IT Strategy
This is a comprehensive document on IT Strategy. Includes IT strategy
frameworks, critical success factors, detailed project approach and
organizational structure, sample deliverables, and more.
The Key Drivers of IT Value are an Organization’s IT Mindset and
its Ability to Execute
Today’s best practices show that IT value
can be maximized when enterprise IT
investments are aligned with business
goals and IT execution is well managed.
Mindset
Business
Aligned
Tactical
Execution
Reactive Managed
2
“Provide IT Capabilities” is the Overall Process for Deploying
and Managing Information Technology Assets in the Enterprise
Provide IT Capabilities is the mega-process associated with providing the enterprise with information
technology systems and services
• Strategy sets the direction while;
• Structure defines the roadmaps required to support the strategy and guides;
• Execution which is the implementation of the strategy
Internal / External Customers
Inputs Provide IT Capabilities Output
IT Systems & Services
Business Structure
Strategy
Defined by the
architectures: Execution
Technology Strategy IT Delivery
Trends Technology IT Management
Application
Information
Business
Environment
Technology Landscape
Represents the technology capabilities
available in the marketplace to be leveraged
by the enterprise
3
We Believe A Pragmatic Approach to Creating & Managing an IT
Strategy Can Provide Significant Benefits
An IT Strategy approach that focuses on the key issues facing organizations today and
answers the questions:
– What IT investments should I make that will provide me with the best business returns for the money
spend?
– What IT capabilities do I need to be successful in the connected economy?
– How should I manage my IT investments so that I realize the the full value of those investments and
reduce the risks of failure?
The approach should recognize that:
– Good IT planning is more than paying salaries and depreciating hardware -- It’s about creating new
assets in the form of intellectual capital and strategic IT capabilities
– Good IT planning is more a matter of allocating resources to the right investments than containing costs
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An IT Strategy Drives the IT Investments Choices
A plan for leveraging the IT capabilities of the company
and the ecosystem to deliver business success Clusters of tech-enabled
business capability
--------------
Provide decision making
Ecosystem framework
Business Strategy
IT Strategy
IT Systems & Integrated
Services Business &
Company IT Capabilities Technology
Plan
IT Operating Model
Skills and capability that
Rules of engagement for enable System & Service
decision making delivery
------------------------- --------------
Coordinates complex Sourcing strategy is critical
relationships, orchestrating
and brokering
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Elements of An IT Strategy
IT Principles
– Statements derived from the enterprise’s business strategy, business culture and current
situation that drive decisions about IT
IT Systems and Services
– The strategic technology-enabled business capabilities stewarded by IT
– The future state definitions of the IT group’s products and services to the organization provide
the decision-making framework for all potential IT investment.
– These systems and services need to recognize
• the interplay of these systems and services with those of business partners and customers and
• the potential need to support rapid business and technology evolution
IT Capabilities & Sourcing
– A combination of skills and knowledge with methods and tools that support the development,
deployment and management of the IT systems & services
– The capabilities model examines sourcing strategies and defines the what competencies should
be internally sourced and what should be externally sourced
IT Operating Model
– IT management structures and processes
– IT delivery structure and processes
– Definition of roles, responsibilities, and interaction with partners and customers that support the
model
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IT Strategy Drives the Overall IT Planning Process
IT Strategy Technology
Business Environment
Strategy Principles
Systems and
Services IT Architectures
Business Infrastructure Architecture
IT Operating Model
Environment
Capabilities and Application Architecture
Sourcing Information Architecture
What
How
IT Current State IT Initiative Portfolio IT Future State
IT Management IT Infrastructure Initiatives IT Management IT
Environment Portfolios Environment Portfolios
Application Initiatives
Processes Infrastructure Processes Infrastructure
Data Initiatives
Tools Applications Tools Applications
Information IT Management Initiatives Information
Resources Resources
Repositories Repositories
Measures
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Our Approach Focuses on Enabling the 3 Critical Success
