C E
•
The steering committee has the authority to reject any proposal which it deems not to have made a sufcient business case or which does not signicantly contribute to the strate str ategic gic goal goalss of of XY Com Compan panyy.
In following this strategic IT planning process, you have recognized that strategic IT is bigger big ger and broader than any one o ne department. It therefore stands to reason that strategic decisions should be made in a forum for um which is broadly representative, focused on aligning IT with corporate objectives, and answerable directly to the senior executive. executive.
Agi ity Tip: Forma ize t e In orma n this stage you are basically b asically proposing that the planning process pro cess used hus far be made permanent. If you are a small organization, and your lanning committee is an informal informal group of three or four people, you should still get written commitment from the chief executiv executivee that this group shall continu continuee to oversee oversee strategy-lev strategy-level el I decis decisions ions..
T ~ O F N I
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Stage Summary: Propose a Strategic Vision and Governance Model
P
You now should should know where you are, where want to be, and how you can go about getting there. n this stage you are formally stating your vision for strategic IT development as well well as a set of ormal rules for I decis decision ion making. making. You should should have have these nailed nailed down before you you proceed to he next stage: Build a Strategic Decision Making Framework. The following chart shows the progress of developing the plan after Stage 6 of the engagement.
U
tatus
O
reat on
R
cope
G H C
teer ng te
e n t on o
trateg c
an
re m nary
eport
ore or
urrent
ar wa ware an na ys s o
E
ev ew ew o
S
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tructure.
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overnance
atur ty ty
o e
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uture
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one
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E
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arter
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ann ng om ommu mun n ca catt on
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Background Backgr ound > One Vision Vision for All he strategi strategicc I visio vision n that is deriv derived ed from from this this stage stage in the the methodology methodology should should encomp encompass ass I as it is applied across the entire enterprise. The IT department obviously has the greatest g reatest stake in this vision; however, it is equally important for all your departments. dep artments. Helping the organization achieve its strategic goals and making the organization as a whole more competitive or effective, effective, is the key goal of strategic IT planning. According to Info-Tech Researc Res earch h Group, the use of “stra “strategic tegic I plannin planningg can improve organizationa organizationall competitive competitiveness ness and therefore should be seen as a priority for the entire organization and not just the IT department .” .” (Use of of Strat Strategic egic I Planni Planning ng In Medium-S Medium-Sized ized Enterpri Enterprises) ses)..
P U O R G H C R A E S E R
Sixty-ve percen Sixty-ve percentt of organizations organizations utiliz utilizing ing strate strategic gic I planni planning ng (or SI P) indica indicated ted that having the plan resulted in at least somewhat increased competitiveness competitiveness of their organization. (In the case of non-prot 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 benet, with nearly 80% reporting repor ting 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 signicantly increased organizational o rganizational competitiveness.
H C E T ~ O
However,, a corporat However corporate-wide e-wide I strat strategy egy and governanc governancee structure structure does not mean mean that that the the I department’s role is somehow diminished or marginalized. The IT department should be the lead unit in developing developing a corporate I strategy and is the key developer developer and enabler for strategic level IT projects. Info-Tech Research Research Group has found that organizations org anizations that utilize SITP are more likely to view the I departm department ent as a strategic strategic weapo weapon, n, while while organizatio organizations ns not utili utilizing zing SI SI P are more liabl liablee to view their IT departments depar tments as playing a support role. This is consistent across all industry segm se gmen en s.
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P U O R G H C R A E S
Reigning In proje Rogue ITand funded “Roguee I ” projects “Rogu projects – projects cts launched launched and funded by departments departments outsid outsidee of the scope scope of he IT department – can become a costly long-term long-ter m headache for the company. How do you eal with these shadow or ghost projects? See them as symptomatic of the need for a sound and inclusive IT governance structure.
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Rogue IT Scenario
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ere is the situation: A department feels that a new system will help them achieve business goals cheaply and more efciently. efciently. They also feel that central IT cannot, or will not, support suppo rt a project o develop the system. So they go ahead and do it themselves using their own IT experts exper ts or by utsourcing the project. What is the problem with doing that? It shows initiative initiative and a willingness to move quickly quickly to embrace an innovative solution. Why should you care? Here are three good reasons: •
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The Solution Might Not Scale. Overall organizational IT goals are probably outside f the scope of the narrow rogue project. It might solve 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 e-tooled or replaced – an additional additional cost of the project. Bad Data/Inconsistent Format Costs. Data formats may end up being inconsistent ith other enterprise IT projects and data quality that is “good enough” for the rogue project may not be good g ood enough for other o ther applications. For For example, the marketing epartment may have customer data from its own project that could benet 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 Rogue I repr represe esents nts I spe spendi nding ng bey beyond ond you yourr contr control. ol. However,, as CIO, However 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 Research predicts that 5 to 15% of corporate technology spending is due to non-IT sponsor sponsored ed by projec projects ts.. Add to that the spending spendin g by I replacement departments departm entssystems xing problems prob lems that nonmight might be created rogue IT (such as paying for eventual or for xing standardized data.)
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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 sign of chronic communications communications problems between IT and business units.”
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In other words, you can’t can’t just complain about rogue IT projects and petition higher-ups to make them stop. You must take responsibility and exercise leadership. leadership. All IT spending, by the IT department or otherwise, needs to be more closely and accountably linked to corporate strategic
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and spending goals.
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Lack of an effective IT governance structure and communication between IT and other departments leads to conditions that breed rogue rog ue IT projects. These include:
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he “Dr. No” Syndrome. When I inv investme estment nt decisions decisions are are made in a vacuum vacuum,, and the justications not communicated, other departments don’t know what IT is up to or hy certain projects are more important impor tant than others. All they know is that their project is “not a priority”. Many an IT manager has been nicknamed Dr. No. No. •
“Just Do It Anyway” Syndrome. Senior management pressures departments to be more efcient, efcient, while also also pressuring pressuring I to spend less, less, and there is no accountabilit accountabilityy for the disconnect. Line managers are confronted with the message, “There is no money for this, but do it anyway anyway.” Of course, if they do go ahead, they get criticized down the road for adopting non-standard IT solutions.
Treat rogue IT projects, 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: f ollowing: .
Establis Estab lish h an IT Ste Steeri ering ng Com Commit mittee tee. IT spending decisions have enterprise-wide impact.. It simply impact simply is not fair to force the the CIO or I manager to make make these decisi decisions ons alone. The steering committee should involve key department representatives as well as senior administrators administrators..
2. Requir Requiree Committe Committeee Approv Approval al for All All Major Major IT Projects 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/benet, strategic alignment, and how h ow it might
positively or negatively impact customer relations. 3. Man Manage age Expe Expectat ctation ionss Both Both Up and and Down Down the the Line Line. It is one thing to involve
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epartments in decision epartments decision making making and get their support support for I decis decisions ions.. It is also important to manage the expectations of senior management. Leadership sometimes eans saying no to the boss (with the ability to justify that position). ogue I projec projects ts happen when departments departments and project project leaders leaders feel they must must move move forward ith a project even though they don’t don’t have the support of central IT. IT. This is a symptom of poor communication between between I and other departments, 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. P
As was stated earlier in this methodology, methodology, an IT steering or governance committee is not:
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A replacement for the IT manager or management team of the IT department. The T manager manages his or her department. The Th e steering committee helps set priorities or IT investment and evaluates how well the entire organization is is progressing in meeting strategic goals. A “rubber stamp” for the IT department . The committee must be able to gauge he busines businesss impact impact of vari various ous propose proposed d I projec projects ts.. hey are not there there simpl simplyy 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.
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Steering Committees Work
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A 2000 study of “The Effects of MIS Steering Committees on Information Technology Technology Sophisticat Sophis tication” ion” (Journal (Journal of Managem Management ent Information Information Systems, Systems, Vol. Vol. 17 No. 2) surveyed surveyed 270 I managers in the Financial Services Ser vices industry. industry. The study found that steering committees do indeed improve impro ve the effectiv effectiveness eness of I managem management ent across across the organizations organizations surveyed surveyed.. Management Sophistication was dened as “management maturity” or effectiveness effectiveness of the management function. Greater sophistication implies that managers are “aware of the rm’s
long-term strategic plans, the rm’ r m’ss future strategic plans are explicitly included in IS planning, and IS perfor mance is evaluated based on contribution to the rm’s overall objectives. objectives.
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The study results indicated that “presence of IT steering committees indeed helps enhance the level of IT management sophistication within rms”. It also noted that the roles that steering committees play also impacts on “sophistication” and that rms r ms should carefully dene that role in the interest of getting g etting the most benet from steering committees committees.. he three roles roles are: 1.
teering Gr Groups, which guide and approve IT strategy, give business direction to IT activities,, and prioritize IT activities activities activities..
2. Poli Policy cy Com Commi mitt ttee ees, s, hich are involved in strategy implementation and creating policies and procedures associated with IT planning. 3. I Boards, which formulate I department strategy, control and manage I units, and “ensure IT is run as a business.”
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he study also also notes that the the three are ideal ideal groups and in reality reality,, I 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 Committee Steering 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. g roups. For example, there may be a networking working group or o r a Web working group. Here are some tips for establishing your rst steering committee. .
Startt with Star with a sma small ll cor coree grou group p. At the very least your your steering committee should should include a representative from Finance and Human Resources as well as representatives re presentatives from key business driving departments and yourself as head of IT IT.. Additional ad hoc experts can be brought b rought in on a project-by-project basis.
