In my interactions with CIOs in the last few years, I found that ‘strategic planning for IT’ is a practice which is a much less prevalent than what it should be. CIOs apparently have well-run programs in their companies; but on further enquiry, it transpires that many of them do not have their plans laid down on paper and nor do they have those shared with their managements.

If a plan is not clearly spelt out, it will remain unauthentic and not understood by others. In fact, people may even suspect whether such a plan exists. It is therefore important for any strategic plan to be laid down and articulated so that main stakeholders understand and are able to contribute to its fine tuning and its subsequent implementation.

IT plan Vs. IT strategy

Though IT strategy is a very familiar term it is still not understood clearly by many. Many tend to confuse it with the IT plan and hence claim to be on track. There is no disputing the fact that they have good IT plans and some may be running their programs efficiently, but they still do not carry the strategic element in it. In fact, many of the IT plans are really budgeting exercises for the year which list out the investments / expenses and the projects planned. CIOs therefore live from year to year and plan their activities based on user demand and technology additions / upgrades that they chalk out. They lack a discernible direction.

Let me define the subject in simple terms. IT strategy is an IT plan which has a definite direction and purpose. What differentiates an IT strategy from an IT plan is the purpose it serves. IT strategy is not a standalone plan but one which is in sync with the organization’s plans. Therefore the first step for the CIO is to understand the business the company is in, the market that it operates in, the competitors, business challenges, company’s inherent strengths, strategic direction, business priorities, and targets set. Once he gets that straight, he can make plans for IT to address these business issues with the same set of priorities. Obviously, IT strategy will require inputs from business and the final plan drawn up has to be vetted out by various wings of the organization.

Is there a methodology?

Yes, there are many. Management and IT consultants do help organizations and have developed their own sets of methods and practices. However, the CIO himself can adhere to simple principles of needs-discovery if he has the required capability. He has to hold discussions with the CEO, business heads, and other stakeholders besides visiting various company locations, the markets and even meeting business partners to understand the business imperatives and possible solutions. Once having compiled his findings, he could discuss it with technology-partners and seek solutions. He has to be receptive and be in a learning mode.

In case the CIO feels he does not have the requisite skills, he should muster courage to admit his inability to carry out the exercise himself. He should in such cases seek external assistance for help in making a comprehensive plan. It is better to have a good plan even though with external help rather than dishing out a poor plan claiming solo effort.

What holds him back?

Some CIOs fight shy of asking about strategy, feeling that they may get exposed for ignorance. They are sometimes at crossroads not knowing whether to seek consulting help (a lingering fear that they may get an adverse reaction of management) or do it in-house so that they could impress the management and claim saving money for the organization. Unfortunately, none of these tricks work in the long run, it is best to deal with these matters head-on and take hard decisions for the good of the organization.

Teaching experience
I have been associated with management institutions and been teaching students through guest lectures and some semester courses as well. The experience has been rewarding as I learn when preparing for the lecture and then through interaction with the students who raise questions. Earlier this week I had the opportunity to take a guest lecture for students of an Executive MBA program, on the topic ‘Strategic Management of IT’. The students were executives from various companies with experiences ranging from 3 years to 10 years and most of them had an IT background wanting to give fillip to their careers. The learned professor explained to me before the session about the topics that the students had been taught so far. They had covered elements of IT planning, their alignment with business, about enterprise systems and the need to justify IT investments to the management. The professor told me that the students would like to know how it really works in the corporate sector and feIt that I can tell them based on my experiences with the corporate sector.

I started my lecture telling them how a simple IT plan differs from strategic plan and how it is important to know and understand business, its strategies, goals and priorities before embarking on any planning of IT and its management thereafter. Sensing their curiosity I explained the various aspects of business that the CIO should study, ask for and understand. I then proceeded explaining how I went about planning and managing IT in three different organizations that I worked with and presented a case study of one of my projects. This was absorbed well and people sat through the class without showing signs of strain.

