Monday, May 31, 2010
Posted by: Bill Schmidt & BJ Havlik
Businesses must develop a written Business Plan to succeed in today's competitive business environment. A Business Plan defines the strategies and tactics for the business and provides a roadmap to success.
The same concept also applies to your Information Technology (IT). If your business does not have a documented IT plan - or strategy, your technology investments are likely considered a necessary cost of doing business instead of an investment that provides optimum business value.
Developing an IT strategy is a vital requirement for any size business. An effective IT Strategy defines the technology, people and processes necessary to meet business requirements.
More importantly, an IT strategy directly connects IT services with business processes, providing a framework that enables effective metric-based technology decisions in support of business goals and objectives.
There are key elements IT must provide to recognize value from your business investment:
Align IT with business goals
Provide critical business functions at high quality
Deliver specified and measurable service levels
Provide recommended risk mitigation tactics
Maintain cost effectiveness.
Align IT with business goals. This is the most important element and becomes an impetus for an IT strategy that directly supports the business strategy.
An effective IT strategy clearly defines how all IT services, and processes to deliver the services, align with business goals. It also outlines a future state where your IT services directly contribute to the business sustainability and growth.
The strategy sets the foundation for aligning IT with the business, addresses the delivery of technology services and describes the costs associated with the delivery of those services. In summary, it provides a roadmap or blueprint for direct contribution to the success of the business.
There are several key issues to recognize and questions to address when considering a well defined IT strategy:
How do we know if our IT services are aligned with the business?
If IT is not aligned with the business, what is it costing us?
How do we align our IT plans so that they directly support business objectives?
How much will it cost?
How will the IT strategy contribute to revenue goals?
How do we know when our IT is aligned?
How will we maintain alignment?
To develop an IT strategy, a comprehensive view of technology, people and processes will provide the greatest benefit.
Technology includes all business software required for your business, and also incorporates the overall network infrastructure and architecture to support the business software.
The people element consists of all internal IT staff and external IT resources you utilize. In addition, you must include all resources that contribute time and effort to IT functions. All direct and indirect costs are included.
Processes must include all business processes supported by IT - or that could be supported by IT. IT processes include all operational activities such as procurement, configuration management, change management, service and support.
There are several questions to consider in the early stages of evaluating and formulating a plan to develop an IT strategy:
Is your technology meeting current business needs?
Can your technology scale to meet the changing demands of the business?
What are the key integration points and will they adapt and grow effectively?
What is the most effective sourcing strategy for people and technology?
What is the most cost effective means to deliver the quality and service levels required by the business?
Are your processes fine tuned in all areas of IT operations?
Are all technology and IT Governance risks accounted for?
Once you provide preliminary answers to these questions, you are better prepared to begin the strategy development process.
IT strategy development can be accomplished through the use of a four-step process:
Discovery: Document the current state of technology, people and processes - including business processes
Assessment: Assess technology, people and IT processes, establish and map out if/how each enables the business processes
Analysis: Analyze the current state and potential desired future states
Formulation: Develop solutions to reach desired future state
Implementation of the IT strategy requires substantial planning and depends on the size of the business, urgency and costs. The strategy is generally implemented over long periods of time on a priority/benefit basis.
The goal is to recognize incremental improvement. It is recommended to use a standard project delivery methodology to develop a plan and to manage the implementation of the IT strategy.
Developing and implementing an IT strategy will provide substantial business benefits. Maintaining a dynamic plan will help ensure your IT stays aligned with your business as your business grows.
A successful IT strategy will maximize business value and enable business growth.