Components of an Achievable IT Strategic Plan
By Roger Kuhn, Vice President, Strategic Consulting, Marcum Technology
Business executives often lament that the IT department is either not strategic enough or doesn’t seem to get things done. Similarly, IT leaders are equally exasperated by what they perceive as a lack of support from the business, unrealistic budget constraints, or new initiatives that blindside them. These issues are most common in organizations that work from a simple annual plan or budget, rather than a comprehensive, business-aligned IT strategy. It is not enough anymore to simply invite IT leaders to attend strategic planning meetings. A well-defined IT roadmap should be developed that outlines the technology investments required to support the business strategy over the next several years.
The initial discovery and collaboration phase, in which key business and department leaders work together, is the first and probably most critical step in building an effective IT strategy. This discovery process can be a rigorous subset of overall corporate strategy planning, but in most cases it is simply traditional strengths, weaknesses, opportunities, and threats (SWOT) workshops that extend across a maximum of three years. These workshops should focus on identifying the most critical market opportunities each leader sees for growth, enhanced customer engagement, or increased efficiency. At the end of each session, each leader should identify and rank the top three to five opportunities to ensure the plan is well-focused and achievable.
The next phase of the roadmap is evaluating the technology programs/components that will support the business’ top strategic initiatives. It is especially important that the individuals driving the process have a healthy understanding of industry technology trends and tools that can be leveraged to support the desired business objectives. Software evaluation projects that precede particularly large initiatives, such as ERP replacement programs, should be broken out as separate initiatives.
Typically, an IT strategy plan is broken into the following components:
- Digital and e-commerce: Web platforms/content, storefronts, customer/vendor integration, and marketing.
- Business applications: ERP, CRM, HRIS, AI, RPA, and BI.
- Infrastructure: Security, cloud versus on premise, mobile, network, and communications.
- Organization and support: What does the IT organization or third-party support ecosystem need to look like to support the initiatives?
As you build out the four components, it is important to develop a conservative budget estimate for each of the identified initiatives. The estimated spend for each budget item should be projected across all of the years covered by the plan, and it should also be broken down by whether it is a capital or operating (and recurring) expense. In any budget estimation, it is always important to consider any additional internal cost that may be incurred (such as extra bonus, additional hires, or backfills) to support the initiatives. Many organizations also net out savings from the proposed spend, such as software support costs for a product that is set to be replaced.
Along with the budget, a timeline should be developed that lays the execution of the initiatives. For many large-scale initiatives, such as ERP replacements or acquisition consolidations, the program itself may require multiple phases. The knowledge of how one may effect another in order to be sequenced is critical. Many highly transformational roadmaps have foundational initiatives that must be completed before a related and dependent initiative can begin.
Leaders often forget to consider the organization’s ability to support the initiatives. Although third-party assistance can be help, there will always be some level of involvement from either the business, its IT department, or both. A Gantt chart, which is used for planning and scheduling projects, is the most useful way to display the timeline across the planning horizon.
After each IT initiative is identified and an estimate is determined, business and department leaders should determine their desired payback or benefit. In many circumstances, the payback may be relatively soft or unknown. Other initiatives may have a more defined payback, such as headcount reductions or redeployments. Some initiatives, such as a software evaluation, may not have a defined payback, but most should either increase revenue opportunities or streamline the organization in a way that can be subsequently measured.
Once the executive team or board of directors approves the roadmap, it officially has the business sponsorship required for success. Many organizations form a steering committee with executive sponsors of the initiatives to ensure the IT team has the proper resources and attention. During the timeframe covered by the roadmap, it is not unusual for new events, such as an acquisition, a sale of the business, or a cyber security issue, to occur that may require a subsequent adjustment to the roadmap. Many organizations revisit and adjust their IT strategy annually at the same time they review their overall business objectives. The collaboration and analysis techniques learned during the original roadmap process enables organizations to effectively make necessary changes to align with new opportunities.
Marcum Technology advisors can help organizations through the highly complex process of building and executing IT roadmaps. Marcum Technology employs a highly collaborative approach with IT leaders to leverage deep organizational and industry knowledge and ensure ownership of the roadmap and subsequent execution.