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Strategic Objectives
Strategic Objectives
Strategic Initiatives
Strategic Initiatives




Warren McFarlan has said that “deciding what to do is only 15% of the
CIO™s job; the rest is managing the transformation.”3 Again, the structure of
Business Strategy ” Business Strategy for the Use of IT” IT Delivery Strategy
makes clear where the transformation is. It™s twofold. First is the transforma-
tion of how IT delivers ” a transformation of IT supply. Second is the trans-
formation in business in terms of organization, process, relationship to the
customer, and so forth to meet the business strategy. Of course, this second
transformation is, at the least, jointly accomplished with business management.
The CIO can clarify and structure what is necessary, but it is up to business man-
agement to see to it that the transformational changes actually occur. The trans-
formation takes place on their turf.
Without the clarity of a Business Strategy for the Use of IT, business man-
agement can fall too easily into the trap of expecting the CIO, without part-
nering or teaming, to single-handedly cause the second transformation to occur.
In the absence of extraordinary CIO efforts, this is doomed to failure.
Managers will often claim that a company has no strategic plan and, accord-
ingly, has no strategic intentions from which to develop a strategic IT plan. The
Strategic Demand/Supply Planning practice proceeds on the assumption that the
business™s strategic intentions can be identified and expressed through straight-
forward processes such as interviews and references to company documents.
Our experience has been that strategic intentions always exist, although they
may not be documented or even widely understood. The plan structure shown
in Exhibit 9.8 permits easy documentation and expression of the company™s
strategic intentions.
178 PLAN FOR THE RIGHT RESULTS


EXHIBIT 9.8 Strategic Plan Table of Contents
Context: The 1. Strategic Intentions
Strategic
2. Strategic Objectives
Business Plan
3. Strategic Initiatives
Strategic 4. Strategic Intentions for the use of IT
Agenda for IT:
5. Strategic Objectives for the use of IT
The Business
6. Strategic IT Initiatives (for the use of IT
Strategy for the
in the business)
Use of IT
Strategic IT 7. Strategic Intentions for Applications,
Plan: The IT Infrastructure, Services, Management
Delivery Strategy 8. Strategic Objectives
9. Strategic Initiatives for the delivery of
IT to the business




Creating the Strategic Demand/Supply Plan
The Strategic Agenda is a framework that clearly expresses enterprise objectives
and plans. The clarity lies in two cause-and-effect connections within the frame-
work. The first is the cause and effect between strategic intentions ”where the
enterprise wants to be ” and the strategic initiatives that it is taking to get there.
The cause and effect, termed “impact” in Exhibit 9.2, corresponds to “innova-
tion” and assures that the enterprise™s actions are consistent with the objectives
they address and the intentions they support. In this way, the resources invested
in strategic initiatives are assured to be appropriate to achieving the intended
results. By expressing enterprise strategies and plans in this simple three-level


EXHIBIT 9.9 Example of a Strategic Business Plan
Strategic Plan Level Example Description Example for a Company

Strategic Intention Example of one of six strategic Maximize Marketing
intentions for the company. Effectiveness ” Be the best we
can be in our industry.

Strategic Objectives Example of two out of several Establish and improve customer
strategic objectives for the communications programs.
company. These two relate
Ensure that customer service is
specifically to the example
the best in the industry.
strategic intention.

Strategic Initiatives Example of two out of several for Marketing Department: A new
each company unit. These two marketing program for dealers
relate specifically to the example and distributors.
strategic intention and the two
Distribution Department: A
strategic objectives.
revised call-center organization
to maximize time and quality
responses to customers.
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The Strategic Demand/Supply Planning Practice


cause-and-effect framework, the strategies and plans are both made specific and
defined in terms of action ” the initiatives that connect to the intentions and
objectives.
Exhibit 9.9 shows the Strategic Business Plan from Exhibit 4.8. This example
shows the cause-and-effect relationship as well as the power of the three-level
representation. This strategic business plan leads to the business requirements
for the use of IT and then to the strategic plan for delivering the requirements.
It should be emphasized that the purpose of showing this Context: Strate-
gic Business Plan is not to suggest that our purpose is to do business strategic
planning. Rather, our purpose is to describe the content of business strategic
intentions and so forth, as shown in Exhibit 9.10.


EXHIBIT 9.10 Strategic Intentions to IT Strategic Plan
Demand Supply
Business Strategic Strategic Plan for the Strategic Plan for the
Context Use of IT Supply of IT
Strategic Maximize marketing Every marketing and sales Establish the
Intention effectiveness”be the person has immediate infrastructure and staff
best we can be. access to complete support to enable an
customer information. effective, efficient, and
complete data warehouse.
Strategic Establish and improve Collect and maintain Implement a phased
Objectives customer communication complete information approach to a customer
programs. about every customer data warehouse.
interaction.
Ensure that customer
service is the best in the
industry.
Strategic Marketing”a new Establish business Work with Beta Group to
Initiatives marketing program for processes and identify best approach to
dealers and distributors. organization support for a data warehouse.
a customer information
Distribution”revised call- Purchase CRM data
system, leading to
center organization to package.
customer relationship
maximize time and quality
management.
responses to customers.




