Information Technology Strategic Planning by pptfiles

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									INFORMATION
TECHNOLOGY
STRATEGIC PLANNING
Edward K. Hong
IT Consultant
    Major driving force behind any
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    business today is change
       The following factors shape today’s business climate, and
        the pace of change is quickening.
          New technologies, more sophisticated consumers, new
           alliances, radical shifts in buying patterns, global
           competition.
    IT solutions
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       IT solutions must also keep pace, so that they remain
        aligned with business needs.
       Understanding an enterprise’s IT requirements and
        providing innovative IT solutions are essential to
        keeping a business flourishing.
       IT strategy based on a shared vision with
        stakeholders is critical to any successful enterprise
        and requires continual updating.
       IT strategy must address
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    Business drivers

    Cost-effective IT solutions to help improve business performance
    Identification of a target IT environment to achieve the enterprise’s vision
    and goals
    Alignment with the business plan and satisfaction of client and senior
    management expectations
    Specific management processes and practices to establish or improve them

    Identification of the most cost-effective way to integrate these processes

    Opportunity areas where IT can help the business gain a competitive edge

    Identification of actions needed immediately and in the future
    Building Blocks to Strategic Planning
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       To address these issues and ensure that the IT
        strategic plan aligns with business needs, three
        building blocks are necessary.
The three building blocks of strategic planning
 The strategic-planning approach ensures that IT
initiatives and projects add value to business
operations and performance.

1. IT assessment
2. Business and IT alignment
3. Initiatives planning
    IT strategic plan
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       An IT strategic plan must ensure that business needs
        are the driving force for technology solutions.
       The plan must keep in mind business productivity
        and effectiveness, cost reductions, revenue
        generation, and customer satisfaction.
     Three building blocks
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    Issues and problems
    Critical items require fixing
    A longterm strategy must plan.
                                       Business and
• What are the issues,                 IT alignment               • Once issues and
  problems, and                                                     business requirements
  requirements that IT          • Understanding business            are understood, the
  must address to deliver         drivers, management               next step is to
  outstanding service to          expectations, and                 formulate initiatives to
  its customers?                  customer requirements             address needs.
                                  for IT solutions is
                                  important.
      IT assessment                                                         Initiatives
                                                                             planning
                            Internal IT requirements
                            Require investments in technology to improve service delivery
                            new hardware and software
                            management process improvements.
    IT Assessment
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       To understand whether you’re delivering quality services
        to your users, you should perform a self-assessment of
        your capabilities.
        Assessment should encompass three major areas:
         strategy and planning
         application development
         Systems management.
       In addition, you should conduct a customer survey to
        gauge whether your customers perceive you the same
        way you perceive yourself.
    A simple way to conduct a self-assessment
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       To determine the critical elements in these three areas
        for delivering good service to your customers.
       Decide how important these elements are to the
        organization and how effectively the organization
        currently performs them.
       The gap between importance and effectiveness should
        help determine the priority for correcting some of the
        issues so that the importance and effectiveness ratings
        converge.
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     IT Assessment
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        All managers in the organization should participate
         in taking the self-assessment.
        Once the results are tabulated, the largest gaps
         (accumulated to one decimal place) will show the
         priority of the items to focus on.
         These items become initiatives, or projects within an
         initiative, during the initiative-planning step.
        Three building blocks
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     A scan of available technologies           1. Business drivers
     will identify possible solutions for       2. Management expectations
     business requirements.                     3. Available technologies
                                            Business and
 • What are the issues,
   problems, and
                                            IT alignment       • Once issues and business
                                                                 requirements are
   requirements that IT must        • Understanding business     understood, the next
   address to deliver                 drivers, management        step is to formulate
   outstanding service to its         expectations, and          initiatives to address
   customers?                         customer requirements      needs.
                                      for IT solutions is
                                      important.
          IT assessment                                                  Initiatives
                                                                          planning

     The IT strategic plan must reflect business needs.
     You must determine what the business needs are.
             Business Drivers
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                               Some of the common business drivers and
                               their implications for IT solutions.

