“To be frank, very few IT strategies have anything to do with a change agenda or business competitiveness. At its best, they are mainly a list of initiatives or fluffy visionary statements giving little guidance to where (and why) IT is going and how IT supports business competitiveness.”
We have just embarked on a new year to be dominated by increased digitalization and new competitive conditions – “new normal”. Change is moving faster and with higher magnitude than ever before challenging the culture and management of many organizations. In this complex business environment, many IT departments have just finalized drafting the IT strategy for 2015 (or ever longer) and are now planning its execution. But how good are these IT strategies? Do they actually support business to be successful in the “new normal”?
Let us start with the basics – what is an IT strategy? There are obviously many definitions – here is my definition:
Definition: a document describing the change agenda in the IT organization to optimize business value creation and competitiveness.
What is interesting about this definition is that it is based on a change agenda and business value creation. It therefore follows the same “rules” as any other change management journey. It is about motivating our employees to leave something comfortable and taking steps into the unknown with support of committed leaders. It is therefore important to describe and communicate the “burning platform” for change to encourage IT employees to dare to leave their comfort zone. Secondly, the IT strategy definition includes the “business value creation” statement that can be seen as a key IT objective or vision. Yes, IT has only one purpose and that is to support business success – nothing else!!! IT obviously need to understand the business expectations on IT and how basis for business competitiveness. How does business competitiveness influence IT’s role, governance structure, innovation and competence/leadership? These are important questions to ask in the strategic planning process and formulate in the strategic document.
Over the years, I have encountered numerous IT strategies of various quality and structure, and I have also been asked to review and evaluate these documents. To be frank, very few of the IT strategies have anything to do with change agenda or business competitiveness. At its best, they are mainly a list of initiatives or fluffy visionary statements giving little guidance to where IT is going and how IT supports business competitiveness.
When reviewing IT strategies, I ask myself the same five questions to determine how good the IT Strategy actually is. Let me share these questions with you:
- What is IT success – does the document support business competitiveness?
- What is the change agenda? Where are we gong and why?
- Does the IT Strategy boost IT employee engagement and motivation?
- Is it aligned to the rate of change in the industry? When change occurs – where in the IT strategy to change?
- What is the optimal investment roadmap? What is our primary investment scenario?
Let us go through these five questions one by one to understand how to interpret the questions in detail:
- In a year from now, business or senior management is going to evaluate how successful IT has been over the year. Did IT support business competitiveness or not? IT need already now in its IT Strategy document describe how it is going to deliver business competitiveness and how to prove its success. The more detailed and concrete the better. In this way, everybody knows and understands what is expected of the IT organization and the goal of their change journey. How are these goals communicated and displayed?
- Change is a natural part of any organization – especially in an unpredictable business environment. The IT Strategy need to set the fundament for change by describing why IT need to change (by environmental scanning and SWOT analysis), where IT is starting from and where IT is heading (the new IT role and conditions). Change is something many organizations and employees fear and reject – and therefore it is important to be firm on the reasons for change (burning platform) and painting a positive picture of change. Is the journey feasible?
- Motivate and engagement employees are key for survival in the new normal. However, research shows that only 14% of employees are engaged at work. Does the IT strategy describe anything about why their work is important or not? What does the IT strategy says to motivate IT employees? Is the IT Strategy easily communicated in simple language for everybody to understand? Here we need to focus on communication, gamification, self-governance and showing high level of trust and empathy for the employees.
- The IT organization needs to understand the new business competitive environment and how fast it is changing. In many industries, the rate of change is approximately 6-12 months but still IT continues with 3-5 year strategic planning. This means that IT delivers limited business value during a majority of the time. IT needs in the IT strategy structure and text relate to the rate of change and have adequate strategic planning horizon. What about sourcing contracts and strategies? Are these aligned as well?
- What is the best investment scenario going forward? There are thousands of investment scenarios given the set objectives, challenges, strategic themes and guiding principles (logical delivery) – but where to start? It is important to find the link between the investments itself and the IT/business challenges and IT/business objectives it is set to support. This a complex task and there must be some prioritization here for the coming year. My view is that the IT organization only can handle maximum 3-5 strategic initiatives with excellent delivery – so the question is which strategic initiatives to select? This must be described in someway in the document. (check ValueMiner concept)
I would say, very unscientific, that 90% of all IT Strategy do not pass 3 or more of these questions – making them “weak” IT strategies. The main reason is that many CIOs or other IT executives underestimate the importance of the IT strategy and take little time to understand what this document actually means and does. Often consultants are brought in to quickly develop the IT strategy with old IT strategy frameworks (optimized to sell consultants), limited understand of the business climate and the importance of change management in IT organizations. The result clear, IT organization underperforms and jeopardizes being totally re-organized in the coming years – and not invited to the corporate strategic discussions. That is dangerous scenario given that the main force for change in new normal is in IT.
- Before starting to execute your IT strategy and investing in numerous strategic initiatives, check if the IT strategy is fit for its purpose. Please check how many of the 5 questions (described above) it actually answers. If below 3, please start by reviewing the IT strategy.
- Contact The Goodwind Company, we do IT Strategy evaluations (see diagram below) and revisions based on the five strategic questions. It is a quick and cheap that will guarantee success in 2015.
Diagram 1: Example – IT Strategy evolution “summary page” template (The Goodwind Company, 2015)
It is said that strategy is 10% planning and 90% execution. Therefore it is necessary to prepare the IT strategy for the execution phase of the strategy work. To understand that an IT organization might have the best IT strategy in the world but if it cannot be executed and/or delivers no business value – it has no value! That is something to think about!