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2. Estab Establis lish h a monet monetary ary thresh threshold old for for projec projects ts. The steering committee shouldn’t shouldn’t be bogged bogg ed down with small projects (even though some small projects will yield big returns.
Set a cost gure above which projects must be reviewed and approved by the steering committee. 3. Estab Establis lish h pro projec jectt ben benchm chmark arks. s. Each project should be brought to the committee as a business case, rather than a technology technolog y case. Project plans should also have clear benchmarks by which the committee monitors progress.
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. Prioritize Prioritize projects projects based on Strategic Strategic Alignmen Alignmentt and Return Return on Investm Investment ent. In addition addit ion to reviewing reviewing and recommending recommending projects projects for I inv investme estment, nt, the committee 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 benets:
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 p roject over another.
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Your steering steering committee should have a regular set set of meetings, perhaps once a quarter or twice a year. Make Make sure that project proposals are lined up ahead of time and that the business benets are clearly stated. The committee should also approve a detailed project charter for each investment.
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Stage 7> Build a Strategic Decision Making Framework When you are faced with a decision, the best thing is to do the right thing, thing , the next best is to do the wrong thing and the worst thing to do is nothing.
Stage
7
Roger Enrico, CEO of PepsiCo
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You have have identied the gap between where you are and where you want to be. be. You have have also established a governance structure that identies a strategic vision and incorporates a steering committee. Now it is time to make some concrete recommendations and determine a course of action.
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Translating Translati ng your strategy into some tactical and operational goals is the objective of this stage.
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W We e have divided itit upyou intowill fourhave steps. Each steplist builds on the previous. By the time completed this stage, a prioritized of projects for the upcoming year.you have
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These are the steps in this section:
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Step 1 – Set Strategic Goals and Measures Begin the process of turning your strategy into action by setting some some clear goals for corporate I . his takes takes the work work you you did did in in the previo previous us stage stage – Propos Proposee a Strateg Strategic ic Vision Vision and Governance Model – and turns it into some actionable objectives for the upcoming year.
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Step 2 – Per orm a Bu get An Ana a ysis Goal setting and measurement 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 year’s budget, budgeting next year’s information becomes b ecomes 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 fullled by a specic IT project.
Step 4 – Prioritize Your Projects Use a three-tier approach to prioritizing your projects. 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:
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nfo-Tech Project Matrix nfo- ech Pri Priori ority ty Ind Index ex
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nfo-Tech ROI Calculator
This is the last step in creating your Strategic IT Plan. Once you have nished this section section you ill have have a plan that establis establishes hes the direction direction for the the I departm department ent for the upcoming upcoming year and and clearly explains how you will achieve your objectives objectives..
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Stage 7: Build a Strategic Decision Making Making Framework ........... ........................ .................. ..... 11 111 1 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............. Projects .......................... .......................... .......................... ....................... ..........120 120 Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ .................... ....... 124 ackground ackgroun d > Types of Goals IT Should Set ............ ......................... ......................... ..................... ......... 125
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Financial ........... ........................ .......................... .......................... .......................... .......................... .......................... .................... ....... 125
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Organizational Organizatio nal Goals Goals........... ........................ .......................... .......................... .......................... .......................... ............... 126
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Technolo echnology gy Operatio Operations................... ns................................ .......................... .......................... ........................ ................ ..... 128
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Customer Service Goals........ Goals..................... .......................... .......................... .......................... ........................ ............. 129 IT Governan Governance ce Goals ............ ......................... .......................... .......................... ......................... ........................ .............. 130 Getting Buy-In for Your Goals........... Goals........................ .......................... .......................... ......................... .............. .. 131 Using Your Budget as a Manageme Management nt Tool Tool ............. .......................... .......................... ................. .... 132 Dealing with Budget Cuts ............. .......................... ......................... ......................... ......................... ................... ....... 133
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Workbook Stage 7: Build a Strategic Decision Making Making Framework ........... ........................ .................. ..... 156 7.1 IT Strategic Goals................. Goals.............................. .......................... .......................... ........................ .................... ......... 158 7.2 Balancing IT Measures............. Measures.......................... .......................... .......................... ........................ ................ ..... 161 7.3 Budget Analysis Workshee Worksheets ts ............ ......................... .......................... .......................... ..................... ........ 165 P
7.4 Budget Summary................ Summary............................. .......................... ......................... ....................... ....................... ............ 171 7.5 Analysis of Available Options ................................. .............................................. ......................... ............172 172 7.6 Business Case Template..................... emplate................................. ......................... .......................... ................... ...... 173 7.7 Comprehe Comprehensive nsive Project List ............. .......................... .......................... .......................... ..................... ........ 174 7.8 Info-Tech Info-Tech Project Ranking Framework ............ ......................... .......................... ................... ...... 176 7.9 Prioritized List of Projects Projects............. .......................... .......................... .......................... ........................ ............. 184
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Agi ity Tip: Consensus On Proce ure his Stage is the foundation of all future strategic planning and decisionaking. How you do it (make decisions) is important. But more important is consensus on how it will be done from now on.
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n this Stage you are agreeing on a common language for expressing the strategic value of IT projects. Worry Worry about ab out getting that consensus more han on the details of the framework – these will continue to develop develop over ime.
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Step 1 – Set Strategic Strate gic Goals and Measures Objectives:
stablish strategic goals for IT IT,, based on your new vision and objectives objectives.. stablish measures for ensuring that goals are achievable. What You Need To To Do
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Start turning your strategy into action by setting some clear strategic goals for enterprise IT IT.. Take the work work you did in the previous stage – Propose a Strategic IT Vision and Governance Model – and brainstorm some actionable objectives for the upcoming year. year. Use SMART SMART (Specic, Measurable, Attainable, Attainable, Relevant, Relevant, and Timely) criteria crite ria to help clarify clarify your goals. goals. List your goals in the workshee worksheett “7.1 I Strat Strategic egic Goals”.
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Establish clear measures for each goal. Take a balanced scorecard approach to creating creat ing sets of meas measures ures for your your strategic strategic I goals goals.. Use the example example scorecard scorecard “7.2 Balancing IT Measures” as the basis for your own scorecard.
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Setting goals is critic Setting critical al for the on-going on-going success success of any I departme department. nt. Howe However ver,, according according to ne TechRepublic TechRepublic Survey, 58 percent of IT managers either didn’t set goals or didn’t measure heir performance towards goals. To be a successful IT manager, you must must set goals, measure your performance towards these goals, go als, and translate the goals into documents like budgets and ob descriptions.
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The SMART technique for goal setting is fairly well known. While not all goals 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. pecic: The goal must be clear, understandable, and state the expected result. result. Give each goal a clear start and end point, and and limit your number 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. earlier. Be sure to include goal review and revision in your milestones. A tainable: The goal g oal should move you beyond your comfort zone into new growth areas, but
still be realistic and within your departmental or organizational org anizational capabilities. Relevant: he goal must must be clearly derived derived from, and harmonized with, organizational strategic goals. Prioritize your goals against organizational objectives objectives before creating plans for accomplishing them. Plan execution of your highest ranked goal rst – this way, way, you can ensure that sufcient resources are allocated to your most important target. targ et. Timely: The goal must be tied to deadlines and put into a timetable in order to prevent delay of activity.. Remember that many I projects can run well over activity over a year in length, which effectively overshoots most goal-setting timelines. timelines. Make sure senior management is committed to supporting supporti ng stated stated I goals beyond beyond the the current current year. year.
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The Balanced Scorecard The Balanced Scorecard (BSC) combines traditional nancial measures with supplemental measures such as gauging innovation and customer satisfaction. Objectives and measures are set from four perspectives: .
Financ Fina ncia iall Pe Persp rspec ecti tive ve:: Traditi Traditional onal nancial measures such as protability protability,, revenue, and sales growth.
2. Cust Custom omer er Pe Persp rspec ecti tive ve:: Customer retention, customer satisfaction, and market research. 3. Internal Internal Busin Business ess Proce Processe ssess Perspe Perspecti ctive ve:: Processes instituted to meet or exceed customer expectations. . Learnin Learning g and and Innov Innovati ation on Persp Perspect ectiv ive: e: How the organization and its people grow and change to meet new challenges.
Beware of Goal-Setting Pitfalls now ng ow to set goa s s on y the rst step. he goal-setting process itself contains a few traps of its own. Here aree so ar some me co comm mmo on p t a s to avo .
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Do not set goals for others. Much o t e wor on onee n s n su supp ppo ort of other departments. Know their business. business. Only set goals after ou ave scus ussse pr or t es an mp cat on o ns w t t ose t at t ey affect, including your staff.
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m ng or pe perr ec ectt go goa a s ca can n para yze you. Not all goals can be made specic, measurable, and timebound. Set your sights on being being reasonable, not perfect.
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Remember that you can always ma e c anges. n act act,, c an angg ng ng,, deleting, and adding elements to your goals is often the responsible thing to do. Relax.
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vo r g ty ty.. ve verr y st strr ct adherence to goals can inhibit
adaptability and learning. Stay away rom goa att attaa nme nment nt at t e expe expense nse of exibility and growth.
