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Thursday

What’s Wrong with IT Strategy

By definition, every organization has an IT Strategy – some have it clearly articulated and the others are working to one without knowing it. The question is: Is the IT Strategy producing results? One can also ask the same question a different way: What must one do to make IT Strategy produce results? Or, perhaps, what is wrong with this IT Strategy? The strength of an IT Strategy does not come from it being articulated. It lies along its entire lifecycle – from the vision to the underlying policies, framework, process design, including management and control mechanisms, and execution. Each of them must be carefully thought through and designed. Vision, principles and policies set the direction for an IT Strategy. They are the first step to designing and defining an IT Strategy but, more importantly, they reflect the stakeholders’ beliefs. It is critical that the strategy evolve from these beliefs, otherwise execution will be “half hearted”. It is also absolutely essential to realize that “stakeholders” include both the designers and the executers of this strategy. A framework provides structure to IT Strategy. It enables rapid, repeatable results by ensuring that we have a complete “picture” and made the key connections. Frameworks might not guarantee success, but they sure help sustain and repeat it. Sometime, they can also salvage a floundering effort by identifying root cause of failure. Without a framework success or failure are a black box. More often than not, success comes from tinkering with an initial failure. Frameworks are invaluable in this tinkering. Sometimes we forget that IT Strategy is a process not a point in time event. Like any other process, IT Strategy process must also be designed and have an “owner”. It must also be integrated with other processes such as Budget, Portfolio Rationalization, Enterprise Architecture Planning and Systems Implementation. It must also be managed – monitored and controlled – using clearly defined metrics and mechanisms. Execution makes all the difference between success and failure of an IT Strategy. An IT Strategy might look good on paper. However, implementation is where the rubber meets the road and for the first time we know, for sure, if things are working as planned. As much as strategy drives execution, the reverse is also equally true. A good IT Strategy is one that is built factoring in “practical” considerations or execution “constraints”. Also, on an ongoing basis, real data from execution must be used to “fine tune” strategy. For the sake of brevity, we cannot delve into all that issues affecting IT Strategy. So let us look at 10 key reasons why IT Strategies fail to, well, sizzle: Show me the alignment? IT Strategy and alignment are such very nebulous terms that most people have difficulty defining them in a manner that is actionable. It is fine to say that an IT Strategy is going to align IT with business but it is another matter that most people cannot prove this alignment. Most CIOs cannot say for sure if their IT is aligned with business. Show me the value? Another area of concern is whether an IT Strategy will create verifiable and sustainable results. One of the reasons for business leaders’ dissatisfaction with IT in general, and IT Strategy in particular, is that one cannot verify results. We know that IT Alignment creates shareholder value. However, if one cannot verify alignment itself, they cannot expect to be taken seriously, when they claim, that it resulted in shareholder value creation. What is the ROI of NPV? It is hard to argue with Peter Drucker, when he says, “If you cannot measure it, you cannot manage it”. However, is measurement is not restricted to financial measures such as NPV. It is not synonymous with “dollar-denominated”. IT is different. Its value cannot be measured only through NPV or other financial measures. Its measure does not have to be dollar denominated. There are other, better, means of measuring IT Value. How does this decision impact IT Value? An IT Strategy is not an end in itself. Organizations’ need to keep it updated. For example, unanticipated events require a response that might not have been considered in the original strategy. It is critical to understand how these decisions, in response to these events, affect the IT Strategy. Also, how do they impact value creation originally identified? How does this business decision impact IT? Stuff happens. In a business, it happens frequently and, more often than not, without warning. Speed and agility of response, differentiate businesses that succeed. Quickly, one would like to know the impact of a business event on its IT. Also, how can IT help respond to them – efficiently and effectively. IT Strategy framework must, seamlessly, traverse the business and IT boundaries to quickly assess the impact of an event across the entire organization. It should allow for quick decision making in response to these events – by assessing the impact on of each decision on shareholder value. One big leap or baby steps? Success, often, is a multi step process, especially, in uncharted territory. Our response to an initial stumble, determines if it is a minor glitch or a decisive blow. A good framework, process with a feedback loop and metrics help in this endeavor. IT Strategy’s success is no different. Our first foray might result in some problems. We should be able to know when we have faltered; if it is a glitch or a blunder; quickly assess the reason for our stumble. We must also be able to quickly devise a response. Can I learn from my experience? The classic definition of insanity is: repeating the same steps expecting different results. Why do IT organizations behave insanely? Because most organizations do not spend the time to analyze, document, incorporate, disseminate or teach their “lessons learnt”. Best practices are not disseminated from one part of the organization to the other. Failures are hidden. New team members are not taught “what works” and “what doesn’t”. Processes are not modified to incorporate lessons learnt. Your “next” IT Strategy is bound to deliver the same results and this one – nothing less; nothing more Is this a steering committee or a team? Often, IT Strategy is delegated to a steering committee comprised of participants from different functions. Each participant brings excellent, relevant and complementary skills to the table. However, this is a great idea that fails during execution. A successful team must have clearly defined roles and responsibilities. Each member of the team must understand how the different pieces of the puzzle fit together. Each member must “deliver” something. Together, then, the team delivers results. Steering committees result in the right people showing up for all the right meetings. However, they do not focus on role definition. They also fail to assign responsibility for deliverables. More often than not, these committees turn into debating societies where a lot of good stuff is discussed but very little, if anything, of value is ever delivered. Who will lose their job if this fails? Accountability is critical to the success of an IT Strategy. One can create a very “good” IT Strategy that either stays on the shelf or fails miserably when executed. Till success or failure is linked to executive compensation and/or career, such strategies and/or failures will continue to occur. Are we in compliance? IT standards are a critical enabler of IT Strategy because they help lower cost of operations. Organizations invest in standards teams that take great pains in defining standards. Often, IT Strategy process is not linked to a compliance process. Hence, projects that do not adhere to technical standards get implemented. Thus a great IT Strategy results in higher than desirable cost of operations.This is by no means an exhaustive list. However, addressing these will take us many steps closer to the solution.

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