                        • Industry consolidation
     Business Drivers



                        • Shortage of critical skills
                        • Regulatory uncertainties      Not all of these drivers will
                                                         apply to your company’s
                        • Product time to market
                                                         situation, but this list can
                        • Competition                     provide a base to work
                        • Quality products and          from as your business tries
                          services                          to define its critical
                        • Operational cost reduction             elements.
                        • Customer loyalty
                        • Revenue growth
     Industry consolidation
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        A company must be positioned to assimilate and
         integrate acquired companies’ IT infrastructures
         without affecting business users’ productivity.
        Your company might need to extend its business
         systems to accommodate new users and integrate
         acquired companies’ applications into the existing IT
         environment.
     Shortage of critical skills
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        Demand for talented business and IT workers
         normally exceeds supply.
        You must capture IT and business knowledge and
         distribute it in a reusable form so that new staff can
         become productive as soon as possible.
     Regulatory uncertainties
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        Government and industry policy changes affect
         internal operating procedures and reporting
         requirements.
        Architecting an environment for maximum flexibility
         is necessary so that your company can assimilate
         mandatory changes without major rework of the
         computing infrastructure and applications.
     Product time to market
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        Getting products and services to the marketplace
         first can give your company a tremendous
         advantage in gaining market share.
        Providing technology solutions to shorten the
         product development cycle will get products to
         market more quickly than those of the competition.
     Competition
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        Today’s global business environment is dynamic and
         highly competitive, forcing companies to be more
         creative in innovating products and in taking a more
         entrepreneurial approach to business.
        IT must build solutions to leapfrog competitive
         products and services and to provide knowledge
         workers with the right information at the right time
         to make informed business decisions quickly.
     Quality products and services
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        Delivering quality products and services to
         customers is critical to maintaining customer loyalty.
        The cost of correcting quality problems after
         delivery directly affects a company’s bottom-line
         profit.
        IT must provide systems to detect quality issues
         before products are delivered to customers, thus
         reducing the cost of quality.
     Operational cost reduction
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        Reducing operational costs is critical to a company’s
         profitability.
        IT will need to quickly and accurately develop new
         applications to support changes in business
         processes.
        Systems availability, performance, and access to the
         right information on demand are critical to reducing
         errors and delays in business operations.
     Customer loyalty
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        Keeping your customers is critical to maintaining and
         increasing your company’s market share and
         profitability.
        When customers are satisfied with products and
         services, a company can market complementary
         products and services.
        IT must provide capabilities for mining customer
         data to understand customer satisfaction, buying
         patterns, and propensity to buy, thereby increasing
         revenue.
     Revenue growth
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        Growing business revenue is crucial for business health.
         It’s not enough to just reduce operational cost to
         improve profits; the business must show new, innovative
         ways to increase revenue.
        IT needs to help the business speed up its product
         development cycle to get products to market ahead of
         the competition.
        In addition, innovative uses of technology, such as e-
         commerce, can reduce errors and business process
         delays in closing customer orders.
          Management and Customer Expectations
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                                      Some of the expectations the author has
                                      accumulated over the years.