Factors For IT Strategy Development
Strong alignment
– Strong bi-directional alignment and clear linkage between IT investments and the business
strategy
Appropriate governance
– An IT operating model that balances the IT roles & responsibilities within the enterprise
(between business units, divisions, functions) and leverages external resources as well
Identification of Critical Capabilities
– Identification of the critical IT capabilities required to deploy and manage the IT environment and
the most appropriate sourcing of the capability (internally and externally to the enterprise)
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Development of the Portfolio of IT Products & Services Defines
What Should be Done
Critical Success Factor IT Strategy Component Characteristics
Explicit linkage between product
& services capabilities and the
business strategy
All IT initiatives are integrated
with IT environment rather than
separated in enterprise and
Strong bi-directional business unit activities
alignment and clear Portfolio of IT
linkage between IT Systems & A “business oriented” view of
the IT environment rather than a
investments and the Services “technology oriented” view
business strategy
The definition of the portfolio
drives the IT investments
required to support the business
strategies
The portfolio provides a
framework for defining a
resource allocation model that
shows where IT expenditures
are going
Definition of the domain and
usage for each system / service
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IT Capabilities Specify What Types of Resources Are Needed to
Deliver and Manage the Products and Services
Critical Success Factor IT Strategy Component Characteristics
Define what is needed to
develop, deploy, operate,
support and maintain the IT
environment
Identification of the critical Identifies the best sourcing
IT capabilities required to option for each capability based
deploy and manage the IT on the strategy
environment and the most IT Capabilities
Identifies the specialized
appropriate sourcing of
capabilities required to support
the capability (internally
business direction
and externally to the
enterprise) Identifies the strategic
importance for each capability
Provides guidance for
acquisition of appropriate
resources
10
The IT Operating Model Defines How IT Will Be Managed
Critical Success Factor IT Strategy Component Characteristics
Identification of all the internal
constituents that participate in
the planning, managing and
deploying of IT
IT operating (governance) Identification of the external
model that balances the IT suppliers and partners that
roles & responsibilities not IT Operating provide products & services as
only within the enterprise Model part of the enterprise IT
environment
but leverages external
resources as well Identifies the roles &
responsibilities of all the major
constituents that influence and
manage IT
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Why This Framework Works
Planning is not an event, not a document, but a continuous process
– The strategy must be renewable as the business evolves
– The strategy must be changeable to support changes in technology
The IT Strategy must be explicitly integrated with the business direction
– Every investment in IT must provide value to the enterprise
– Value is derived from the use of technology, not technology itself
The IT Strategy must drive the implementation of systems and designs of architectures
The architectures must be linked to the IT Strategy so that implementation can be
done in a consistent and cost-effective way
Strategy is not just about the new, but what to do with the existing environment
– Must address the current systems portfolio
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IT Strategy Outputs
Element Description
The IT systems and services that are provided to support the business
processes and enable the implementation of the business strategy. Includes
definitions of:
Key capabilities - business functionality required to support business
IT Systems & strategies
Services Key characteristics - operational functionality necessary to support business
operations (e.g. user types, availability requirements, access requirements
Domain – at what level the system / service is deployed
Usage – is the system a shared, common or point resource
– Definition of capabilities (operations, development, management, planning)
IT Capabilities required to deliver the systems and services
& Sourcing – Identification of where the capabilities will be sourced (internally or externally)
and strategic importance vs. ability to meet the need
– A definition of the processes for managing IT and making decisions about IT
IT Operating investments
Model – Specification of the roles and responsibilities of all the IT stakeholders
(business and IT people) in managing and executing the processes
