If Google would launch a new IT service today competing with your current offerings, how fast can you (IT organization) respond to the new competition? If you react slower than 6-9 months – your will most likely not survive the new rules of digitalization. Game over!
Summer is upon us! It is the time for many IT organizations to validate or review its IT strategy. It has to be updated to ensure that It provide the right priorities and capability for business in 2017 – and ensure business success. It is, without a doubt, the most important period during the year to set the agenda and ambition for the coming year. The annual strategic planning process has been used by many IT organizations during the last 20-30 years with great success but how valid is it today? Has digitalization changed the way of working in the strategic planning process?
A couple of years ago, I was asked to run an IT Strategy project for a company in the eye of the digital storm. It was obvious that the future of IT and business was very unpredictable and we did not have any idea of how the competitive situation, technical evolution, customer behaviour and political directives would look like in the next 2-4 years. All of these parameters need to be taken into consideration when addressing an IT strategy assignment. What do these parameter mean for IT? What IT capabilities are needed to drive business success in such chaotic environment?
Traditionally, IT strategy describes how IT delivers value to business in a coming a 3-5 year horizon. But if we do not know the business climate going to look like in the next 2 years, how can we define what IT capabilities and prioritizations we need in the next 3-5 years? The fact is that during a lifeline of an IT Strategy, most of the time, it hinders business competitiveness because it is based on old assumptions. In some cases, where business is changing very rapidly (for example banking, media, gaming and telecom), the IT strategy is invalid when launched. It does not reflect the current competitive situation and technical evolution but rather how it looked like 12-18 months ago. What has happened since then?
No, the current strategic planning process (based on annual cycles) is no longer valid in IT intensive industries. We see company calculating a reaction time of 18-24 months to a new trend/competitor due to the slowness of the strategic planning cycle. Ask Google or Apple what they can do in that time? And believe me, they know exactly how to take advantage of the situation. Many companies are like sitting duck waiting to be conquered – because the reaction time is too slow.
The question is what we do about this. Is there another way? Yes, obviously there are modern ways of go beyond the “old” tracks of IT Strategy and planning processes. The new way of working is based on enabling excellence cognitive skills (better analysis and excellent decision making) – based on accurate information and knowledge. It is about continuously challenging the current priorities and principles for IT strategic management – in fast pace. It is all about going beyond IT strategy and actually being an integrated part in business with focus on value creation.
My recommendation is to consider how fast your IT organization reacts to change in the market. If Google would launch a new IT service today competing with your current offerings, how fast can you respond to the new competition? If you react slower than 9 months – your will most likely not survive the new rules of digitalization. Game over! This might seem like a odd experiment but actually provides a good stress test of your IT organization. It will indicate whether you are prepared for digitalization or not.
- Do the Digital stress test and question what is the root cause for the fast/slow response time. What is the impact of the slow response time? What does this mean for other areas of IT – for example sourcing, operations, development?
- Start questioning the traditions methods for IT Strategic Planning and Follow-up. Today, it is all about fast reaction, cognitive abilities and knowledge management. Do you have the right capabilities for survival in the digital era?
- Contact Hans Gillior at Sofigate. We are experts on agile IT strategic planning and ensuring optimal business value creation over time.
Summer is here. It is a time where many IT organizations develop an IT strategy for the coming year to define how to deliver value to business. The fact is that the traditional approach to IT strategy and steering is old and not adjusted for digital markets. The IT strategy will, with all certainty, be invalid when launched – meaning that a majority of 2017 will be run in complete darkness. We need a new approach! We need to open our eyes during the year! We need to change to survive another year of digitalization.
Hans Gillior – Senior Advisor and Digital Evangelist (Sofigate)