IT Focus Area: Strategy
July 13, 2015
IT Strategy: How a One-Page Plan Communicates Your Business Value
Let’s face it: we, as IT leaders, can do a better job of educating business leadership regarding how IT supports and helps drive the overall business strategy.
Executives often view IT as a cost, not a profit center. This is best illustrated by a statistic: most enterprises spend 70 to 80 percent of their IT budgets on keeping the lights on instead of innovation. While Forrester reported that IT budgets will rise by more than 5 percent in 2015-2016, most of the IT spend will go towards maintaining existing systems. As a result, it is understandable that executives are sometimes unsure of how IT contributes to the business’s goals and the bottom line.
Although IT is increasingly gaining a seat at the decision-making table, further work remains to fully educate business leadership on how IT adds business value and creates a competitive advantage. Business executives see the work of IT “above the surface” with activities such as supporting end users and providing specific technologies. However, they don’t often understand how IT moves the business forward. This is because — like an iceberg — the largest part of IT is hidden under the surface.
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To bring further clarity to this issue, executives need a lens to view IT efforts both above and below the surface. When provided with this capability, business leaders understand the depth and breadth of a company’s IT strategy. Experience has shown that this type of understanding makes it much easier for an IT organization to demonstrate its business value and gain buy-in for additional financial and staffing resources.
Introducing the One-Page IT Strategic Alignment Plan
A one-page IT strategic alignment plan gives you quick insight into what you are doing and how you are helping to drive business. This tool explains your company’s IT strategy on a high level and in terms business leaders will understand. It includes the following information:
Where you are today
Your vision for the future
How your vision aligns with the objectives of your organization
How you will make this vision a reality
A one-page IT strategy helps start conversations, as it literally puts IT and the business on the same page. It allows you to “speak the same language” as executives, outlining business objectives and the technologies needed to achieve these objectives. Also, using the section reserved for the organization's underlying beliefs and assumptions, the tool personalizes the strategy and makes it specific to your company.
Business leaders often don’t want to discuss nitty-gritty technical details. A one-page strategy lets them see why you’re spending money and how it’s benefiting the business — without forcing them to become technical experts.
How to Use an IT Strategic Alignment Plan
A strategic alignment plan helps IT move from being a reactive “order taker” or “fire fighter” to a proactive consultant. It has a variety of short- and long-term uses, including the following:
1. Strategic planning to show executives how you will move from where you are today to where the business wants to go in the future. For example, what will IT do to support a corporate strategy of growth through acquisition or what actions will the company see to reduce risk and maintain regulatory compliance?
2. Educating business leadership on why IT is valuable and how IT initiatives are supporting business strategies. This helps you “sell” your IT strategy to senior management, so you can get buy-in and budget.
3. Ongoing validation to ensure that you remain in alignment with the overall business strategy. You can refer to your one-page strategic alignment plan on an ongoing basis to make sure you are on track. For example, review it every three months to see if your top business goals have changed. Do you need to adjust your IT strategy? Are your assumptions and beliefs still valid?
4. Separation of key initiatives or planning timeframes can be accomplished by creating a group of complementary plans that can be worked separately but allow a broader picture of alignment with bigger goals. For example, by creating short-term and long-term strategic alignment plans, IT and senior management can see large scale efforts that have many components and have extended durations while also seeing how immediate activities contribute to reaching goals that may be many years out.
“Compass Lexecon retained Forsythe to help it evaluate and implement a major restructuring of the technology that supports its empirical analyses for its clients, the most important technology implementation in the firm. Working with and amongst our leadership and staff, Forsythe became a ‘student” of our business, and together with their breadth and depth of technical capabilities, developed a roadmap to enable our vision. We’re in the process of executing the projects and initiatives required, with the Forsythe Team working in true partnership. We look forward to our continued relationship with Forsythe.”
-- Neal Lenhoff, Executive Vice President, Compass Lexecon
What to Include in Your Strategic Alignment Plan
Timeline. Short-term plans are typically 90 days to one year. Long-term plans are typically one to five years.
Statement of IT strategy. In two or three sentences describe the overall IT approach and high-level objectives for the agreed upon time period or effort.
For example: Establish an IT services delivery model that provides the company with a greater competitive advantage in the marketplace through an agile, reliable, recoverable, secure and cost-effective IT platform.
Current state of IT. Enter the top five to seven known and agreed upon metrics that describe the current state of your IT. For example:
Recovery time capability in the event of a disaster is 72 hours or more.
IT is currently forced to take a 48-hour maintenance outage every quarter.
The Acquisition 1 technology currently does not have consistent recovery capability.
Portions of the Acquisition 1 technology are at the end of useful life.
Additional investments are needed to meet expectations of the business.
End State of IT in (year/month). Enter the top five to seven success metrics or key performance indicators to be achieved by the end of the period. For example:
Ability to integrate data from acquired companies 20 percent faster than industry average.
No more than two hours of unplanned downtime per year for all tier-one applications.
Provide development environments that enable on–demand provisioning for all tier one applications.
Maintain an end-user satisfaction score of 95 percent or higher
Receive an outstanding rating on four consecutive security audits.
Top 5 IT initiatives. List the five key IT initiatives required to achieve the end state. The initiatives should be drawn from organization's planning tools. For example:
1. Consolidate production applications from acquisition to the consolidated data center.
2. Provide recovery capability to support results of the Business Impact Analysis (BIA).
3. Implement a scalable and agile data center model to accommodate growth and changes in the business.
4. Provide a “maintenance” program that increases the availability of the business-critical applications.
5. Create development environments for all critical systems and applications.
Top underlying beliefs and assumptions. Document five to seven critical assumptions that both IT and the business agree upon. These define the corporate realties and constraints that are foundational to meeting strategic objectives. Here are some typical assumptions:
Organization is moving from a distributed to a centralized or managed service model.
Growth will be 50 percent organic and 50 percent through acquisitions
Acquisitions are expected to be fully integrated into the parent company within six months
A hiring freeze will remain in effect for at least another 12 months.
Budgets are not expected to grow more than 5 percent year over year.
The One Tool that Guarantees IT's Alignment with the Business
It doesn’t take long to create a one-page strategic alignment plan. The process typically takes hours — not weeks. However, it may be beneficial to work with a partner who can give you a fresh perspective on your business assumptions, cultural issues and how IT is perceived. This will help you better understand how you can support the business, so you can get faster buy-in for your IT strategy.
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