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he balanced balanced scorecard scorecard and sample measure measuress provided provided in “7.2 Balancing Balancing I Measu Measures” res” are erived from Measuring Performance Performance and Demonstrating Demonstrating Results Results of Information Technology Technology , an Executive Guide of the Accounting and Information Management Division of the US General Accounting Ofce. You can download the complete guide from: http://www.gao.gov/special.pubs/ai98089.pdf
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BSC BS C an St Stra rate tegi gicc P an anni ning ng.. 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 afrmative useless o the following questions.
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Is th there ere a str strat ateg egic ic vi visi sion on?? A scorecard doesn’t doesn’t provide you with a vision. If there is no vision, there is no way to apply measures. measures.
. Does Does the scor scoreca ecard rd have have exe execut cutiv ivee buy-in buy-in?? Without buy-in on strategy strateg y and objectives you can’tt set measures that will have an impact. can’ 3. Do your initiat your initiative ivess and measurement measu rements s tie into your your strategy? strategy? initiatives and measurements don’t link to strateg strategy y, you’ve expended resources on Ifactivities that won’tt won’ contribute to the success of the organization as a whole.
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Your vision vision has been created through an inclusive process, process, which has strong executive executive buyin, and business/IT alignment is a strong focus of your planning .If you have followed followed this methodology so far, answering yes to the above should be a no-brainer.
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Step 2 – Perform a Budget Analysis
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Objective:
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Analyze the budget implications of meeting strategic objectives. objectives.
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What You Need o Do
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Perform a high level analysis of the IT budget. Use “7.3 Budget Analysis Worksheets” W orksheets” to review your current and projected budget. Summarize your budget. Use “7.4 Budget Summary” to summarize key points of your budget that are germane to the strategic strategic planning process. his information will will go into your Strategic Plan document.
Goal setting and measurement 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
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Showing that you Showing you have a realis realistic tic grasp of the mechanics mechanics of of the I budget will will help you you sell your your ideas for IT investment.
Step 3 – Identify Your Options Objective:
Identify strategic options and create business cases for each.
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Recommend a set of projects for the coming year. What You Need To To Do
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Identify your options. Begin identifying your options by taking a very high level approach. Using your gap analysis from Stage Stage 5, group together functions that you think can be fullled by a specic IT project or investment. investment. For example, you you may be able to group together a number of functions that relate to customer customer contact. These are likely likely to be fullled by investing in a contact management application.
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Analyze the options. Once you have listed a number number of options for each possible solution, take your understanding understanding a step deeper by analyzing each of the options. Use “7.5 Analysis of Av Available ailable Options” to review all available options. options.
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Create a set of business cases. Use the “7.6 Business Case Template” to create a business case for each project. Include nancial information as part of your recommendations. This cannot be emphasized enough since itit is the one thing that seniorr management senio management looks to rst, rst, and the one thing thing that I tends to overl overlook. ook. Make recommendations. Meet with your planning group g roup and review the business cases. Draft specic recommendations for inclusion in your group’ g roup’ss Strategic Plan document. If you have been diligent in your option identication identication and analysis work, your nal recommendations should be clear, logical, and t with your company’s overall business s ra egy gy..
As applications evolve, evolve, many of the lines of distinction between types of applications or hardware solutions and their associated functionality functionality are being blurred. Nonetheless, as the IT manager, you will likely have have a reasonably good sense of the types of high-level systems that you you will need. List all of the high-level systems that you will be evaluating. evaluating.
S E R H C E T ~ O F
Once you have done this, this, begin to identify at least three options for each. Do some research and determine options and their respective vendors. 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 nal decision, you will probably have to send out some Requests Requests for Information (RFIs) or Requests for Proposal (RFPs). Don’t exclude any option at this stage for nancial or other reasons.
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Ana yzing t e Options Once you have listed a number of options for each high-level system, take your understanding a step eeper by analyzing each of the options on the ollowing dimensions: Costs (hardware, software, outside services, ser vices, raining, support)
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User resources required
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Benets to your company easons you might not want to go with this ption (deterrents and risks)
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Time required to maintain T resources required
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Time required to implement (i.e. (i.e. duration of he project)
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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 you through all of the issues you need to consider and the potential pitfalls you need to avoid.
his 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.
Compatibility with existing systems
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Digging Deeper: Vendor and an d Software Selection Methodology
For more, go to www.infotech.com. www.infotech.com.
Create a Set of Business Cases
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Use the information you just gathered to prepare a business case for making the suggested changes. Management thinks in terms of costs, benets and return on investment (ROI) (ROI) – make make sure that your business case takes this into account.
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For example, stating that: “We have to add extra RAM to 10 “We desktops because PCs they are slow at running the new version of the customer service application”
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is not as likely to get a positive response as saying that: “By adding extra extra RAM to 10 desktops desktops PCs, PCs, at a cost of 2,000, we estimate estimate that the help desk can handle 20 more customer service requests r equests per hour, which which will save an estimated $20,000 per year in labor and phone costs.”
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Prepare a business case for each solution. In your business case, include the following following information: •
General description of the high-level system Identied options
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Benets Costs Risks
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Recommendation
Remember, these are going to be read by senior management. A good business case is no more than Remember, than two to three pages in length. Keep them clear and concise. You don’t need to include include every detail your research uncovered. uncovered. Add value through your insight and analysis. analysis.
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If management has asked you to include all of your background research, you should still prepare an executive summary of your ndings and include it at the beginning. beginning.
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Ma e a Recommen ation Preparing a complete set of business cases gives you you an objective way of analyzing the various solutions available. available. Once you have prepared a business case for each solution, the nal step step is to make some recommendations.
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Make sure that your recommendations are clear and justiable in language that a non-technical person can understand. Any questions or concerns will be directed towards your your decisions, not your background research. Remember, the objective here is not just to make recommendations – you have to sell your Remember, recommendations to senior management. This is where the work work you did on documenting documenting and understanding your company’s company’s business strategy will pay off by ensuring that your suggestions t with the overall goals of the company. 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 To Do P
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List all projects that are currently in progress. Refer to the work work you did in Stage Stage 3 documenting your current IT projects. Use “7.7 Comprehensive Project List” for this purpose.
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Use the “Info- ech Priority Priority Index” Index” to ensure that your projects projects are aligned aligned with the objectives of the business.
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Use the “Info-Tech ROI Calculator” to create comprehensive return on investment criteria for each project.
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Use “7.8 Info-Tech Project Ranking Framework” o analyz analyzee and and sort sort your your projec projects ts into priority order.
Use the “Info- ech Project Project Matrix” Matrix” to sort projects into four distinc distinctt groups: Pursue Pursue Agg ressively,, Scale Down, Pursue Cautiously, Aggressively Cautiously, and Terminate Immediately Immediately.
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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. he Project Project Ranking Framework will take care of sorting out less attractive projects.
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Use “7.9 Prioritized Prioritized List of Projects” to list your top ten projects p rojects in priority order as established by Info-Tech’ Info-Tech’ss Project Ranking Framework. This prioritized list is one of the central components of the Strategic IT Plan that you will submit to management.
C E T ~ O
1. Info-T Info- Tech Project Matrix M atrix The rst step in sorting your initiatives is fairly straightforward. straightforward. Use the project matrix elow to sort your projects into four separate groups. Projects should then be carried orward in their groupings and prioritized using the Info-Tech Priority Index.
F N I
his framework shows the four generic strategies strategies for I projects: Pursue Aggressively Aggressively,, Scale Down, Pursue Cautiously Cautiously,, and Terminate Immediately:
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l a i t High n e t #3 o P ursue e Cautiousl d i s ) p P U U d E ( n #4 a c Terminate i m Immediately o n o o c E Low
#1 Pursue Aggressively P U
#2 ca e Down
O R G
High
Contribution to Core Business (CCB)
H C R
For a more detailed denition denition of each quadrant of the project matrix see “7.8 Info-Tech Info-Tech Project Ranking Framework” Framework” in the workbook. Once you have sorted your projects into the four groups, take your prioritization a step further fur ther using the Info-Tech Priority Index.
A E S E
2. Info-Tech Info-Tech Priority Index
R
Use the Info-Tech Info-Tech Priority Index to 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. p rojects. Info Tech Tec h has assigned a suggested point rating to each factor, but these can be adjusted to reect your company’s objectives.
H C E
Info-Tech Info-T ech Priority Index a
ty
T
Customer Value Proposition – CVP – (0 -15) conom c n ps e otent a – – ndustry Attractiveness Attractiveness – IA – (0-15)
~ O F
“Fit”
Fit With Company Goals/Capabilities – CGC – (0-15) Ease Of Implementation – EI – (0-15)
Risk
oss ty o ss ng ng c e u e – Risk of Cost Overrun – RCO – (0-5) Technical Risk – TR – (0-5)
Total:
otal out of 100
–
-
N I
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For a detailed denition denition of each of the factors listed above, above, see the Priority Index in “7.8 Info-Tech Info-Tec h Project Ranking Framework.” Framework.” Assigning each project a rating out of 100 on the Info-Tech Info-Tec h Priority Index is the rst step in creating a prioritized prioritized list of projects. Rate each individual category separately separately.. To T o Complete Info-Tech’ Info-Tech’ss Priority Index: •
P U
•
O R G
•
•
H
•
C R
chedule a meeting and include all of the key stakeholders, stakeholders, including senior manag ma nagem emen en . 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 emplate. Briey explain each project and wait until everybody has nished assigning the project a numeric ranking. ranking. By completing rankings together as a group, 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 o you.
