Reader ROI
- Understand why it's a mistake to ignore strategic planning
- Learn what not to do when writing a strategic plan - and why
- Discover the ways some CIOs are aligning business plans with IT strategic plans
If the best-laid plans oft go astray, can we expect any better of plans that try to predict a company's growth, competitive landscape, work processes and technology requirements three to five years from now? Those are the ambitious goals of IT strategic plans - plans that are frequently threatened with obsolescence by technology changes and economic upheaval before the ink even dries.
Many CIOs apparently have responded to those forces of chaos by throwing in the towel on strategic planning: a 2002 Cutter Consortium survey found that 39 per cent of respondents had no formal IT strategy at all. But in fact, chaotic times make it more necessary than ever for the CIO to routinely take a strategic view. "Everything's been stable and good here, but we realised that we'd been putting off a lot of major [IT] decisions. You have to avoid major [problems] by looking ahead," says Malcolm Fields, CIO of Iowa-based Hon Industries, a $US1.8 billion office furniture and hearth products manufacturer. Fields, Hon's first CIO, is in the midst of writing his company's first-ever IT strategic plan. Prior to his appointment, he says, "we just never had anyone far enough out of the trees to see the forest".
It's the looking ahead part that makes planning strategic. All IT strategic-planning primers start with the same instruction: imagine the desired future state of the company. With that vision, CIOs can then analyse the present state, compare the two to identify gaps, and start to draw a road map for closing those gaps and getting the company to the goal. Project prioritisation, risk analysis, and an analysis of the likelihood of changes in the industry and technology are also well-established basics in the strategic-planning process. However, that simple-sounding recipe masks some of the complexities and finer points of the strategic-planning process. What follows is a list of five common errors in the IT strategic-planning process, and tips from CIOs on evading those land mines and creating a plan that works.
1. DON'T Start with the Business Plan - (DO Start before the Business Plan)
The first direction typically parcelled out for writing an IT strategic plan is to start with the business plan. Here's a bit of heresy: "Start with the business plan" is misleading advice for two reasons.
First, he who waits for the business plan to hit his desk is starting too late. In fact, that CIO may never get started at all - in the aforementioned study by Cutter Consortium, almost a third of the respondents had no formally articulated business plan at all. But even at organisations that do formal business-strategy planning, the CIO needs to participate in the creation of that plan rather than waiting for it. CIOs play a crucial role in counselling executive leaders about new business possibilities opened by technology - a classic example being the new business channel opened by the emergence of the Web. If the CIO doesn't fill the function of advanced technology scout, the competitors' CIO will, giving the competition a huge advantage. "Historically, strategic planning for the CIO has meant discerning the business's strategy and then trying to achieve it. Today I think [the CIO's role] cannot be reactive," says Darrell Rigby, a director at consultancy Bain & Company. "The CIO has the capability to see where the basis for competition will be." That is not to say that CIOs should write their IT strategy independently and then attempt to force the business strategy to match it. Rather, the point is that both the business plan and the IT plan should be written collaboratively by the entire executive team, including the CIO.
The second problem with the "start with the business plan" mantra is that even formal business plans are often incomplete for IT purposes. Business strategies are typically written at a very high level. They frequently talk about markets, sales and distribution channels, and growth targets - but rarely address how the company gets its work done. Business processes - that's a place where IT can drive vital change and add enormous value.
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