Statements about the IT environment, how it will be architected and developed,
IT Principles how it will be managed and how it will operate
Resource allocation model organizing the IT spend by systems and services
IT Investment defined above. Identifies where IT spend is going : new business capabilities,
Model (Optional) ongoing operations, support and maintenance
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IT Strategy Development is Strongly Linked to Business Drivers
IT Strategy
IT Systems &
Strategic Intent & Services
Business Objectives • Characteristics
Changes In External • Key capabilities
Business Perspective
• Changes in the business
IT Operating Model
Business products/service offered
Strategies • Changes in the marketplace • Structure
constituents or relationships • Processes
Drive changes in
• Product strategies
• Operational
the elements of
strategies the IT Strategy IT Capabilities
Changes In Internal
• Marketing strategies • Baseline
Business Structure
• Regulatory strategies • Common
• Changes in the business • Specialized
processes • Sourcing
• Changes in the governance
and organizational structure
Business IT Principles
Environment
Analysis and impact of
Analysis of the business changes
Business strategies business strategies
and priorities drive the
are derived & drive changes and priorities of
characteristics of the IT products
confirmed the external business
& services, IT governance and
perspective and the internal
the required IT capabilities
business structure
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The IT Strategy Development Process is Accelerated, Phased &
Iterative
Phase I Phase II Phase III Phase IV
Project Initiation IT Strategy Development IT Strategy Refinement Documentation
& Information Gathering
Review IT
Strategy with IT
Management
Determine Team
Prepare Business Document IT
Project
Materials
Strategy &
Identify IT-
Strategy
Enablers
Update &
Refine IT
Strategy
Create,
Establish and WORKSHOP Document
Kickoff
Project Team
Review &
Update Initial Validate IT
Implications
& Next Steps
IT Strategy Strategy with
Key Business
Executives
Week 1 Week 2-5 Week 6-8 Week 9-10
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Project Phases I & II
Phase I Key Activities Deliverables or Work Products
Project Establish specific goals
Initiation
Capture key issues Work plan and final project charter
Identify key participants Interview lists
Refine data collection material Deliverable templates
Finalize project schedule including
interviews, & workshops
Phase II Key Activities Deliverables or Work Products
IT Strategy
Development & Document underlying business
strategies Documented business strategies
Info Gathering
and objectives
Identify the current portfolio of IT
systems and services and Preliminary list of IT systems and
capabilities services
Identify current IT spending model Preliminary domain/usage model
Conduct business strategy validation
meetings
Identify technology opportunities &
barriers
Develop strawman systems and
services
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Project Phases III & IV
Phase III Key Activities Deliverables or Work Products
IT Strategy
Refinement
Updated list of IT Products &
Workshop Develop workshop “seed” material
Services
Conduct IT strategy workshop Capabilities
Refine set of IT systems and Characteristics
services, characteristics, sourcing
Domain
opportunities
Usage
Define IT operating model and roles
Governance model
& responsibilities
Competency model
Summarize required IT capabilities
IT Investment model
and appropriate sourcing model
Develop IT investment model
Phase IV Key Activities Deliverables or Work Products
Documentation
& Next Steps Compile and present results Final IT Strategy document
Determine action steps for execution
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Typical IT Strategy Development Team
Executive
Sponsor
Client Consulting
Project Project
Manager Manager
Business
Leadership
Client Consulting Consulting
Business SMS Strategy Industry
Consultant Consultant
Client
IT SMS
IT Strategy Consulting
Workshop IT SME
Participants Workshop
Participants
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Our Approach Focuses on Speed and Reusability
Process Focus
– An iterative, process oriented approach to strategy development that enables establishment of a
continuous IT strategy process to be integrated with existing business and IT planning activities
Collaborative effort
– Leverages our experience in strategy development across many different clients in many
different industries with your business and applied technology knowledge for your enterprise
Acceleration
– Use of parallel tasking wherever possible
– Leveraging our IT Strategy templates
– Facilitated sessions to gain agreement by all stakeholders quickly and leverage our Subject
Matter Experts at the appropriate time
Knowledge Transfer