A E S
List all of the possible projects down the left-hand column of the Info-Tech Priority Index emplate.
•
E
Depending on the number 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.
R
Once you have tabulated the scores, sort them in order of priority priority,, with the highest scoring project listed rst.
H C E T ~ O F N I
•
Distribute the prioritized list to all meeting attendees.
Completing the Info- ech Priority Index has moved your highest priority projects to the top of the list. Before you nalize your your list, take your your analysis a step further by applying applying the Info- ech ROI (Return (Return on Investment Investment)) Calculator Calculator to your top ten projects projects..
. Info-T Info- Tech ROI Calculator The Info-Tech ROI ROI Calculator will provide you with one last step step of prioritization. It will also force stakeholders to think through the project and identify potential risks. Info-Tech’ss ROI Calculator is an Excel spreadsheet and can be found the accompanying Info-Tech’ CD-ROM with additional explanation found under Info-Tech ROI Calculator in “7.8 Info Tech Tec h Project Ranking Framework.” Framework.” Use the spreadsheet to determine the ROI for each of your top projects. p rojects. Input all of the necessary data for each of your top ten projects. projects. Once you have inputted all of the costs and benets of each project, re-sort the projects based on the expected ROI ROI of
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each project. Your project with the highest return on investment should be the highest priority. Your priority. Consider eliminating projects that do not meet the “2:1” Rule Rule of Thumb . If the benets benets of your proposed solution are not at least double the expected costs, then the project is not worth oing.
Agility Tip: Show Your Your Work The tools in the Info-Tech Project Ranking Framework Framework will help provide you and your stakeholders a common language and touchstone for rioritization. f you don’t don’t have time to work work through the framework in a workgroup setting, as suggested above, make sure to at least distribute the framework o senior decision makers. Make sure they understand and approve of the ethods being employed and be prepared to show your work in justifying rioritization decisions.
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Stage Summary: Build a Strategic Decision Making Framework his stage is critical because, in addition to analyzing and recommending specic projects for fo r the coming year, you and your governance group g roup are establishing practices for how strategic level IT
P
projects will be measured and evaluated from now on. he following chart shows the progress of developing the plan after Stage Stage 7 of the engagement.
U
Status
O
Creation Of Steering Committee
Done
R
Scope Denition of “Strategic”
Done
Strategic IT Plan Kickoff Meeting
Done
Preliminary Report With Goals and Timeline
Done
Docu Do cume ment nt co corp rpor orat ate e Vis Visio ion, n, Mi Miss ssio ion n and and St Stra rate tegi gic c Goal Goals s
Done Do ne
Analyze Co Core Co Competencies an and Co Competitive Po Position
Done
Current IT Organizational Structure.
Done
R
Hardware and Software Inventory
Done
A
Analysis of IT Trends
Done
E
Review of IT Against Governance Maturity Model
Done
S
IT SWOT Analysis
Done
List of Proposed Future IT Directions
Done
List of Requirements for Resolving Gaps (Roadmap)
Done
Corporate IT Vision Statement
Done
Corporate IT Governance Charter
Done
H
Strategic IT Goals
Done
C
Achievable Measures
Done
E
Budget Analysis
Done
T
Prioritized Project List
Done
G H C
E R
~ O F N I
Stage
Completed Strategic IT Plan Document
8
Comprehensive Strategic Planning PowerPoint
8
Strategic Planning Communication Plan
8
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Background > Types of Goals IT Should Set Here are the ve major types of goals you should consider setting. setting. Each has different sub-types, sub-types, metrics, and management issues. Below we will discuss appropriate measures for each category. •
Financial
•
Organizational •
Customer Service I Go Governance
P U O
Technology Tec hnology Operations
R
A igning IT an Business Goa s
Financial Enterprising IT managers will create and beat their own internal nancial goals. g oals. Here are aof few examples of the different sub-types nancial measures:
Bu geting here are two two kinds of budgeting b udgeting 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%,
I goals and and business business goals goals must be contin continuously uously aligned and realigned. his point should be abundantly clear to you by now, based on the work ou ave co com mp et etee . e ow s a qu c re ter erat at on of some of your the key points yougoals points should re member to ensure that department’s t remember squarely with t e overa rect on o t e company.
H C R A E
1.
Make sure Make sure the bus busine iness ss goal goalss are are clea clear. r. ran anss err ng g - ev evee go goa s own to ope pera ratt on onaa goals can be a lot like playing the children’s children’s game of whispering a message to the the person tt ng ne next xt to yo you u n a c rc e t e me mess ssage age get getss distorted). Get the latest information about about business goals from business managers managers and ask if ou on t un erstan somet ng.
S E R H C
2.
or reducing the total expense budget to 1,000,000.
Commu Co mmuni nica cate te bu busi sine ness ss go goals als to al alll I st staff aff..
ter us ne ter ness ss go goaa s av avee ee een n na ze or changed, you need to communicate them to your staff. Asking questions about the business business goaa s s a go go goo o way to te test st t e n orm rmat at on has been communica communicated ted effectively. Remember hat business goals don’ don’tt usually translate directly nto goa s, ut sta s ou eep t s information in mind when doing their jobs.
Purchasing Purchasing involves selecting vendors and products that meet corporate requirements.. Many vendors also require requirements long-term management and strategies (e.g. Microsoft). IT managers can can set a large variety of purchasing-related goals, such as reducing the number of PC suppliers
G
E T ~ O F N I
3.
ar n t e tr ust o sen or non-tec n ca anage an ageme men n . his isn’t easy, but is critica criticall for he success of projects that span multiple multiple years e.g .g.. ee-co comm mmer erce ce an g -p -pro ro e pr pro o ec ects ts e.g e.g. management reporting). rust can’ can’tt be won
immediately, but must be built up over a period o t me me.. s me mett o o og ogyy s an mp mpor orttan antt st step ep
in that process.
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rom ve to 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) P U O
otal cost cost of owne ownership rship ( CO) is a measuremen measurementt of all the costs costs of purc purchasin hasingg and using a technolo technology. gy. hese costs include both direct (e.g. the purchase price) and indirect (e.g. other system resources that will be used). CO is a major issue for I managers, especially in the current current environment of cost cutt cu tt ng an u ge gett co cont ntro ro . ou ca can n se sett goaa s su go succ as as re uc ng you ne netw twor or to perr us pe user er,, or reducing overall CO by 10%.
R G H C
Organizational Goals n addition addition to nancial goals, goals, companies companies can set organizational organizational goals for their their I departm department. ent. Organizational goals relate to the people working in the IT department and how they work. ere are some examples of organizational goals:
R A E S E R H C E T ~ O F N
Stafng When more than a few people are in an IT department, its manager must create an rganizational structure with specic roles and responsibilities. As companies grow, grow, you can see where new staff will be needed in the future and plan for the changes necessary in the rganizational structure. For example, example, your company may may be integrating systems with dozens f new customers, which is increasing the demands demands for customer system system support. You can set a stafng goal of having three full-time people to handle all your customers’ customers’ system issues at the end of December. You can also set a goal of creating a new department department for customer system system support at the same time. Another stafng goal you can set is related to productivity. productivity. If some of your current staff is under-worked, you you can assign more work to increase productivity. productivity. If you measure their output (e.g.. lines of code, number of hours worked) before this change, (e.g. (e.g (e.g. 100 lines of code per eek, 30 hours worked per week), you can set a productivity improvement goal (e.g. 200 lines f code per week, 40 hours worked worked per week). Similarly Similarly,, if you have staff staff not working as hard as you think they should, you can measure their output and set productivity improvement goals. emember to agree on the consequences of not no t meeting the goals with your your staff before starting o measure performance.
I
Training Because technology technology changes so quickly quickly,, skills skills become obsolete very very rapidly. rapidly. Keeping I staff current with the latest technologies is a necessary investment to keep keep your technology unctioning optimally. optimally. However However,, training also costs money, and nancial budgets need to be set.
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You can set training training goals of having all your Windows N 4.0 certied staff upgrade their certication to Windows XP certication 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, employees, smaller companies often don’t don’t have these requirements. requirements. You can set management and review goals for doing performance reviews for all your employees by the end of the current quarter. quarter. In addition, you can set management goals for coaching employees with poor reviews. reviews. An example of this type of goal would be to improve a specic employee’s evaluation from “Poor” to “Good” by the next review through coaching.
Technical Skills Inventory In ventory In larger organizations, the IT manager often doesn’t know every every member of the department personally or what their skills are. hese companies companies make make inventories of their employees’ 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.
P U O R G H C R A E S E
App ication Deve opment Pro uctivity Programming output is a very ver y difcult activity to measure, but managing this is critical to the success of your IT organization and the overall overall company. company. You can set an application development productivity productivity goal of 1000 lines of code per quarter per employee, employee, or no more than 10% of the initial programming time spent on debugging debugging afterwards.
R H C E
E ciency an E ectiveness Efciency and effectiveness are related concepts that are critically important to any activity. Efciency measures whether you are doing things right, and effectiveness measures whether you are doing the right things.
T ~ O F N
Efciency in the IT department depar tment can be measured by taking outputs (e.g. business value created) and comparing them to inputs (e.g. (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 sur veying users to determine how satised they are with with the IT department’s 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 measure performance towards that goal by surveying users.