                             •   Customer focus
         Management and
     Customer Expectations




                                                            You can use these
                             •   Alignment with business      expectations
                             •   Performance                as a starter set to
                             •   Innovation
                                                             accelerate the
                             •   Responsiveness to change
                             •   Cost-effectiveness             interview
                             •   Access to information           process.
                             •   Security
                             •   Quality
     Customer focus
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        Foster proactive relationships with customers to
         ensure that IT is considered a de facto member of
         each business unit’s team.
        IT must clearly understand all customer support
         requirements and routinely exceed customer
         expectations in terms of project delivery, quality,
         and systems reliability, performance, and
         availability.
     Alignment with business
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        The IT strategy must align with business directions
         and priorities so that IT solutions contribute to the
         enterprise’s success.
        This means developing the IT strategy in
         collaboration with business units so that IT solutions
         can improve business performance.
     Performance
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        The IT organization must establish the right
         measurements so that it can consistently meet or
         exceed service-level goals, including system
         availability, systems performance, project delivery,
         and financial budgets.
     Innovation
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        IT should innovatively use technology to improve
         business performance.
        Working with business units, IT management should
         recommend technology solutions to address revenue
         generation, profitability, cycle time reductions, and
         staff productivity.
     Responsiveness to change
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        The IT organization must be responsive and adaptive to
         change.
        It must be able to integrate acquired companies’
         information systems into its business systems
         infrastructure without completely rearchitecting its
         environment.
        This means investing in an infrastructure that gives the
         enterprise the flexibility to support a broad range of
         heterogeneous information technologies necessary to
         meet business objectives.
     Cost-effectiveness
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        The IT organization must justify all expenditures,
         showing a realistic ROI in IT infrastructure and
         business solutions.
        IT must also improve its own productivity by
         minimizing labor-intensive activities and eliminating
         errors in its delivery process.
        IT cost must be competitive to avoid the threat of
         business units outsourcing their technology solutions
         to outside vendors.
     Access to information
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        The IT organization must give business users access
         to information on demand in user-defined formats.
        Information should be integrated so that all relevant
         information in a given subject area is available for
         analysis and reporting when required.
     Security
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        The IT organization must provide secure access to its
         infrastructure and business systems.
        It must prevent penetration into the IT environment
         by unauthorized personnel, including internal and
         external individuals with malicious intent.
     Quality
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        The IT organization must strive to deliver error-free
         results to its customers.
          It must establish the structure and processes necessary to
           manage and control the IT environment so that changes to
           the environment don’t affect customers.
          IT must be proactive in identifying potential problem areas
           and correct them before they impact customer productivity.
          IT must plan, track, and control its projects so that it can
           deliver them on time and within budget and satisfy business
           expectations.
     E-commerce
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        Electronic communications with customers can
         increase revenue, improve customer loyalty, and
         shorten the operational process.
        In addition, many e-commerce applications, such as
         order entry and status checking, can improve
         internal business productivity by offloading work to
         customers.
     Business to business
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        Your company must be able to conduct business
         online with your suppliers and business partners to
         speed up the value chain.
        Therefore, you must continually find better ways to
         exchange information with the extended enterprise
         because vendors and suppliers are critical to
         reducing cycle time.
     Integration
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        The integration and interoperability of applications
         built on multivendor platforms or multiple database
         environments are the norm
        In today’s environment, integration and reuse of
         legacy functions and data must be easy so that you
         can avoid incurring expenses to redevelop these
         functions and data.
     Mobile computing
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        Providing any-time online information support to
         employees, regardless of where they’re located, is
         critical for global organizations.
        Employees become more productive because they
         can access information systems without being
         connected to telephone land lines or a specific IT
         worker’s office location.
     Telecommuting
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        Today’s technology makes it feasible for employees
         to work anywhere.
        By using advanced communication technologies,
         virtual teams can be effective even if team
         members reside in different continents and time
         zones.
     Predictive analysis
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        The company should use predictive-analysis
         techniques and tools so that business units can
         understand trends on the basis of historical
         information.
        This enables proactive action to prevent problems
         from impacting the business and to improve business
         performance.
     Component-based development
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        The pressure to improve delivery of IT commitments
         will continue to grow as the pace of business
         changes accelerate.
        Organizations must position themselves to meet this
         challenge.
          One  way to do this is to shorten the application
           delivery cycle through reuse of components in building
           applications.
     Knowledge reuse
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        In today’s IT world, expertise is often in short supply.
         Consequently, you need to capture expert
         knowledge in the organization and leverage it by
         making it readily available and comprehensible to
         less-experienced personnel.
        Once captured, this knowledge can minimize the
         pressure to find skilled personnel, especially when
         experts leave the organization.
     Security
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        With public access to some of the company’s
         systems, extra precaution is necessary to prevent
         inadvertent access to confidential data.
        In addition, viruses, worms, and hackers are constant
         threats to the security of IT systems.
         IT Business Model
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     The IT business model consists of IT’s mission, goals, and critical
     success factors, which are based on business drivers, technology
     drivers, and customer and management expectations.

        In addition to addressing
         technology issues and solutions,
                                                        Mission
         goals should also address how
         to interface and interact with
         stakeholders.
                                                Goals
        The IT business model provides
         the high-level technology                            Critical
         direction for the company. It’s                      success
         the basis for formulating the                        factors
         strategic-plan initiatives.
     Mission
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        The IT organization’s purpose is to support the
         enterprise’s business plans and meet or exceed
         customer expectations.
        IT must work collaboratively with business units to
         help achieve business goals.
        Therefore, the mission statement should say
         something like, “Improve business performance
         through innovative IT solutions.”
     Goals
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        A company’s goals are the broad, longterm results it
         wishes to achieve, to support its mission.
        Examples of goals that the entire IT organization
         should buy into include the following.
          Ensure customer focus.
          Align with business needs.

          Leverage technology.

          Maintain industry-recognized processes.

