The Importance of IT Strategy Planning
In order to succeed in a progressive, competitive world, every business needs a long-term strategy that aids with the fulfillment of its corporate goals and acts as a map to direct all tactical, daily workflows towards an overall objective. Such a map, or blueprint, that details the long-term goals of the organization, is a strategic plan. That said, in modern businesses, the Information Technology infrastructure has become a core, foundational set of systems within all global industries which can be used strategically to fulfill all corporate goals. Technology infrastructures encompass several hardware, software, enterprise, and network systems working in concert with one another in order to facilitate the completion of business workflows with optimal efficiency. Essentially, IT systems are used in enterprises in order to increase efficiency, support corporate workflows, enable automation, decrease overhead, and to optimize operational productivity.
Historically, Information Technology has radically transformed how businesses operated, and eventually revolutionized virtually every department in any given organization. With the advent of the World Wide Web, Social Media, and Email systems, businesses were able to reach customers (e.g. Inbound Marketing) and communicate with clients in a new way, which helped enterprises to launch new products and services. With the advent of tablets and smartphones, businesses were able to leverage mobile applications in order to stay connected, communicate on a new level, and utilize apps in order to increase and expand their business. Additionally, with the creation of enterprise software, businesses were able to leverage applications, such as Enterprise Resource Planning and Customer Relationship Management software, in order to consolidate their business data and conduct most major business operations (e.g. operational workflows, communications, marketing, etc.) from a smaller set of powerful applications. Today, the invention of novel technological systems, such as Blockchain technology, the Internet of Things, Cloud technology, Big Data/Business Intelligence, and Artificial Intelligence allows businesses to operate in an even more efficient, novel manner, which can alter the direction of operational workflows and define a new direction to the fulfillment of the overall corporate mission.
Historically, IT systems helped businesses with two major goals: to fulfill their current business objectives – in order to support their business model – and to innovate, which usually equated with either forging novel products and services, or having the ability to operate the business in a new (better) way. That said, technology has typically fulfilled the above goals in one of two ways – tactically or strategically. Before the modern, strategic deployment of IT infrastructures became widespread, IT systems were used mainly to solve problems as they arose – tactically – and to decrease overhead when possible. This equated with information technology systems being relegated to the background, while such systems – and the personnel associated with them – were utilized for support, without being a core part of business operations and/or business strategy. However, as IT systems became a larger, more significant part of business infrastructures – and the ability to leverage such systems for the fulfillment of long-term corporate goals increased – business strategic planning started to include details of the corporate IT infrastructure as significant elements of the enterprise’s long-term, overall strategy.
Thus, IT strategic planning has become a critical aspect of any enterprise’s long-term strategy, as IT systems are no longer used to simply solve problems as they arise (tactically), but are now used as foundational elements of an enterprise’s overall strategy. That is, IT systems are at the forefront of thought when corporate executives draft the enterprise’s business strategy, as the organization’s strategy is often written specifically with relation to what the enterprise’s IT infrastructure can do to fulfill the ultimate goals of the organization. To that end, according to a study, as reported by the Global Intelligence for the CIO, 60 percent of Chief Information Officers sit in – or have access to – boardroom meetings. To be specific, 66 percent of 4,500 IT professionals indicated that they have sat in a boardroom meeting in the past quarter. Additionally, according to the report, 84 percent of CIOs have responsibilities outside of the realm of traditional IT (Harvey Nash/KPMG). Essentially, IT systems and data are now driving business strategies and long-term business plans – due to the power that IT systems can provide to aid in corporate goal fulfillment – and are no longer systems that are used simply to tactically solve issues as they arise.
Utilizing IT as a core factor of an organization’s strategic plan allows an enterprise to leverage advanced IT systems in order to fulfill corporate goals in a more feasible manner, while increasing the overall bottom line. Thus in order to utilize IT systems in an advantageous manner for the fulfillment of long-term, enterprise goals, an IT strategic plan is needed as a guide or roadmap. Such a roadmap maximizes an enterprise’s Information Technology ROI (return on investment) by ensuring that all IT systems are used to meet the corporate goals, and ultimately, are sufficiently leveraged in order to increase the corporate bottom line in the most optimal way possible.
What is an IT Strategy?