I
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Technology Operations On-going operations may appear routine and boring to users and support staff, but measuring heir performance is critical to managing the trade-off between costs and user satisfaction. There are several sub-types of technology operations goals go als you can set:
He p De Dess P U O R G
Most IT professionals and users are familiar with help desk operations. operations. However However,, many IT epartments do not measure help desk performance on attributes like average response time, percent of issues resolved, 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 days after the initial logging of the request, and users ill have an average satisfaction rating rating of 4.5 out of 5).
H
Uptime
C R A E
Uptime is a more technical measurement measurement of T operations, but is still critical critical to many users. 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).
S E R H C E
You can set uptime uptime goals for the overall company and/or specic departments and applications (e.g. the order entry application app lication will be available 95% of the time Monday to Friday Friday 8:00 – 6:00). You can also set uptime goals for specic days and times (e.g. during month-end, all nancial systems will be up 99% of the time, and support staff will be available available 24-7).
Service Level Agreements (SLAs) erv ce ev evee agr agree eeme ment ntss ar aree cr t ca y mp mport ortan antt o managing external service ser vice providers, but are becoming more important at managing internal erv ces ces.. or examp e, you can set nterna nterna SLA goals for responding to all help desk inquiries within 30 minutes, and providing 99% uptt me to a ne up netw twor or us user erss.
T ~ O F N
Security Security goals are critical to protecting the company’s company’s reputation and assets. Security goals can include having all extra-company data communications encrypted with 128-bit encryption, encr yption, and having virus denitions updated every day instead of every week.
I
Disast Dis aster er P ann anning ing Bus Busines inesss Con Contin tinuit uity y P anni anning ng Business continuity planning is a critical critical issue issue for senior management today today.. I managers need o be able to offer off er business continuity solutions that will let the company operate normally nor mally or almostt normally very almos very quickly quickly.. I manager managerss can set goals goals for business business continu continuity ity planning 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.
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anagement
As I becomes a more critical component of the organization, managing I assets is becoming a strategic imperative imperative for IT managers. For example, you you can set asset management goals for doing your rst asset inventory by the end of December, or auditing all PC assets assets by the end of June.
Po ic icie iess Users can do serious damage to systems in a variety variety of ways (e.g. (e.g. hogging bandwidth ban dwidth with streaming media, spreading viruses). To prevent this, IT managers must make make all users sign policies that describe what behavior is acceptable, what behavior is not acceptable, and what the consequences are for unacceptable behavior.
P U O R G
IT managers can set goals g oals for getting users to sign existing policies (e.g. Internet use, e-mail use) or for writing new policies (e.g. handheld devices, wireless wireless networking). For example, you 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.
H C R A
Customer Service Goals
E S
Customer service goals are very important because your users have more day-to-day awareness of them relative relative to other goals. goals. Here are some some customer service goals:
E R
User Us er Se Serv rvic ices es Le Leve ve s o Se Serv rvic ice e Many new services are possible with new technologies (e.g. (e.g. Active Directory). You can set goals to deploy new services to your users (e.g. (e.g. Active Directory to every sales employee) or higher levels of existing service to your users (e.g. (e.g. higher bandwidth VPN access).
Customer Satisfaction
H C E T ~ O
Customer satisfaction is probably the most important measurement of how good a job you’re doing. Measuring customer satisfaction satisfaction can be done informally by asking users users what they think of your service or formally through surveys. surveys.
F N I
You can set customer 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 Goals T governance refers to the high-level strategies and practices of IT management. Here are some sub-goals sub-goals you can can make in the I governan governance ce category: category:
Project Approval Method/Process P U
f you don’t 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 aiding this process.
O R G H C
Busi Bu sine ness ss IT A ig ignm nmen entt Aligning I with business goals is a critical issue for both business and I managers. Measuring alignment can be difcult, 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
R A E S
One of the most critica criticall activitie activitiess an I manager performs performs is scanning scanning the environme environment nt for critical technologies and issues that may 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, r what you want to do with what you learn from scanning the environment.
E R
Busi Bu sine ness ss Part Partne ners rs ip
H C E T ~
As business requirements change, you you may need to develop expertise in a specic technology hat is not yet mature. This will require a business partnership with vendor(s) to ensure that the echnology meets your requirements today and in the future. future. You can set goals for what features you need to develop from this business partnership, or when and how h ow you want to end such a partnership.
Top Management M anagement Commitment
O F N I
n many companies, senior management doesn’t understand and is not committed to using IT or competitive advantage. advantage. You can set goals to improve improve senior management’s management’s understanding and/or increase their commitment to IT (e.g. (e.g. get the VP of marketing to sponsor a CRM project by December 31).
Project Portfolio Management As you start to run many I projects at the same time, you need to to manage them as a portfolio. ortfolio management means that you calculate business value for each project and determine hich projects to undertake based on the amount of business value they will generate. generate.
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Outsou Out sourc rcing ing Ins Insour ourcin cing g I departm departments ents need need to to outsource outsource many routine routine and non-strategic activities (e.g. help desk support).. How support) However ever,, I departme departments nts somet sometimes imes also need to develop new competencies in new technologiess (e.g technologie (e.g.. Java) Java).. I manager managerss can can set set goals for both bo th outsourcing (e.g. all ve locations will have outsourced help desk support support by December 31) and insourcing (e.g (e.g.. by December 31 the company will have hired ve Java programmers and written 1,000 lines of Java code).
Gettin g Buy-In or Your Getting Goals
Measuring the Success of our Goals nce yo nce you u av avee cr crea eate te goa s, yo you u ne neee to easure your actual performance towards them. his requires establishing specic numeric etrics. racking actual performance lets you o sev severa era mpo mportan rtantt tas s: Create and modify specic service level agreeme agre ements nts s as yo you u earn mor moree a out what different customers want. want. on uct per or ma mance rev ews o based on the goals you set.
st a
ange o escr pt ons o st a t o match matc h I depart department ment goals and inuen inuence ce behavior.
Publicize what a great g reat job you’re doing with Before you assign goals to employees, you need the specic data you gather. g ather. 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’ Here’ss how to get buy-in for your goals:
.
Involve employ Involve employees ees in selecti selecting ng measuremen measurements ts and quanti quantiab able le performance performance levels. his should be a negotiation instead of you imposing expectations on them. them.
2. Map the performan performance ce expectati expectations ons to their their job descrip descriptions tions. This will give them them a greater sense of responsibility and ownership in in the outcome. 3. Get the the employee employeess to measu measure re and track the results results thems themselves elves.. his increases their ownership and lets them take corrective action as quickly as possible. . Evaluate Evaluate employ employees ees based based on the the goals goals you you have have agreed agreed to. You should also ask how the performance perfor mance level goals can be improved and set the goals g oals higher each review. review.
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Using Your Budget as a Management Tool Mana Ma nage geme ment nt Ap Appl plic icat atio ion n Planning Risk Management Commitment
or ng co a orat ve y to pr or t ze expen tures e ps ga n buy in from all staff.
Control
e u ge gett ca can n e us use e as a v ng pr or t za zatt on oc ocum umen entt that differentiates between essential and non-essential activities.
Performance Evaluation
Compensation and performance reviews can be tied to hitting budget targets.
O R G H
Decision makers are forced to think through activities in detail. Information on projected expenses helps to assess feasibility and risk, and secure resources in advance.
P U
Mana Ma nage geme ment nt Be Bene net t
C
Use the budget analysis tools in your workbook to help you identify potential line items on your T department budget. Next, use this plan to help you turn your budget into a useful decision-
R
making document.
A
•
E S E
•
R H •
C E
Involve Others. Getting your decision-making decision-making staff on board with the budgeting process and helping them understand that the budget will be used as a measurement tool ill ensure their commitment. Lay your assumptions on the table to ensure everyone is n the same page. Talk to the Right People. HR and nance will be able to provide you with some Talk valuable information to help ensure accuracy. accuracy. HR will be able to provide accurate eadcounts, benets gures, and predict salary increases, whereas nance can help
predict the impact of seasonal variations on income.
T ~
Look at Last Year. Last year’s nal operating budget is your best “reality check” on actual costs. However, However, avoid making your budget a mere extrapolation of the past - new anticipated projects will have a big impact on your nal n al numbers.
•
O F N
Identify Your Variables. The cost of some factors is hard to predict. Know your variables and draft several advance advance budgets (“exible budgets”) that account for potential variances. variances. See if you can gain permission to include a contingency budget - a specic percentage of your total budget - for covering cost variances in “iffy” areas. areas. Look Into “Rolling Budgets.” Rolling budgets work by adding an additional quarter o the end of the budget as the current quarter ends. This forces you to think long term, evisit your plan four times a year, and continually revise your projections. his method eeps your budget current and accurate, which is better for forecasting.
I
•
Prepare Quarterly Reports. Every three months, compare how well your department is faring against budget budg et 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 ectify or justify the differences.
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Dealing with Budget Cuts Before your CEO demands a 10% cut to your IT spending, build exibility into your budget today.. he downturn in the U.S. today U.S. economy economy makes this the the smartest pre-emptive move you’ve you’ve ever made.
W y IT Gets Cut P
IT is often the rst to get slashed when an organization org anization is facing a nancial squeeze because those in IT have traditionally done a mediocre mediocre job of linking IT performance with company business objectives 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 unied business/IT strategy and establishing an architecture process that addresses the enterprise’s key business goals. What should you do?
