CIO Basics - IT Strategy

INDIA: Congratulations! You've just been promoted as CIO for our company. Welcome to our organization, as senior vice president, we are pleased to offer you the role of the CIO. Do these statements sound familiar or are you aspiring to hear these words in your next role? Whatever the case, expectations and accountability jump many fold because the buck stops with you and you become the face of IT. With that comes your biggest responsibility and your existence depends on it - how will IT help the business win?

Most CIOs recognize that IT strategy is one of their key tasks yet while many believe they have effective IT operations, few would claim to have great IT strategies. So let's understand IT strategy and what can you do as a CIO to crack it.

What is an IT Strategy?

An IT strategy is ‘something' that allows IT to connect with business partners and stakeholders in a language that ‘they' understand. The business does not care what technologies, processes and resources are put in place to meet their goals and targets. However they do care about the investments they have to put in IT and the timeframe for expected returns.

IT strategy can be easy to understand if you visualize it as made up of three blocks: The demand section clarifies the business context, how the business will win, what business capabilities are needed and how IT will contribute to that success.

The control section outlines the mechanisms for making the strategy come to life, including principles, governance, financial management and metrics. The supply section details which services will and will not be provided, how the enterprise architecture will migrate to support the required business capabilities, human capital aspects the strategic approach to sourcing. The difference between strategy and operations that former is about doing the right things whilst latter is about doing things right. Also, IT strategy should be thought of as an integral part of business strategy-just like manufacturing, HR, finance and other functional, process and business unit strategies.

CIOs and business stakeholders are sometimes cynical about strategy, often because business strategies are unwritten or too high-level to be useful. They may have also found previous IT strategies too supply-side focused, too long to read, or constructed by external consultants, without buy-in. Specific review triggers then can be a business or IT turnaround, an enterprise transformation, a new business model, and mergers and acquisitions.

Defining the purpose and scope of IT strategy

Here, the main questions break down into four categories.

• Who are you addressing? Identify the primary target of the strategy, the other key stakeholders and their roles. 
• Why is it required?
• What will it address?
• How will it connect with stakeholders? Time factor and how will the process dovetail with enterprise-wide planning, budgeting, etc 

Supporting documentation required to complement the IT strategy

A good basis for all IT strategy communications which usually comprise a set of four documents: Summary document for the board: Used to give the "elevator pitch" of the IT strategy, it typically consists of a one-or two-page PowerPoint presentation with four components: how the business will win, including capabilities needed; how IT will contribute to business success; implications for the supply side of IT; and financial implications.

The IT strategy document itself: The main body of this should be 15-to-20 pages at most-the shorter the better. This document sets the strategic direction for IT's contribution to business success, without defining the detailed plan.

The IT strategic plan: All major initiatives to be executed by the IT organization in growing or transforming the business will be outlined in this detailed plan. The level of details would be high for the short-term planning horizon (12-to-18 months), with high-level vision for the medium-and long-term planning horizons (three-to-five years or longer).

 

The IT operating plan: This would be a detailed plan to address the run-the business part of IT for the short term, typically documenting assets of the organization and success metrics for running them.

Completing the IT strategy

An IT strategy is not complete if it doesn't have a strong executive summary. Assumptions are an important mention that needs to be clearly laid out because you may not have all the information at the time of creating your IT strategy. Also, be very clear about the business impact of each risk.

Remember, there is no one size fits all. You have to customize what works best for you and one tip that works well is to do a counterstrategy test that involves checking that every major statement or concept in your IT strategy has a valid alternative and modifying or removing those that fail the test. Applying this test makes IT strategies briefer, more meaningful and more actionable. Remember, as a CIO you not only need to have deep knowledge of the business and its intended direction but lasting relationships at the CxO level. It is ultimately for them that you are captaining your ship and making the business win and taking business-IT partnership to a new level. Good luck and all the best for creating your IT strategy.

(Heminder Ahluwalia is Executive Partner with the Gartner Executive Program. The ideas and views expressed in this article are those of the author and do not necessarily represent the views of CyberMedia)