An IT strategy is a comprehensive, in-depth document, that is typically crafted by CIOs or outside consultants, highlighting the role technology plays in the support, development, and growth of the enterprise, along with specifically detailing how each technological system is to be used to ensure that each objective of the organization is met over time. IT strategic plans should always be business-driven, not technology-driven, and should ultimately result in bettering the bottom line of the business. Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) – along with Chief Financial Officers (CFOs), Chief Operational Officers (COOs), the Chief Executive Officer (CEO), and other C-level executives – are usually involved in the process of creating and approving an organization’s IT strategy.
Due to the evolving nature of technology – and the dynamic abilities of advanced IT systems that can be leveraged in order to better an enterprise’s bottom line – IT strategies are typically drafted with scalability and flexibility in mind, while still ensuring that the growth of the business, and the fulfillment of core business objectives, are completed in a way that increases daily (tactical) operational efficiency and productivity.
It is important to note that an enterprise’s IT strategic plan is different from – but must align with – the overarching company business strategy. While the enterprise’s business strategy is a general roadmap detailing the direction that the company is to ultimately take – and how to get there – an IT strategy details how the IT infrastructure can be used to help the business fulfill its objectives and how each IT system can be used to ensure that the business follows the direction that has been decided. Essentially, if a business strategy can be likened to a map with a destination, then the IT strategy can often be likened to the details of how the vehicle (IT systems) can be used to get to the destination.
What Topics Are Covered Within an IT Strategy?
An IT strategic plan must be crafted to work with the overall business strategy of an organization. Thus, it must take into account several elements of a company’s operational infrastructure, including products/services, financial margins and estimates, marketing and sales methodologies, strategic differentiator utilization, etc. Since technology can be leveraged to optimize the workflows of almost every department in an enterprise, an IT strategic plan includes topics that are both technical and non-technical, including:
- Technology management
- Cost management
- Human capital management
- Hardware and software management
- Vendor management
- Risk management
Additionally, an IT strategy should cover common business themes, such as an overarching strategy statement, opportunity costs, possible innovations, project timelines, high-level project justifications, projects costs, etc.
A Strategy Statement
A strategy statement is a concrete summary of the organization’s strategy that helps to establish the ultimate direction of the organization, its goals and primary objectives, and critical roles that different personnel are to fulfill in order to achieve the enterprise’s core goals. The strategy statement of an IT strategic plan should include directives that help to keep the organization’s use of IT systems focused on the ultimate long-term objectives of the company, and should summarize how the IT infrastructure will be utilized to optimize all company operations. Ultimately, a strategy statement should include three major themes:
- Objective: The IT strategy statement should succinctly define the overarching, long-term goals that the enterprise seeks to accomplish over a set period of time.
- Scope: The strategy statement should also detail the specific scale of company operations, and the niche – or domain – in which the company seeks to operate, which helps to establish marketing demographics and the company’s regional, national, and/or international competition.
- Competitive Advantage: The strategy statement should likewise describe how IT can be used to allow the company to have a strategic and tactical advantage over its competition, including the utilization and leveraging of IT systems to create strategic differentiators, etc.
A Prioritized List of Improvement Opportunities
An IT strategic plan should always go beyond describing the financial investments associated with the procurement of IT systems, and/or the simple listing of advantageous IT system implementations. The IT strategic plan should detail how technology will be leveraged to support and optimize all corporate initiatives, and how the IT infrastructure will be utilized to improve business opportunities. In order to ensure that each IT system will produce a positive ROI, the IT strategy should outline and detail how each corporate IT system is utilized for the optimization of all projects and initiatives. Additionally, each initiative should align specifically with the larger corporate strategy, in order to fulfill the long-term business objectives.
A Timeline of the Initiatives and Projects
A thorough IT strategy should also detail an estimated timeline for each critical initiative or project. When it comes to detailing the use of IT systems for the optimization and completion of such projects, it is important to create a flexible plan that takes into account the quickly-changing global ecosystem of IT applications, and the evolution of advanced IT systems that can impact projects in the future. For instance, an IT strategy can include the utilization of Cloud computing, Enterprise Software and Big Data analysis in conjunction with critical business projects over time, while being written to include possible future technologies such as advanced Artificial Intelligence (working in concert with Big Data analysis), and Internet of Things concepts. Finally, an IT strategy should be used as a roadmap for how each IT system plays a fundamental part in the fulfillment of critical business initiatives over time.