– Provides for knowledge transfer of our tools and methods for ongoing management of the IT
Strategy by your IT planning group
Practical & Usable Outputs
– Provides an IT strategy guidebook that serves as a practical tool for both IT and business people
to use for ongoing management of IT investments
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Sample Deliverable Components
Documenting Enterprise Business Strategies - Sample
Sales & Marketing Strategies
Transform consumer information into actionable
marketing knowledge
Company Objectives Be the preferred partner with our customers
Increase Volume Strengthen our worldwide distribution (& other
business partner) system
Increase salesforce effectiveness
Expand Market Share of
Worldwide Widget Sales Product Portfolio Strategies
• Build brand preference and value
• Aggressively place our products “within an arm’s
Maximize Long Term Cash Flows reach” of consumer demand
Improve Economic Profit and
Create Economic Value Add Operating Strategies
• Increase our human capability & capacity for
value producing action
• Leverage financial fundamentals to create
sustainable results
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Information Technology Enablers - Sample
Business Strategy : Increase sales force effectiveness
Knowledge & Information
Technology Infrastructure Application Environment Environment
• On-line, real-time • Workflow tools to facilitate • Portable reference
communications sales process information including:
• Salesforce and divisions • Disconnected, portable • Pricing information
• Portable computing device applications and tools to • Promotions / deals
for analysis, tracking and • Product specifications
support remote salesforce
• Sales presentations
information access • Consistent application
• laptops • Portable customer
architecture for rapid
• Consistent remote access information
development & • Contacts
for shared resources deployment of new • Contracts
through: capability • Sales history
• dial-in access •
• Sales analysis tools Order status
• network based resources
• Business plan
• Geographically dispersed
management tools
salesforce and low level
• New product training tools
user sophistication require:
• Commonality
• Standardization
• Ease of use
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Specialty Retailer - IT Systems & Services Model - Sample
Info. Mgmt. Merchandising Supply Chain Store Mgmt Corporate
Repositories Apps Apps & Ops Apps Support Apps
• Product Info Rep. • Purchasing • Distribution and • Point of Sale Sys • Human
Mgmt Sys Inv. Planning & Resource Mgmt
• Customer Info • Prod Master Sys
Forecasting Sys Sys
Rep. • Allocation Mgmt
• Store Labor Sys
Sys • Purchase Order • Financial Mgmt
• Vendor Info Rep. Mgmt Sys • Self-Service Sys Sys
• Pricing Mgmt
• Store Info Rep. Sys • Warehouse • Customer Loyalty • Financial
• Pricing, Promo- Mgmt Sys Mgmt Sys Reporting Sys
• Replenishment
tions, Markdown Modeling Sys • Order & • Gift Certificate • Sales Mgmt Sys
Rep. Fulfillment Mgmt Sys
• Returns
• Operations/ Processing Sys
Modeling Sys • Institutional
Process Info Rep. Accounts Sys
• Merchandising
Info Rep.
Infrastructure Services
• Communications Infrastructure
• Productivity Tools
• Collaboration Environment
*As developed at the IT Strategy workshop; see Appendix for detailed IT product & service definitions with specific B&N components
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A Domain / Usage Example
Store Management
& Operations A common POS system will be used
Store - Common for all stores with support for all
• Point of Sale Systems languages, currencies and tax
• Labor Management calculations
Systems Marketing &
• Store Training Merchandising
Systems
• Merchandising
• Store Operations A common marketing
Planning Systems
Systems Market - Common program system will be
• Marketing Program
used at the market level
Systems
A shared marketing
Regional - Shared program system will be
used by the business unit
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IT System & Service – Current / Future State Definition
A brief description of this IT system / service
Description
Current State Future State
Variety of systems in use Single, shared or uniform system serving enterprise
Portfolio/ ACT!, Rainmaker
Usage
Internal users only, primarily office-based with Connected and mobile/disconnected users
limited mobile workforce
Characteristics
Users External access for customers and partners
Requires manual intervention to sync up personal Marketing - Business day availability (hours of outage)
Availability/ and corporate data Synchronization for disconnected users
Performance Problems with remote access of data
In many cases, data is not shared between Interface to customer information database to facilitate
departments/users sharing between business groups
Integration
Limited direct feed interfaces between systems Ability to receive external data feeds such as marketing
