Approximately half of what is stated in the IT strategic plan for 2016 is invalid and incorrect today (day of launch)! It is like driving your car with a map from the 1950’s. Quite a lot has happened since then.
A couple of days ago, we entered a new year with high hope and promises. It is a year dominated by digitalization and managing its affects in an efficient way. What digitalization is in 2016 is not yet known but it is clear that it is different from how it was described in 2012 – that is how fast the wheels of evolution is turning. We no longer see digitalization as a set of new technologies to be implemented (big data, mobility and cloud) but rather how IT supports business in digital competitiveness in a faster business environment. Today, it is about leadership, knowledge, business interaction and innovation to create a proactive business partner of a general traditional IT organization. Being digital and agile is still high on the CIO and business agenda but we need the right focus.
Moving into 2016, it is about executing the annual plans for 2016 – defined in 2015. 90% of all IT departments use a annual planning cycle with sequential activities including from trend analysis, strategic formulation and plans, budgeting and KPIs to drive the IT organization in the right way – and optimise business value creation. It is a tedious process but needed to get the right focus.
The question I ask myself is how valid that strategic plan for 2016 is today (New Years Day). It might be an idiotic question to ask but the affects of digitalization influence the validity of information and knowledge. The fact is that one of the key elements of digitalization is reduced predictability in the business and IT landscape – meaning that the value of information and knowledge quickly deteriorates. Around the year 1995, it was quit easy to predict the business and IT landscape in the next 24 months but not today. Today, it is difficult to do predictions (in many industries) for the next 12 months! What does this actually mean for the strategic planning?
The annual planning for 2016 is based on the trend analysis. This is the activity where we gather and analyse the current situation (for example through benchmarking) and define the key focus areas going forward. This activity is then input to the strategic planning and direction for the coming year. Great! What we see is that the trend analysis was carried out before the summer 2015 and with an increasing unpredictability, it is only valid for 12 months. After 12 months, it can no longer be trusted, as the environment has changed. Therefore, the annual plan (based on the trend analysis) can no longer be trusted after April/May 2016! The result is that 75% of the year, the IT department is run in complete darkness!
The validity of information does not drop from one day to another, as it is a gradual process. Over the 12 months, the information will drop a little by little until the validity is lost. If one considers that the validity of the trend analysis is approximately 30% after 12 months, then it would mean that the validity of the annual plan at the beginning of the year is around 50%. Half of what is stated in the annual plan is incorrect! That is not good! It is like driving your car with a map from the 1950’s. Quite a lot has happened since then.
My point of view is that knowledge and information is crucial for IT to manage digitalization and support business competitiveness. It is all about having the right information at the right time to make the right decisions to support with right IT services. With access to the wrong information, then IT will make the wrong decisions and support business is the wrong way. I see quite a lot of this. The way we manage information and knowledge need to change and follow the speed and pattern of the business environment. In a fast moving business environment, then IT need to have faster planning in shorter iterations – focusing on what is important now and validate previous assumptions.
- How valid is you annual plan for 2016? When was the information and knowledge gathered for this plan? What has happened since?
- Start to think about how to validate information and knowledge. It needs to be integrated in the annual strategic planning cycle.
- Contact Hans Gillior (Sofigate) to get concrete advise of how to improve validity of IT strategy and annual plans. It is the key to success in the digital era.
How we use information and turn it into knowledge is one of the biggest challenges of IT today. We see an increasing consumption of information today from analysts such as Gartner and Forrester but still little knowledge and accurate decisions are taken. The fact that approximately half of all conclusions in the IT annual plan for 2016 are invalid on New Years Day is quite an eye-opener. But why is that? What is the reason for this behavior? Well, my view is that we have not adjusted the governance model to the new digital environment. We use the old tradition models to manage new conditions – and assume great results. Digitalization is not about new fancy tools but about knowledge and leadership. That is a 100% accurate conclusion.