High-Level Justifications for Each Project
An IT strategy should also include an executive summary that details why each initiative/project needs to be completed, and how each project benefits the bottom line of the company while ultimately fulfilling the objectives of the enterprise. Along with such a summary, an IT strategy should include justifications for each IT infrastructure component, including how each IT component will work to increase the feasibility and optimization of each critical initiative. It is also important to note that such a high-level summary is often necessary to obtain funding, and to establish agreements with shareholders, etc.
The Estimated Cost and Duration for Each Project
In the same way that an IT strategy should include a summary of all critical business initiatives and projects (along with the associated timelines), such an strategic plan should also include estimated costs and durations for each project. This is especially important with regard to the use of IT systems which are critical financial investments that should aid the completion of all core business projects. In light of this, an IT strategy should always indicate the costs of IT system use for each project – which should include installation, maintenance, management, security, and possible upgrades – while being flexible enough to allow room for an increased budget and/or timeline.
An Owner for Each Project
A project owner defines the scope of the project, and is the strategic “manager” of the initiative. This is in contrast with a project manager, who defines (on a daily basis) how processes and workflows will tactically be completed. Each IT strategy should always represent a focused roadmap detailing the specific direction that every project will take in order to fulfill the company’s core goals. This includes detailing the project manager and project owner for each critical business initiative, which should also include how the IT infrastructure will be leveraged in order to aid the project owner with his/her role.
Why You Need a Formal IT Strategic Plan
An IT strategic plan ensures that all facets of an enterprise are focused and working towards critical long-term objectives, and that IT systems are being leveraged in the most optimal manner possible, in order to help the organization meet those goals. Ultimately, an IT strategic plan acts as an operational, financial, and business blueprint for long-term, corporate success.
Drives Alignment Between IT Investments and Business Priorities
An IT strategy is important as a document outlining an enterprise’s critical priorities, how they align with the IT infrastructure, and thus how each planned initiative – and associated IT component – is pertinent with relation to the investments that will go into each IT system. An IT strategic plan is critical in helping executives prioritize projects, initiatives, goals, finances, resources, overhead, and associated IT component utilization.
Optimizes IT Investments by Avoiding Duplicative and/or Inappropriate Solutions
Since an IT strategic plan helps company executives to see the bigger picture of long-term goal fulfillment – and how IT systems can aid in getting there – investments and overhead can be focused on the exact IT components that are pertinent and necessary for goal fulfillment. An IT strategy not only helps to keep a company focused, but also ensures that the ROI on all IT components is maximized, and that the IT infrastructure is composed only of the necessary elements associated with the fulfillment of a company’s particular goals.
Makes it Easier to Get Funding
Since many stakeholders are involved in the funding and implementing parts of a plan, getting their buy-in is essential. The best way to obtain buy-in is to include them in the development process (of the business plan and IT strategic plan) as much as possible. Ultimately, an IT strategic plan can aid with the attainment of funding by detailing why each IT component of the IT infrastructure is needed – and how each IT system will help the organization increase their bottom line by tactically and strategically fulfilling the enterprise’s objectives in the long term – and by ensuring that the ROI on each IT component is maximized.
Planning Makes Execution Easier and Faster
Due to the fact that an IT strategy operates as a blueprint for the fulfillment of long-term goals, such a strategic plan keeps a business – and its personnel – focused. When the employees of an organization understand how each workflow ultimately aids in the accomplishing of business objectives – and, thus, everyone is on the same page – initiatives, projects, and daily workflows often operate in a more streamlined, faster, and more efficient manner.
Effectively Allocate Resources to Reach Goals
By revisiting an IT strategy on a routine basis, company executives can not only see the bigger picture, but can recognize how to allocate IT resources in the most effective manner and in a way that allows the company to fulfill its goals. This is because an IT strategy presents a roadmap to the fulfillment of an enterprise’s objectives, and how IT systems can help with overall company success. Thus, by comparing priorities and analyzing objectives, executives can effectively manage the company IT infrastructure in order to optimally increase corporate workflows, which is largely done by minimizing overhead and correctly allocating resources according to the overarching roadmap/blueprint (the IT strategic plan).