We do not expect that companies will have their strategic business plan in
this format. Often, companies have very little formal documentation of their
strategic plan. Rather, our purpose is to provide a template for stating the busi-
ness strategic plan. The process of Strategic Demand/Supply Planning will un-
cover the content and report it using the template.
The second cause-and-effect connection is between the enterprise and IT.
The objective is to assure that IT™s strategies and plans are consistent with the
business strategies and plans. As before, the cause and effect, termed “Align-
ment” in Chapter 8, assures that IT actions are consistent with the business
strategic intentions ”where the enterprise wants to be. In this way, the resources
invested in initiatives are assured to be appropriate to achieving the intended
180 PLAN FOR THE RIGHT RESULTS


business results. By expressing business and IT strategies and plans in this three-
level cause-and-effect framework, they are defined in terms of action ” the spe-
cific IT initiatives that connect to the business strategies and plans.
To carry out the example of the Strategic Demand/Supply Plan, Exhibit 9.10
shows how one business strategic intention creates the Strategic Intention for
the Use of IT, and the Strategic Plan for the Delivery of IT, all to meet the
requirements of the single business strategic intention. It should be noted that
Exhibit 9.10 implies a 1 to 1 relationship between business strategic intention
and IT delivery strategic intention. This is often not the case; rather, most of
the cause-and-effect relationships (shown as 1 to 1 in the Exhibit) are 1 to N.

The Strategic Demand/Supply Planning Process Overview
The key elements of the process are: (1) establish the business drivers ” the com-
pany™s Strategic Intentions; (2) define the role of IT in reaching those business
drivers ” the company™s strategic agenda; and (3) define what IT is to do ” the
company™s IT strategic plan. See Exhibit 9.11.


EXHIBIT 9.11 Step-by-Step Planning Process

IT input to
Business
Strategies and Plans

Steps 1, 2

Business
Strategies and Plans

Steps 3, 4
IT Role in meeting
Business
Strategies and Plans

Steps 5, 6

IT
Strategies and Plans

Step 7




NIE Strategic Demand/Supply Planning operates in a context of existing
IT activities and business strategies. Rather than start with the proverbial blank
sheet, this planning process begins with existing strategic drivers and an assess-
ment of the current state of IT and how it relates to drivers (discussed in more
detail in the Alignment practice description in Chapter 8). Ultimately, the process
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The Strategic Demand/Supply Planning Practice


identifies gaps between existing IT activities and those needed to support the com-
pany™s current strategic intentions, and fills those gaps with new IT initiatives.
As with other NIE practices, a portfolio view of IT is used as the frame-
work for the planning process: applications, infrastructure, services, and manage-
ment portfolios become the basis for developing plans to support the strategic
intentions.

Management Issues
The two outcomes we look for in Strategic Demand/Supply Planning are:

1. IT resources have a direct and important impact on achieving the company™s
strategic intentions.
2. IT resources are most effectively allocated to meet the company™s strategic
needs.

Without a clear statement of strategic intentions and strategic needs, there
can be no assessment of impact or intelligent resource allocation to high-impact
activities. The key issue is that in many companies, IT management is left to
interpret company strategies from the IT perspective, resulting in initiatives
that deviate from management™s intentions for the business. What is needed is
a process that provides the interpretation, gives IT clear statements of manage-
ment™s intentions, and results in consensus among and between business and IT
management about the company™s directions.
From the process perspective, companies often have not explicitly linked
business strategic planning with IT strategic planning, especially in considering
the impact that IT can have on the creation of business opportunities. The IT
tail should not wag the business dog, but companies do need to understand what
IT can contribute to changing the business model or exploiting the existing busi-
ness capabilities. Companies need a planning bridge that ties together existing
business planning processes with IT so that IT ends up with clear strategic inten-
tions to drive the IT planning activities.
The final management issue again comes back to a cultural aspect of plan-
ning. Not only do we want a process that ties business and IT planning activi-
ties together, but we also want a process that gives business and IT management
confidence that each is understanding the needs and role of the other, and is
focusing on exactly those things that the business needs to be successful. We are
looking not just for new plans, but new understanding.

Process Description
Most IT strategic planning processes start with business objectives and develop
IT strategies that are intended to support them. While these are effective as far
as they go, this process lacks both the context and the opportunities presented
182 PLAN FOR THE RIGHT RESULTS


by the existing IT capabilities and activities. With NIE™s Strategic Demand/
Supply Planning practice, looking at technology alignment relative to the new
strategic intentions identifies business opportunities enabled by the existing
technology base, and technology-enabled opportunity scenarios are introduced
into the business demand part of the strategic plan. See Exhibit 9.12.


EXHIBIT 9.12 The Fundamental Planning Drivers
What is the role for IT
in responding to the
Business Drivers?


IT DEMAND IT SUPPLY

Strategies and

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