Developing your IT strategy should be based on a thoughtful, ongoing process. Too often, strategy is developed as a one time event (typically with consultants) or is a hurried episode following a corporate vision statement that has been handed down. A considered approach, where there is robust industry and technology trend analysis coupled with a two way dialogue on business strategy can yield much better results. I have mapped out below a best practice strategy process that I have leveraged in previous organizations that will ensure a strong connection with the business strategy, leverage of technology trends and clear cascade into effective goals and plans. With such a process in hand, the senior technology leader should be able to both drive a better IT strategy, and importantly, an improved business strategy.
The IT strategy process should start with two sets of research and analysis that interplay: a full review of the business strategy and a comprehensive survey of the key technology trends, opportunities and constraints. It is critical that the business strategy should drive the technology strategy but aspects of the business strategy can and should be driven by the technology. Utilize the technology trend analysis as well as the understanding of the key strengths and weaknesses of the current technology platform to as a feedback loop into the business strategy.
When working with the business, to help them hone their strategy, I recommend leveraging a corporate competency approach from The Discipline of Market Leaders by Michael Treacy and Fred Wisrsema. In essence, Treacy and Wisrsema state that companies that are market leaders do not try to be all things to all customers. Instead, market leaders recognize their competency either in product and innovation leadership, customer service and intimacy, or operational excellence. Good corporate examples of each would be 3M for product, Nordstrom for service, and FedEx for operational excellence. Thus your business strategy should not attempt to excel at all three areas but instead to leverage your area of strength and extend it further while maintaining acceptable performance elsewhere. This focus is particularly valuable when working to prioritize an overly broad and ambitious business strategy.
Below is a diagram that maps out this strategy process or cascade:
The process anticipates that the corporate strategy will drive multiple business unit strategies that IT will then support. It is appropriate to develop the business unit technology strategies that will operate in concert with both the business unit strategy and the corporate technology strategy. Once the strategies are established, it is then critical to define the technology roadmao for each business unit. The roadmap can be viewed as a snapshot of the critical technology capabilities and systems every 3 or 6 months for the next two years that provides a definitive plan of how the business unit’s technology will evolve and be delivered to meet the business requirements. These roadmaps should be tied into and should support an overall technology reference architecture for the corporation. This ensure that the technology roadmaps will work in concert with each other and enable critical corporate capabilities such as understanding the entire relationship with a customer across products and business units.
I recommend executing the full process on an annual basis, synchronous with the corporate planning cycle with quarterly updates to the roadmaps. It is also reasonable to update the the technology trends and business unit strategies on a six month basis with additional data and results.
What would you add to this strategic planning approach? Have you leveraged different approaches that worked well?
Best, Jim Ditmore