U O R G H
Be Prepared. Make itit a practice practice to tie I performan performance ce with busines businesss performance performance
C
measures return on investment, return return on center. assets, and prot per employee.like Show through the numbers that on IT equity, is not just a cost
R A
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 down or cut completely.. This allows you to prioritize projects and protect those of high priority. completely •
Utilize Methodology Methodology.. Make it a practice in your IT department depar tment to identify the target line item for budgetary reductions. Then ask your employees to consider ways in which
to maintain the business benet of the line item while cutting costs simultaneously. simultaneously. This push toward creative thinking will have big results. •
The Best Defense is a Good Offense. Building exibility into your IT budget is key.. his way, key way, you won’t won’t be sorry when your CEO asks you to cut your budget budget by “Xpercent.”
E S E R H C E T ~ O F N I
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Stage 8> Publish, Promote, and Maintain Your Strategy
Stage 8> Publish, Promote, and Maintain You Y ourr St Stra rate tegy gy
Stage
8
Congratulations. You 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 we outline what you need to do to formally launch your Strategic I plan. As with much in the realm of strategic planning, communication is the key. key.
P U O R G
Step 1 – Build Your Your Strategic Plan Documentation
Use the Strategic IT Plan template to bring together all of the elements you have created created in this process into one concise plan that can be recommended to senior management. manag ement. We We also have a
H
template that you can use to create a comprehensive strategic plan presentation.
R
C
A
Step 2 – Present Your P an to Senior Management Present the plan to Senior Management and require its its ofcial approval. approval. Executive sponsorship is critical for any strategic initiative to succeed.
E S E R
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, However, it is still important to develop a communications plan to ensure that all stakeholders are fully aware of the plan’s plan’s contents and implications. You You also need to consider the organizational impact of your initiative. initiative.
H C E T ~ O F N I
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In This Stage Stage 8> Publish, Promote, and Maintain Your Your Strategy.......................... Strategy............................. ... 135 Step 1 – Build Your Your Strategic Plan Documentation Documentation ............. .......................... .................. ..... 137 Step 2 – Present Your Your Plan to Senior Management....................... Management.............................. ....... 138 P
Step 3 – Communicate and Manage Change ................... ................................ .................... ....... 139
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Stage Summary............... Summary............................ .......................... .......................... ........................ ........................ .................... ....... 141
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ackground> A Guide to Killer Boardroom Presentations...........................
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Guide to developin developing g a communica communications tions plan..................................... plan......................................... .... 143
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Design the Roll-Out Plan ............ ........................ ......................... .......................... .......................... ..................... ........ 146
The Rollercoast Rollercoaster er of Change... Change................ .......................... .......................... .......................... ....................... ..........147 147
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Adjusting Yo Your ur Current Organizat Organizational ional Structure............. Structure.......................... ...................... ......... 149
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Tips For Ongoing IT Strategic Governance................................ Governance........................................... ...........150 150
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Stage 8> Publish, Promote, and Maintain Your Your Strategy.......................... Strategy............................. ... 185
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8.1 Notes for the Strategic IT Plan Template........... emplate........................ .......................... ................. .... 187 8.2 Notes for PowerPoint Slide Presenta Presentation tion ........................... ........................................ .............190 190 8.3 Communica Communications tions Plan Template.................... emplate................................. .......................... ..................... ........ 192
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Agi ity Tips he end of this strategic planning methodology is not the creation f 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 overall goal of business/IT alignment. Review your progress. If If your proudest achievement is is a nice looking plan document, but you still feel that the executiv executivee and I 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 Pow PowerPoint erPoint presentation. What You Need To To Do Assemble your strategic plan document. Open “8.1 “8.1aa I Str Strate ategic gic Pla Plan n emp emplat late”. e”. Most of the content for the plan should now be in your workbook. “8.1 Notes for the Strategic IT Plan Template” indicates which which workbook content should be incorporated incor porated into the plan. Circulate a draft of the plan to your planning planning group. If your process 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 However presented to senior executiv executives es and the stakeholder community. community. Create a master strategic plan PowerPoint presentation. “8.2 Notes for fo r PowerPoint PowerPoint Slide Presentation” provides you with notes for incorporating your SITP workbook content into a comprehensive presentation. The le contains a link to the shell PowerPoint Pow erPoint 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 identied identied as providing the greatest strategic value to the organization.
Much of the content of your strategic plan can be derived derived from the workbook tools you have already completed. The nal step of the plan creation process is, paradoxically, paradoxically, to write the rst page – the “Executive Summary” (also called a Management Overview) section of the template. his is a succinct summary of your entire plan with specic focus on changes or projects proposed, costs involved, and expected timelines. The Executive Summary is the single most important important section of your plan and, in many cases, it is the only section that management will actually read. Your Executive Executive Summary 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. company. Once you have completed the Executiv Executivee Summary, your Strategic IT Plan is complete and ready to be proofread. your plan as carefully careful ly as you would aideas resume toseriously a prospective employer Spelling mistakes,Treat grammatical errors and poorly structured canto impactemployer. your .
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credibility and diminish the likelihood that management manag ement will approve, let alone champion, your projects. Page 137
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ave a draft of the plan reviewed and approved by your planning group. g roup. Invite them to critique it and make suggestions for improvement. Make sure that you give give them at least a week before you need to create a nal draft.
The PowerPoint Presentations P
n addition to the strategic plan template document in Microsoft Word, Word, we also provide you with wo PowerPoint PowerPoint presentations. presentations.
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The rst is an empty template called “8.2a Slides to Present Your Your Strategic IT Plan” that you can ll out with with highlights of your plan. The second – “1.8 Convergence of Tec Technology hnology and Core Business Strategy” – is more ocused on educating your audience about the reasons that you have completed a strate str ategic gic plan plan for the the I dep departm artment ent..
These presentations will provide valuable backup backup material for communicating your strategic T plans and processes, whether it is to senior executives executives,, other managers, or line workers. 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. n the workbook workbook secti section on “8.1 Notes Notes for for the Strategi Strategicc I Plan empla emplate” te” you you will nd detailed detailed notes suggesting how to use your workbook content to populate p opulate the slides in “Slides to Present Your Strategic Strategic I Plan.”
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Step 2 – Present Your Plan to Senior Management Objective:
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Win formal approval of the Strategic I Plan and its recommendations. recommendations.
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What You Need o Do
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Send out the nal version of your plan ahead of time to everybody you have have invited to the presentation. Since your document is probably p robably fairly lengthy by now n ow,, highlight specic areas that they should focus on in case they do not have time to read the whole document. Make sure that you make make the time and date of your presentation clear and conrm who will be attending ahead of time.
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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 don’t alienate and bore them by using using techno-babble. hey will want to talk in terms of costs and benets, so make sure sure that you have these gures handy for every single aspectt of your plan. aspec plan.
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Wrap up with approval approval and next steps.
ake 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 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 you need senior management to approve and champion it. Many well-conceived IT initiatives have have failed because they did not have executive executive sponsorship and support. Your understanding understanding of your company’s company’s business objectives and your your ability to demonstrate the ways in which your plan supports those objectives objectives is essential in gaining support from senior managem man agemen en . P U
Step 3 – Communicate and Manage Change
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Objectives:
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Communicate the plan to the broader community.
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Prepare for change management.
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Establish long term goals for Governance.
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What You Need To To Do Develop a formal for mal communication plan for the SITP. SITP. Use “8.3 Communications Plan Template” Tem plate” 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. 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. 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.
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Creating a Strategic Creating Strategic I Plan has limited limited value value if you do not communicat communicatee the end result to others. others. Although this is perhaps the most important section of this entire document, it is the one that most I profess professionals ionals ove overlook, rlook, for for a variety variety of reason reasons. s. o some, communicating with others is something they do not feel they are particularly good goo d at. To T o others, laying out a plan with milestones is 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. It is your opportunity to get others excited about the opportunities that technology can create for your company.
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Esta is a Forma C ange Management Process Follow these steps to manage your process of change: 1.
ene th the Pro Projject Ad Adequate telly: Clearly dening the project being pursued will help sharpen the vision. Nebulous or overly broad problem statements are harder to work
ith than more direct statements. Break the problem down into bite-sized portions. P U O R G H C R A E S E R H C E T ~ O F N I
2. Make Make the the Int Intend ended ed Out Outcom comee Clea Clear: r: The goals of the anticipated change should be ade clear to all those affected by the change. Focus on measurable value that is highly visible. 3. Priori Prioritiz tizee Multi Multiple ple Imp Improv roveme ements nts:: Often there is more than one change opportunity in play. 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 priority op portunity against established criteria. 4.
etermin eterm inee Cost Costs, s, Fea Feasi sibi bili lity ty and and Ben Bene ets ts:: T To o help calculate the possible costs and enets 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, r less paperwork. Market these benets b enets to the user community community..
5. Assess Assess Your Trai rainin ning g Need Needs: s: raining is essential when changing a process. Do a raining assessment in conjunction with the Human Resources Resources department, especially if he change requires new skills or competencies. Coordinate to ensure the right people eceive the right training at the right time to maximize positive effects. effects. 6. Cons Constru truct ct a Tim Timel elin ine: e: Once you know what needs to happen, the next decision is hen it will happen. Develop an implementation timeline that incorporates incorp orates major ilestones and actions for approvals, budgets, budgets, and resource requirements 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 Y our Strategy By following following this process process you have have established established a framework framework for formulating formulating I strat strategy egy and making strategy level decisions about IT for your organization. In this nal stage stag e 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. The following chart shows the progress of developing the plan after Stage 8 of the engagement.
