Effective Strategic IT Planning
Most effective CIO strategy for effective strategic IT planning
About two decades ago, IT was considered by most corporations as an unnecessary expense that would, at best, reduce administrative costs in the long run. The impact that IT could have on process optimization and business development had not been thought of. However, by 2002, the contribution that IT could make to bottom line, revenue growth and attaining a competitive edge had been noted and acknowledged . Today, Enterprise Resource Planning or ERP solutions form an integral part of almost every business, small or big. Yet, despite widespread use of IT, implementation of organization wide changes can often prove to be disastrous if not planned and executed carefully, as was witnessed in the failed ERP implementations of Whirlpool and South Eastern Electronics . The role of Chief Information Officer or CIO has been developed overtime to shoulder the responsibility of planning, implementing, maintaining and updating of the enterprise IT architecture and infrastructure. Further, modern day CIOs play an integral role in the overall organizational strategy, often managing change and influencing operational and financial efficiency . Hence, a CIO needs to develop a comprehensive strategy that takes into consideration the bigger organizational objectives.
The Ideal CIO Strategy
CIOs generally face a set of common challenges when addressing the IT architecture needs of an organization. IT within an organization consists of various components including: a) Acquisition, b) policy and strategic planning, c) performance and result based management, d) process improvement, e) capital planning and investment, f) architecture and infrastructure, g) project management, h) technology assessment, i) information security, and j) E-commerce . An organization undergoes three different levels of IT integration. These levels are: 1) the organization considers IT to be a cost with minimal benefits. The CIO position either does not exist, or, where it does exist, only entails maintaining existing basic IT set up which would typically include internet, email and telephone, 2) IT plays a greater role in the organization but is still not considered as part of the overall business strategy, and 3) IT is integrated into the organizational strategy and operations. A CIO working in a Level 1 organization will be charged with responsibility to bringing it up to Level 3. Table 1 shows the basic strategic framework for IT through the three levels:
Table 1: Basic Strategic Framework
At Level 1, the CIO will need to set short term as well as long term goals that will take the organizational perception of IT as a cost to IT being a strategic asset. Short term strategies would include:
a) To begin with, the CIO would need to identify external as well as internal customers that the organization’s IT caters to. The objectives and goals of these stakeholders, including the overall organizational objectives, form the basic criteria of achievement for IT. The needs thus identified need to be understood and documented as all current and future IT initiatives will need to be aligned with these guidelines. Further, the CIO can enhance communication of IT achievements pertaining to the individual goals of the customers so as to build trust in IT as a strategic partner.
b) The CIO should then evaluate the IT products and services being currently offered to customers and stakeholders. Again, this information, as well as details of processes, will need to be documented. A comparison between this data and the list of customer objectives will reveal the gaps in IT that need to be addressed.
c) Based on the cost implications, the complexity in implementation and the business benefit, the gaps should be prioritized and strategic plans developed to address them. At this point, the CIO should be careful to avoid the ‘Scope Creep’, where poor planning can lead to projects getting delayed as well as going off the budget .
d) Finally, the CIO will need to bring the competency levels of staff up to the requirements of developments in organizational IT. This would involve an assessment of currently existing skill sets and filling the gaps through training, knowledge sharing and collaboration.
Once these short term goals have been attained, the CIO will have started the shift in the organization from Level 1 to Level 3 of IT integration. In the long term, the following strategues should be implemented:
a) Evaluation of the IT portfolio: Once the IT services being offered have been documented, the CIO needs to evaluate whether a given offering: a) adheres to the organization’s overall objectives, b) follows the procedures and policies defined, c) caters to identified customers, d) has a defined SLA, and e) has had its scope, quality, cost and schedule measured. The benefit and business gain of each offering should be noted so that its importance to the organization may be known.
b) Due diligence: Duplication of effort and processes should be eliminated through the evaluation of alternate solutions. Using the IT portfolio analysis developed, the CIO will be able to accurately compare existing services, products and processes to alternatives as well as evaluate the need for upgrading, saving time, effort, cost and man power for the organization.
c) Gaining trust: By efficiently offering basic, functional, network as well as enterprise IT solutions, the CIO will be able to cater to all the objective and goals of internal as well as external customers and stakeholders, driving organizational performance. Through effective communication, the link between IT management and organizational performance can be communicated to customers, hence, building trust in IT as a strategic partner.
Every CIO will have a unique set of organizational challenges that need to be addressed in order to effectively manage IT. However, through the identification of organizational and customer goals, development of current IT offerings and acquisition of new infrastructure to align IT to these goals, and boosting organizational performance and business gains in the process will allow the CIO to change the perception of IT being a cost to being a strategic partner.
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