          Ensure service quality and continuity.
     Ensure customer focus
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        IT must recognize the importance of “the voice of
         the customer” by listening and communicating
         effectively and trying to understand the customer’s
         business and priorities through joint planning and
         close collaboration on initiatives.
        It must also act as the catalyst in providing
         innovative technology solutions to solve business
         issues.
     Align with business needs
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        IT must understand business strategic goals and
         initiatives so that technology strategies and
         initiatives can help achieve business goals.
        Technology investments must deliver added-value
         results by improving business performance.
     Leverage technology
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        IT must strive to be the “go to” organization for
         technology issues within the business.
        It must achieve breadth and depth in its technology
         skills set so that there will be few questions IT can’t
         answer.
        By using advanced or existing technology, IT must
         design innovative ways to improve productivity and
         business performance.
     Maintain industry-recognized
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     processes
        IT must continually refine and improve infrastructure
         and project management processes.
        Processes require continuous improvement because
         the environment in which they operate is constantly
         changing.
        Environmental factors such as customers,
         infrastructure, governance, automation tools,
         adherence issues, and organizational reporting
         influence processes.
     Ensure service quality and
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     continuity
        Ensure that IT services are responsive, reliable,
         stable, and available and that they meet or exceed
         customer performance expectations.
        IT must proactively identify potential problems
         through metrics and trends before they impact
         service to customers.
        IT must also protect and recover computer assets
         from malicious destruction and from unforeseen
         disasters.
     Critical success factors
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        CSFs influence whether IT can achieve its stated goals.
         CSFs are normally point-in-time items, meaning they can
         change depending on the criticality they have on the
         current business and IT environments.
        The environment keeps changing, so CSFs may also
         change accordingly. Some CSFs that could affect a
         strategy’s implementation include the following:
          Customer satisfaction
          Funding
          Culture change
          Continuous process improvement
          Buy-in to a clearly articulated strategy
     Customer satisfaction
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     •   IT must establish formal partnerships with its customers,
         understand their business requirements, and consistently
         exceed customer service expectations.
     Funding
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        As long as there’s a demonstrable value to the
         business, funding must be available for technology
         initiatives. The business must explicitly define
         priority-setting criteria to help IT formulate its
         initiative plans.
     Culture change
53


        IT must focus on providing better services and
         communications to customers by instilling a sense of
         urgency, ownership, teamwork, responsibility, and
         pride in daily activities.
     Continuous process improvement
54


        IT must continually improve its management
         processes so that it can deliver responsive,
         outstanding service to its customers.
     Buy-in to a clearly articulated
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     strategy
        Buy-in from senior management, business units, and
         the IT organization is critical to achieving the goals,
         strategies, and initiatives outlined in this plan.
      Three building blocks
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                                      Business and
 • What are the issues,
   problems, and
                                      IT alignment         • Once issues and business
                                                             requirements are
   requirements that IT must    • Understanding business     understood, the next
   address to deliver             drivers, management        step is to formulate
   outstanding service to its     expectations, and          initiatives to address
   customers?                     customer requirements      needs.
                                  for IT solutions is
                                  important.
        IT assessment                                                Initiatives
                                                                      planning
     Initiatives refer to the actual work that must be done.
     They’re also the key elements that align the IT strategy
     with the business.
     Initiatives Planning
57


        Initiatives are long-running programs
          that create business solutions and internal IT
           improvements on the basis of business drivers, customer
           and management expectations, and the gaps identified
           through the self-assessment.
          that could continue for several years.

        The strategic plan should identify multiple projects
         for each initiative—each having its own scope, costs,
         schedules, and deliverables.
          Allprojects within an initiative should contribute to
           achieving that initiative’s goals.
     Initiatives Planning
58


        Because organizations have limited resources, you
         should prioritize the initiatives on the basis of value
         returned to the business.
          This will require developing a high-level business case
           to rank the work, slotting lower-priority items for later
           years.
     Technology Strategy Roadmap
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     The strategic plan
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        It’s the end result of the three building blocks just discussed.
        Developing a strategic plan in this manner can help ensure the
         alignment of business needs and IT activities.
        Benefit the enterprise in several ways.
            provides a clear roadmap for important items.
            everyone will be “rowing” in the same direction.
            business financial team will have a high-level view of IT funding needs
             each year.
            This is a great way to motivate user departments to buy into the strategy
             because they’re intimately involved in the strategy development process.
61   THE END
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