Additionally, an IT strategy allows functional executives to be strategic when they request new or improved technology. They can use their functional strategies to begin working with IT leadership to determine which types of technology projects will be required to achieve their goals.
You’re Able to Define Roles and Responsibilities Up Front
An IT strategy defines not only the path that a business will take – and how the IT infrastructure can help the business get there – but also helps to define the projects that will be feasible for the company while on that path. Along with that, the roles associated with such projects – which are associated with critical IT infrastructure components – should be detailed in the strategic plan, which helps to reveal the general responsibilities of core business and technical personnel. Such a plan outlines core business duties and positions, which ultimately helps to keep everyone on the same page and going in the right direction.
Makes it Easier to Identify Areas for Automation
An IT strategic plans looks at the end-goal from the beginning. With such insight into the ultimate direction that a company wishes to take, it is easier to see how IT systems can be leveraged in order to increase automation, productivity, and efficiency throughout the timeline of an enterprise’s projects. Thus, for instance, business executives might recognize an opportunity to utilize financial automation software for certain business workflows, which can save overhead and increase the company bottom line. This ability to foresee opportunities is a crucial advantage that results from the crafting of a comprehensive, detailed IT strategy.
Improved Collaboration
A clear IT strategic plan not only defines roles and duties, but in doing so, it allows an enterprise’s IT department to act strategically when making investment decisions and managing projects. Such a plan also helps the IT department to work in an optimal manner with other departments, since everyone understands their role. Additionally, a thorough, succinct IT strategy makes securing buy-ins from business leadership a more structured process, which, in turn, makes it easier to earn buy-ins from business users. An IT strategic plan is also an important document that allows IT managers to feasibly negotiate more effectively with leaders or staff who request new projects or initiatives that require significant, non-operating effort.
It Tells People “Why”
Strategies spell out why the projects they are working on are important and, as things in the plan move or are re-prioritized, it forces the leaders to explain why and how those priorities are shifting. In fact, perhaps one of the most important reasons why an IT strategy is a critical part of any business is that having an in-depth understanding of an enterprise’s IT infrastructure – and what it can do – can help to mold the overarching business strategy. That is, the projects and initiatives that will form the bulk of the company’s critical operations (in order to fulfill its major goals) may be decided with relation to the company’s IT infrastructure, and how such IT systems will make the projects possible when they are optimally leveraged according to the IT strategy.
Strategies spell out why the projects they are working on are important and, as things in the plan move or are re-prioritized, it forces the leaders to explain why and how those priorities are shifting. In fact, perhaps one of the most important reasons why an IT strategy is a critical part of any business is that having an in-depth understanding of an enterprise’s IT infrastructure – and what it can do – can help to mold the overarching business strategy. That is, the projects and initiatives that will form the bulk of the company’s critical operations (in order to fulfill its major goals) may be decided with relation to the company’s IT infrastructure, and how such IT systems will make the projects possible when they are optimally leveraged according to the IT strategy.
The Bottom Line
A business-driven IT strategic plan is crucial to the success of modern businesses. An IT strategy allows a business to pinpoint the exact objectives associated with a company’s overarching business model, and how each element of an enterprise’s IT infrastructure can be used to achieve those goals. Since novel and advanced IT systems give businesses the ability to optimize workflows and increase operational efficiency – along with managing, producing and maintaining novel products/services – in unprecedented ways, the strategic use of such systems can greatly aid a business in increasing its bottom line, while such a strategic plan is necessary to maximize the ROI on all Information Technology systems. Additionally, the power of the IT infrastructure can be used to determine which projects and initiatives are feasible with regard to the business strategy, and the overall corporate path to goal fulfillment. Ensuring that the enterprise’s IT infrastructure is being used efficiently in order to positively affect the bottom line – and is not being relegated to tactical, support-based use – is important to maintain revenue and ensure growth over time. A strategic plan also helps to align all IT system use with the overall goals of the organization. Ultimately, a strategic plan ensures that each IT system is being used in the most optimal and practical manner possible, and that the IT infrastructure is operating as a revenue-generator and not just as a cost-center.