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Status
Stage
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Creation Of Steering Committee
one
Scope Denition of “Strategic”
one
Strategic IT Plan Kickoff Meeting
one
Preliminary Report With Goals and Timeline
one
Docu cum men entt co corp rpo ora ratte Vi Visi sio on, Mis Missi sio on an and Str Strat ateg egiic Go Goal als s
one
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Analyze Core Competencies and Competitive Position
one
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Current IT Organizational Structure. Hardware and Software Inventory
one one
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Analysis of IT Trends
one
Review of IT Against Governance Maturity Model
one
IT SWOT Analysis
one
List of Proposed Future IT Directions
one
List of Requirements for Resolving Gaps (Roadmap)
one
Corporate IT Vision Statement
one
6
Corporate IT Governance Charter
one
6
Strategic IT Goals
one
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one
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c eva e u get r or t ze
easures
na ys s ro ect
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A E S E R
one st
Completed Strategic IT Plan Document
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T
one
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one
8
Comprehensive Strategic Planning PowerPoint
Done
8
Strategic Planning Communication Plan
Done
8
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Background> A Guide to Killer Boardroom Presentations P U O R G H
Giving a presentation on the best of days is a nerve-wracking experience, but confronting a team f cynical executives executives is the ultimate presentation stress test. Use these tips to help you master the art of boardroom presentations. presentations.
Presentation Best Practices: 1.
Plan Your ime: Allot one minute per slide, and two minutes for those ith graphs, charts, or tables that equire explanation. When planning your presentation, follow this time anagement anageme nt rule of thumb:
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T To o decide on the total slides you should have,number take theof total time allowed, allowed, subtract 10% of that time, and round down to the nearest ve.
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For example, you have 30 minutes to present. Subtract three (10%) rom 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.
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Tips for Building Blockbuster Presentations t cros cr oso o t ower ower o nt nt,, a ap apto top p co comp mput uter er,, and an LCD projector anybody can put together an effective presentation. When the CEO nv te tess you you to ma e a pr pres esen enta tatt on to t e sen sen or management group, you need to knock, not bore, their socks off. Here are some tips to help ma e your your pre prese sent ntat at on onss s ng ng.. Organize Your Your Information Infor mation. ou hould be able to state the goal of your presen pre sentat tat on n tee teen n wo worr s or ess ess.. Consider not only the information you ust present, but also the questions that ou ar aree e y to e as e . re rese sent ntat at on echnology won’t save poorly organized aterial.
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2. Ma Main inta tain in Re Read adab abil ilit ityy: Projections
aren’t as clear as on-screen visuals. •
Use Arial or Times New Roman onts only and a minimum 18point size. Master the 5x5 rule - no more than ve lines per slide and ve words words per line. Stay within your presentation software’ss default title and text software’ blocks.
se
es to
a mmer ammer
o me ey ome
Points he mostreading boring the presentations feature. a speaker content of his content or er own s es to t e au ence. pea to he audience and have the slides support, ot repeat, your words. a ance or s w t mages. or y lides are dull and distracting. Use hort bulleted information nuggets comp emente y p otos an gr graap cs. Limit yourself to 20 words per slide. slide.
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3. Don’t Don’t Use Tech Technol nology ogy Just Just Becaus Becausee You You Can: Can: echnology cannot replace creativity creativity.. Other media – such as handouts – are sometimes more appropriate, approp riate, especially for detailed or complex visuals. If you do present an electronic slide show, show, always have print copies of it available (note: conserve paper by printing multiple slides slides per page). . Br Brin ing g Tw Two of of Ev Every eryth thin ing: g: Assume that your technology will fail. Double or o r triple
up. For For starters, bring an extra laptop, modem, cables, and backup copies of your presentation saved to CD-ROM (oppies are not reliable enough). 5. Avoid Avoid Rea Real-T l-Time ime Vis Visits its to the the Interne Internet: t: he risk of technology technolog y failure is too high. Instead, store a copy of the site on your hard drive and use your browser to open the le. . Ho Hon ne You Yourr Sty Style le:: The only way to improve is to practice, p ractice, practice, and practice. •
Focus on perfecting the rst 30 seconds and last 15 seconds of your presentation. These moments are where lasting impressions are made. ractice holding eye contact with individual individual audience members for upward of ve seconds. Quick Quick left to right scanning of the audience is less likely likely to engage them. Finish early. early. Be brief and candid. his shows respect for your audience’ audience’s time. time.
P U O R G H C R A
In the boardroom, your budget and your reputation are on the line. Developing your presentation skills is an important way to get g et your voice heard in your organization.
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Guide to Developing a Communications Plan
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Face it: communications skills are not among the many abilities for which information infor mation technology (IT) professionals are known. IT professionals pride themselves on being doers, not talkers.. But a “do rst, explain later”, attitude can doom a project as surely as faulty technology. talkers
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I is central to business processes and organizational goals. goals. o move 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.
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This brief guide will walk you through the creation of a communications plan. We We have attached a downloadable template document that you can use to create your own planning documents.
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Your organization may be large enough to employ professional communications communications staff. Remember,, their job is not to communicate on your behalf; it is to help you communicate. Remember co mmunicate. Use this guide to evaluate their services. Are they asking the right questions?
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W en Do I Nee a Communications P an?
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It should only take a few hours to draft a communications plan. You have to ask yourself whether the issue that needs communicating communicating is worth the time investment. Here are just just some possible initiatives that might warrant a communications plan. Page 143
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Major Software/Service Roll-out. o maximize maximize awareness and acceptance of a new application or service. “Build it and they will come” is not enough. •
New Policy Initiatives. Communication is crucial to encouraging compliance with policy such as a new security policy or a disaster recovery plan.
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epartment/Organization Wide Desktop Upgrade. Do some advance legwork to elp clients see the value of a change to to their desktop desktop workstation. workstation. his should reduce service-calls after the fact.
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Introduction of New Communications Vehicle. Vehicle. A new communication vehicle – such as a newsletter, regular regular e-mail, or intranet page – should itself be given maximum introductory exposure to encourage its use.
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t is also important to note that if you have a range of existing communications vehicles, vehicles, this oes not mean you don’t need to do communications plans. A newsletter or a Web site is only a ool; you need to plan how to make effective 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. how
Key Point: Start With the Audience A key failing of many communications initiatives initiatives is that they begin with output products – such 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 g ood idea to sit down with those involved in a particular project and brainstorm about your audience. Consider these questions: •
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Who is our audience? This seems like a “no-brainer”, but it can be more complicated han you think. If a newsletter is being done solely to “make the head ofce happy” hen the audience is the head ofce, not the people reading the newsletter. Does your audience read newsletters or do they line budgie cages with them? Do they read and espond to e-mail? Do they use the Internet/Intranet? What do we want our audience to know? Information Technology is complex; owever you should be able to state the benets of a particular technology in simple erms. Focus on creating a list of key messages. If If you can’t 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, initiatives, for example, example, communication f Y2K issues to clients was part and parcel of encouraging due diligence steps
hat needed to be taken. taken. he 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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he considerations prompted by the above questions should be interlocking interlocking.. For example, the nature of your audience and how they receive information will guide your choice of communications vehicle. Your Your key messages will provide the “why” for what you want that audience to do.
Anatomy of a Communications Plan Your communications communications plan will lay out how key considerations considerations – such as audience, message, message, and action – t together and with other considerations such as budget and timeline. The goal is to have h ave 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 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 rst. This T his should be a brief statement, no more than one short paragraph. Objectives: Break down your overall goal g oal into two or three discrete objectives. objectives. •
•
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Key Messages: This is where you list the gist of what you want to communicate. communicate. You You should be able to boil down your messages into two or three bullet points. Potential Barriers: Y You ou 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: ow 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 toward a particular goal? This part lends itself well to a brainstorming session: start with all the options regardless of how unusual or expensive. expensive.
P U O R G H C R A E S E R H C
•
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.
•
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imeline: By this point you should have a short list of actions that are “do-able”. Now it’ss important to plot out a timeline for the proposed actions to take place. Take care to it’ consider maximum impact for each action and a mutually supportive timetable.
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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 timeline is met.
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Post Mortem: A 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 Plan Control is an essential part of any project roll out. Make sure your project plans have have the ollowing components to ensure you’re you’re controlling it instead of the other way around: 1. Tea eam m Man Manag agem emen entt: The project managers manag ers need to develop skills that create an efcient production system and a cooperative and effective team culture. P U O R G H C R A E S E R
2. Comm Commun unic icat atio ion n Man Manage ageme ment nt: his enables interaction between project teams, stakeholders, clients and senior management. 3. Ris Risk Man Manag agem emen entt: his includes strategies and tactics used used to identify identify,, avoid and control project risks. 4. Qual Qualit ityy Man Manag agem emen entt: Activities and techniques used to ensure that all project activities and work products comply with all relevant standards, procedures and requirements. 5. Tim Time Man Manag agem emen entt: This includes processes and techniques used to ensure the timely completion of each project. 6. Cost Cost Man anag agem emen entt: 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.
ene Each Project. This section will help the Project Managers start the task of utlining each project. Each project requires a Project Charter with the following compone com ponen n s: •
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ponsorship: Who is commissioning the work? User Community: Who will use the product? How many users are there?
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Functions: What will the product do? What purpose will it serve?