/
data
Interfacing
Basic contact management Implement web front end to access application logic,
Some systems are too sales-oriented, and do not
and tiered (privilege-based) access to product data
have sufficient focus on customer relationships Keyed to customer information
Users are concerned about sharing their private Facilitate front-to-back integration of ordering,
Capabilities contacts in a corporate database manufacturing and delivery processes
Provide ability to track transaction status
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Sample IT Governance Structure
• Set business strategy
• Approve capital funding
Executive Management
• Overall direction setting
• Enterprise investment priorities
• Major project approval
IT Steering Committee
• Strategy, standards
& architectures
• Coordinate cross-division activity • Enterprise
• Support enterprise IT direction infrastructure
• Common systems
IT Management Council
Corporate
IT
• Local initiatives formation
• Local project priorities
Divisions
Divisions
Divisions
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IT Delivery Processes - Infrastructure – Sample Roles /
Responsibilities Matrix
Future State Roles & Responsibilities Matrix
Influencers &
Service Providers
Decision Makers
Other External
Project Office
Pres/Staff Head)
Steering Comm
Relationship
Outsourcing
Application
Investment
Resources
Managers
Managers
IT Business
Delivery
(or Group
Council
Mgmt
XXX
YYY
CIO
TPI
Design AP2 A AP1 I I A,E,I I A,E3 I I E
IT Delivery Processes
Develop I4 I4 AP,E A E3 E5 E5 E5
Deploy I4 I4 AP,E A I E5 E5 E5
Operate I4 I4 AP A I E5 E5 E5
Support I4 I4 AP A I E5 E5 E5
Maintain I4 I4 AP A I E5 E5 E5
Notes:
AP- Approves (input as well) 1 - Business Units approve up to $50,000 threshold for Point Infrastructure Products
2 - Investment Council approves > $50,000 threshold
A - Accepts responsibility (input as well) 3 - Project Office manages selected enterprise-wide projects
I - Provides input 4 - Relationship Managers and Application Delivery Managers are not required to
E - Executes (input as well) provide input for Point Infrastructure unless their business units or applications are
affected
5 - In the design phase, the SOW will specify the actual responsibilities to resolve
issues regarding execution, responsibility and approval
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Strategic Importance & Sourcing - Sample
IT Systems and Services
Competitive
Differentiator
• System 2 • Service 4
• System 3
• System 1
Strategic Importance
• Prod & Serv 8
Competitive
Necessity
• System 5 • Communications Infrastructure
• Service 7
• System 6
Basic • Financial Systems
Support
External Standard External Internal Internal
Service Package Custom Integration Development
Provider Acquisition Development
Sourcing Options
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Sample Capabilities Matrix
Knowledge and Information
Technology Infrastructure Applications Environment
Management
• Systems management • Package/service selection • Information management
• Operations • Package implementation and • Knowledge management
• Capacity planning integration • Data analysis
• Change mgmt. • Application development and
• Fault mgmt. maintenance
• Configuration mgmt.
• Performance mgmt.
• Asset mgmt.
• Planning and design
• Implementation
• Architecture design and
refresh
Common Capabilities
• Project management • Supplier/vendor management
• Security administration • Partner management
• Relationship management (consulting, • Value management (business cases, metrics)
interpersonal skills, managerial skills, • Help desk
people management) • Testing, Quality Assurance
• Strategic planning (includes leveraging • Business analysis
emerging technologies) • Training
• Lifecycle management • Technical documentation
• Change management
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Current / Future State – IT Capabilities - Sample
Core
(differentiates
Abbott from
competition) Project Project
Mgmt Security Security Mgmt
Business Business
Change Admin ChangeAdmin
Analysis Analysis
Mgmt Mgmt
Strategic Importance
Value Mgmt Value Mgmt
Necessity
Partner Partner
(required
Strategic Relation- Testing, QA
Mgmt Mgmt Testing,
Strategic Relation- QA
capability to
Planning ship Mgmt Planning ship Mgmt
compete in the Supplier Supplier
industry) Lifecycle Mgmt Lifecycle Mgmt
Mgmt Training Mgmt Training
Tech Docu- Tech Docu-
mentation mentation
Support
(base capability Help Desk Help Desk
required to
operate)
As-is
To-be Ability to Meet Enterprise Needs
Weak Sufficient Strong
(does not support (supports minimum (supports
business need) business need) business needs)
Note: The “as-is” and “to-be” location of each capability was identified using a “Capabilities Survey” distributed to ten senior members of the IT organization
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