We are fast approaching 2015 strategy-setting season for those companies in which the fiscal and calendar year align. Most companies will contemplate and define strategic objectives around revenue growth, cost reduction, customer satisfaction, mergers and acquisitions, and the like. More strategically mature companies will filter those down into strategic plans for the functional units and business units of the company such as Marketing, Sales, Finance, Operations, Human Resources, and product and service areas of various kinds. The information technology department must bring to life many of the strategic imperatives of the other functional units and business units of the company. As a result, IT needs to weave itself into the narrative of each of those plans.
Increasingly, I have heard CIOs and other IT executives say, “There is no IT strategy; there only business strategy.” This sounds great, especially for a division of the corporate structure that has historically referred to itself as separate from “the business.” The problem is that this would seem to suggest that there is only one strategy: the enterprise strategy. When you extend this logic, it would suggest that there need not be a Marketing strategy, an Operations strategy, product or service strategies, HR strategies, and the like. For instance, if the enterprise strategy suggests that revenue growth is projected to be 15% for the next year, what role will Marketing play in building those revenues, and how will that division go about driving them? The Marketing strategy should provide that additional detail. Likewise, the Sales strategy should do the same, providing its version of the translation.
IT should have its own plan that is a complement to the strategies of the other divisions. As I note in my new book, Implementing World Class IT Strategy: How IT Can Drive Organizational Innovation, IT must develop a means to engage the rest of the units of the company earlier so that they can play a role in shaping the plans of each of those units, and after IT has a better understanding of what is necessary, an IT-specific strategy should be formulated.
What steps should IT undertake in order to do this? My book provides exhaustive detail on methods to follow along with stories from a variety of major company CIOs. Here are some highlights:
- Where functional unit and business unit strategies do not already exist, engage the leadership teams of these divisions, stating a desire to learn more in order to deliver more to each
- It is important that these not be conversations about technology solutions, but rather about business needs, opportunities, and challenges
- IT should be tasked with identifying the solutions to each once the needs of the other divisions have been clearly laid out
- IT should develop a simple framework reflecting what the CIO and the IT team has heard from each of the other divisions as imperatives with IT aligning existing or potential project ideas to as many as is appropriate, perhaps with multiple options to pursue in some cases
- Suggest a common framework for each of them to use
- As aforementioned, for those divisions without an existing plan, IT can develop one itself, playing back what it has learned from each division
- Even in those scenarios where plans exist, the problem often is that different divisions of the company use methods that are not common. It may seem innocuous for one division of the company to have a plan that is high-level and fits on a single page, while another division creates a plan so detailed that it requires 50 pages to explain, but IT must prioritize its efforts for these divisions and all others creating a “1 to n” list of projects, aligning the greater IT team against certain projects now, some later, and others not at all. Without a common framework with objective criteria used for each, IT has the thankless if not impossible task of determining these priorities, and the CIO may inadvertently make enemies of other leaders who feel their biggest priorities are not being met
- Align members of the IT team with each of the other divisions of the company
- I have advocated the creation of a group of “business information officers” or BIOs who report to the CIO, but align with the divisions
- In larger companies, BIOs should align with a single division of the company
- In small or mid-sized businesses, BIOs may align with multiple divisions of the company
- What is important is that the BIOs be involved in the strategy setting sessions of each of those divisions of the company, becoming an advocate in both directions
- They should readily listen for imperatives raised by a business unit that can be filled with existing IT solutions, and push back on the need to invest anew, but they should also recognize when new, strategic needs are identified that warrant fundamentally new investments
- I have advocated the creation of a group of “business information officers” or BIOs who report to the CIO, but align with the divisions
- Once IT has inputs from across the other functional units and business units of the company, it is positioned well to create an IT-specific strategy, highlighting where IT will focus its attention, noting from where each IT objective has been derived
- This will render explicit the connection points between the strategic plans of various divisions of the company and the strategic plan of IT
Ultimately, each division should have its own strategy because the entire team should be made aware of the objectives that they are helping to drive. If IT is left behind, accepting the notion that it does not have a separate plan, there are no shared objectives that everyone in IT supports, delivers against, brainstorms new ideas for, and the like.
Implementing World Class IT Strategy provides examples of from companies like Google GOOGL -0.43%, ADP, P&G, Marriott, BNSF Railways, Microsoft MSFT -0.95%, and Ecolab ECL -0.64%, to name a few. (Listen to excerpt from chapter one by clicking this link. This strategy season, push to be a more active participant in the strategic planning processes of the other functional units and business units, and develop a solid IT strategy that provides an idea of IT’s major objectives for the foreseeable future.
Does IT Strategy Matter?