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Deadline and Other Constraints: When must the project be ready for release?
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Budget: Who is paying for the product?
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2. Plan Plan Ea Each ch Pr Proj ojec ect. t. Always come equipped with a detailed 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, 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 nish each project. Estimate Task Times Accurately. Time estimates are difcult aspects to predict accurately.. Unexpected delays and unforeseen aspects of implementation often accurately
extend a timeline by over 40%.
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Create Task Analysis Forms. A ask Analysis Form is used to collect information f the most consequence for your schedule and budget. •
chedule Each Task (using a Gantt chart or Critical Critical Path Charting). Gantt charts attach work tasks to a calendar, while the Critical Path charts aren’t date specic but represent more accurately the task-by-task task-by-task progression of the project. Create a Budget. A budget can only be useful if it is realistic, so make make sure your estimates do not turn into a “pie in the sky” piece of work. An unrealistic budget will only create frustration fr ustration and disappointment among your project teams, multiplying the lack of incentive to complete the projects in a timely manner.
•
•
taff the Project Team Team. When selecting members for your your project teams, teams, you may have limited options available. Make sure that your selections reect the collection of skills needed as well as who is available. available. If your selection list extends beyond the skill set requirement, make your selections based on individual (or eam) track records. This may seem to be a simple point, but it cannot be b e stressed enough. Selecting teams and team members with proven track records improve the probability of your project being delivered on time and and within budget. Win Client Approval for the Plan. The nal step in planning your projects is btaining the approval of your clients. Depending 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. implementation. he ormality of client approval generally depends depends on the size and complexity of each project. Make sure that the project plans are signed by someone with the authority o 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 covered all the bases, check check again, and then check one more time for good measure.
P U O R G H C R A E S E R H C E
The Roll Roller ercoa coaste sterr o Chan Change ge Regardless 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. he 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’ people’ss positions. he 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
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egatively.. of egatively Previous change experiences play a large role the in the perception amongst , personnel how the change process will play out over long term. Unfortunately, Unfortunately any change experiences are fraught with stress. Watch Watch for “ght or ight” responses in personnel, which may manifest as shock, anger, or denial.
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tep 1 – Shock/Denial: When change is announced, personnel will probably respond
•
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tep 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 lower productivity, productivity, and high urnover. Clear two-way two-way communication can mitigate many of change-associated stafng losses. Acknowledge the stress, listen to personnel concerns, express exp ress empathy, empathy, dispel ncertainty,, and explain why the change is taking place. Acknowledge the disruption ncertainty and insecurity change can bring, but also sell the benets for the organization and its employees.
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tep 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 However,, shortly after the bottom, things start to improve. improve. People start to become more procient with the new way way of doing things, and their their productivity improves. improves. This gives employees a sense of hope about the future, which creates a virtuous circle of productivity improvement and greater hope.
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•
tep 4 – Rebuilding: The pieces of the puzzle should all be on the table and how the pieces 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 ith the concept of change. Establish a rewards system based on success measures to
otivate participation.
Change usually has a cultural impact that is often underestimated. Pay 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 Your Current Organizational Structure If 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: results: •
No wonder I never get a break. We don’t have have enough people.
•
How do we get anything done? We don’t don’t have the mix of skills we need. P
Simply put, most IT departments are either staffed inadequately or inappropriately. inappropriately. Take heart in knowing that you are not alone. alone. The important thing to do now is to recognize the the situation and determine an action plan for making improvements. improvements. Here is what we suggest:
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Conduct performance reviews. Before you make any changes, it is 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. po ssible.
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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. sets. You run the risk of losing these people if you do not move move them into positions where they can use their abilities ab ilities..
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Get rid of the bad apples. apples. It is probably equally likely likely that you you have some people who are counterproductive to your your efforts. There may be a number of reasons that you have have held on to them until now, now, but you should begin planning to replace them. Depending on the nature of the problem and the potential to replace lost skills, your your timeline for terminating the ‘bad apples’ app les’ should be at most six months. •
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Hire to ll gaps. Only once you have moved moved your existing staff into positions that best t their skills and terminated employees who do not t should you begin hiring to ll gaps. Waiting to hire people may feel like you are moving slower than necessary necessar y, but you have to be careful to avoid avoid disrupting your current culture. Too many moves too quickly can make everybody paranoid that they are the next to be replaced.
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Train to retain. Now that you you have the 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 productivity.. Manage their careers. Let’ Let’ss face it – managing your your people is probably one of the most difcult parts of your job, but it is probably also the most important factor in both your and your department’s department’s success. 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 adjustments as your needs change.
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Tips For Ongoing IT Strategic Governance Comp ete Quarter Quarter y Top Top Executive Executive Investme Investment nt Reviews Reviews A quarterly review of your projects and investments investments is essential to guaranteeing the health of
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your overall strategy. owever,, most projects are often treated as independent silo operations. owever operations. his 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. roject Portfolio Management (PPM) allows you you to collect and control your entire suite of IT projects as a single set of interrelated activities. activities. PPM is based on the same theories as those governing nancial investment portfolio management. PPM allows you to:
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Catalog and know what projects are planned p lanned and/or already underway. rioritize all projects against strategic business goals.
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Allocate shared resources more effectively effectively and exibly. exibly.
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revent project redundancy and overlap.
One of the rst steps you should take is to assign a Project Portfolio Portfolio Manager. This person ill manage the Project Portfolio Master Schedule and be responsible for calling all quarterly meetings of top executives. executives. he goal of these quarterly meetings, and the Project Portfolio Portfolio Manager in general, is to identify project winners and loser early, early, minimize risk, and optimize resource allocation.
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Review Utilization Opportunities Cross-project thinking will help you identify opportunities and risks. risks. If one project falls behind schedule, this could have a ripple effect through all other projects with which it shares resources.
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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, staff, and map out risk points and mitigation plans. Similarly Similarly,, if some resources are being underutilized, you should nd new ways to to make use of them in other projects. dentify the following:
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1. Und Underut erutili ilized zed asset assetss that can can be deployed deployed elsew elsewher heree 2. Ove Over-u r-util tilize ized d assets assets that that need need to be cons conserve erved d 3. Ways to improv improvee asset utili utilizatio zation n by training, training, mentorin mentoring, g, and other other technique techniquess Always be vigilant in watching watching for ways to maximize resource utilization. utilization.
Re-establish Project Priorities rojects should be re-prioritized as funding and business conditions change.
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Stage 8> Publish, Promote, and Maintain Your Strategy
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Catalo Cata log g al alll pro proje ject cts: s: Using a spreadsheet or database, consolidate all project details. For each entry, include the project p roject name, description, goals, g oals, estimated costs, established timeframes, and all staff members assigned, including including their role and degree of involvement. Make this repository as detailed as possible.
2. Re Re-p -pri rior orit itiz izee all all projec projects ts:: Project value should directly correlate to organizational
objectives.. Once these objectives are clear, assign rankings and update your catalog. objectives •
rojects that most closely align with organizational objectives, maximize prot, and minimize risk are your most important and should receive top ranking.
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Localized cost-cutting projects should be of the lowest priority. priority.
3. Divide Divide yo your ur rank ranked ed proje projects cts into into type types: s: Different projects achieve different organizational aims, involve different stakeholders, and often receive funding from different sources. Separating out these projects will 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)
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An upgrade project (improvement of the existing technology base)
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A strategic investment investment project (new endeavor that will bring revenue revenue or increased service). These should receive the highest resource allocation.
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. Make Cuts: he overall overall health health of the portfolio, not individual projects, is your your goal. The cuts you make to your portfolio may be dictated by resource availability availability.. Cuts could come in the form of complete cancellation of, or in reduced resource allocation allocation to, low priority projects. 5. Repr Reprio iori ritiz tizee Re Regu gula larly rly:: 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 re pository as soon as they are made. Remember: all changes should be made at the portfolio p ortfolio level, not the project level.
Meet with key stakeholders from sales, marketing, operations, nance, IT, and other departments depar tments on at least a quarterly basis. 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 por tfolio level instead of the project level so that the best opportunities from across the organization are pursued.
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Conclusion A good plan today is better than than a perfect plan tomorrow. tomorrow. George S. Patton
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Congratulations! You now have have a methodology and a living document to guide you, your epartment, and your organization in the strategic application of information technology. You should should now have the support of key stakeholders in your organization, which will make make implementing your plan much much easier. Keep their support by maintaining an open and continuous ialogue through your IT Steering Committee. We suggest reviewing your plan and making revisions on an annual basis, unless there is a We signicant change to your business business that requires you you to rebuild your plan. plan. If you take enough ime 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 reactively..
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About Abo ut Info Info-T -Tech ech Rese Resear arch ch Gr Group oup Info-Tech Research Group is a research and professional services Info-Tech ser vices 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 Info-Tech technology and business. business. Our web publications, reports, methodologies, education, and consulting services help I professionals across North America and the U.K. to stay current, effectively manage people and technology, and achieve professional success.
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Strate Str ategic gic IT P ann anning ing an Gov Governa ernance nce::
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Info-Tech’s Info-T ech’s Step-By-Step Consulting Methodology
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John Sloan, Research Research Analyst
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Contributors:
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Davin Juusola, Vice President,
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Jason Livingstone, Research Research Manager,
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Joel McLean, CEO. CEO.
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For more information about the Info-Tech Research Group, Group, and how we might help you, see our Web site at http://www.infotech.com.
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