Interaction with students
Students were bright and quite inquisitive and raised several questions during the sessions. They asked me about my interaction with the managements and about relationship with the CEOs that I reported to. They wanted to know why some plans fail and why some plans go through and falter later. A student even asked me why I had only presented cases where I succeeded but not about organizations where my plan did not work. That was a tricky question and therefore I had to explain about the organization environment and the attitude of the managements which were not supportive.

They were also interested in understanding the roadblocks and people management issues that I had faced when implementing plans. There were also questions on justification of investment and the ‘ROI’ factor and how to tide over them. I was really impressed with the group and their enthusiasm to know and understand. I complemented them and expressed hope that they would be apply what they had learnt that day. For me, they were a bunch of good CIOs in the making.

Developing IT personnel for CIO position
In my interaction with a host of CIOs, I see many of them a bit dissatisfied with their situation. Though they put in sincere efforts in their work, they are sometimes not able to make their mark. They find something missing and wonder why they are not able to get the management on their side. While other avenues could be available, education is one of them. If they could learn various aspects of management they would be better armed when speaking to their seniors. I wish more of our young CIOs and other senior IT staff members consider joining management courses and get equipped to make a difference in their organizations.

Let me, therefore, initiate a discussion on corporate strategy―our need to know and understand where the company is headed to―and the alignment of IT with the corporate strategic goals (IT plans that seek to serve the organization’s strategy).

Understanding business strategy

Business strategy is the direction that a company adopts over the long-term, a move which provides advantage to the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.

In other words, we have to first enquire, research and understand the company strategy by raising the following questions:

* Where is the business trying to get to in the long term? (The direction).

* Which are the markets / segments that the company is trying to compete in and what kind of activities are involved in such markets? (Markets and scope).

* What are the set of activities that business plans to take up in order to perform better than the competition in those markets? (Competitive advantage).

* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (Strategic resources).

* What external, environmental factors affect the businesses’ ability to compete? (Environment/ changes).

* What are the values and expectations of those who have power in and around the business? (Stakeholders).

Types of business strategies

Strategies exist at several levels in any organisation – ranging from the overall business (or group of businesses) through to individuals working in it.

* Corporate strategy is concerned with the overall purpose and scope of the business to meet stakeholder expectations.

* Business unit strategy is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

* Operational strategy is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

Once the CIO understands these imperatives, it becomes easy for him to look at IT from the management’s point of view and shape IT offerings in such a way as to help the company win in the markets.

IT strategy

If the IT strategy is to be aligned with business strategy, it will have to reflect steps that help achieve organisations defined priorities and goals. The IT strategy document, many a time, is worked out jointly by CIO and some business heads.

Following are some of the elements of an IT strategy:

(1) Key business imperatives: A report on the main business issues that are sought to be addressed. For example, it could state matters like manufacturing strategy (production planning optimization, material availability, lower manufacturing costs), finance (cost control, lower working capital, budget control etc.), or marketing and sales (order fulfilment, customer complaints re-addressal, marketing and sales analytics, etc).

(2) Priority listing: Some issues may be more critical than others and therefore the ranking of the applications in the order of their importance.

(3) Time frame: Drawing out a broad time frame for their implementation.

(4) Assessment: A scan of the technology environment and a clear technology direction that is most appropriate for the company given the set of business requirements specified.

This may include:

a. The hardware landscape: This may include aspects such as movement towards consolidation of servers and storage, moving towards virtualization, building reliability, etc.

b. Software choices: Of moving in the direction of standard packages, putting in analytics, other specialized packages necessary.

c. Safety and security: Defining requirements and overall policy direction, indicating levels of protection necessary etc.

d. Outsourcing policy: Defining a direction either in the form of strategic outsourcing or selective outsourcing.

e. Taking stock: Resources necessary in the form of funds, people, training etc. for achieving the defined objectives.

(5) A set of deliverables and standards in the form of key performance indicators which would help in drive performance and ensuring that implementation stays on course.

IT strategy is usually drawn out for a period of five years or for a period that the organisation thinks is appropriate.

The IT strategy document, however, is not static and would undergo a change if there is change in organisations strategies and goals or when technology advancements cause a change in the directions we took earlier. This makes IT an integral part of business and can play an important role in making business successful.