IT STRATEGY

The Definitive Guide to Developing an IT

Strategy and Roadmap
Today every company is a technology business or at least a technology-
enabled enterprise.  The pervasiveness of IT across all facets of business
makes it a strategic imperative for creating an effective IT Strategy
(Information Technology Strategy) and Roadmap for an enterprise.

Given the criticality, creating an IT Strategy and building an IT Roadmap

should be a focus area for every CIO (Chief Information Officer) and senior
technology leadership.

In this definitive guide to developing an IT Strategy and Transformation

Roadmap, we will dive deep into all facets of creating the IT strategy
document including why an IT strategy is necessary, what an IT strategy
document is, how to develop an enterprise IT strategy, and more importantly
how to execute on the plan and measure success.

In most large companies, creating an IT Strategy and Roadmap is an annual

ritual, and several teams and individuals allocate a significant amount of time
creating pretty IT Strategy PowerPoint documents.   In fact, in our experience
of working with several firms in drafting IT strategy and Roadmaps, what we
feel is many of the IT Strategy documents are an aspirational exercise full of
highfaluting goals and strategies, most of which don’t see the light of the day.
So, how do you craft an IT strategy (or technology strategy or IT Strategic
Plan), in a way that is not only cohesive and compelling but also actionable?
Please read on.

The Definitive Guide to Developing an IT Strategy

and Implementation Roadmap – Topic Outline
What is IT Strategy?

How to Create an IT Strategy: The Strategy Development Process

Components of the IT Strategy

Best Practices for building an IT Strategic Plan

What is IT Strategy?
A definition of what IT Strategy means in the enterprise context.
IT Strategy (or IT Strategic Plan or IT Transformation Strategy and Roadmap)
is a comprehensive blueprint of a) how an enterprise IT team supports the
business objectives and operations with optimal technology solutions and b)
an operating model outlining how IT departments run its own business.

It is essential to understand the nuance of CIOPages.com definition of IT

Strategy as it drives the components and contents of the IT strategic planning
exercise.

For obvious reasons, information technology is an enabling force that powers

how an enterprise conducts its business operations.   In this role, the
technology strategy is primarily an outline of how IT intends to support
business goals and strategy.

The second facet of an effective IT strategy and roadmap is how the IT

department operates and minds its business.   For example, what type of SDLC
process to use, what is the structure of the IT organization, how does
enterprise architecture play a role in defining and enforcing standards, and
how the IT department hires, trains, develops and manages its workforce.

In most companies developing an IT, the strategy is an annual exercise, and it

consumes significant time and poses a burden on operating teams.   Instead, we
suggest a five year IT strategy blueprint in conjunction with an annual
refresh.  While five years is a long horizon in the evolution of specific
technologies and their obsolescence, the IT strategy itself should have a
sufficient time horizon for stability and continuity.  For example,
rearchitecting and re-platforming the backend transactions processing engine
may be a multi-year endeavor.  Or a plan to upskills IT workforce is typically
not a one-year exercise.
How to Create an IT Strategy and Roadmap?
The Steps and Process of developing an IT Strategy and Execution
Plan.
When companies develop IT strategic plans without a transparent process,
they tend to be more of an exercise in razzle-dazzle rather than a reflection of
the reality and ways to bridge the gap between current and target state.   We
suggest a simple but effective process to define an IT strategy and document
the plan.
The IT Strategy Development Process:
 Brief Summary of the Components of the IT
Strategy Development Process:

 Assemble a cross-functi onal team: The actual strategy must be the

responsibility of the CIO’s offi ce. However, while executi ve involvement
and leadership are essenti al to developing an eff ecti ve informati on
technology plan, several perspecti ves must be a part of the process.

The strategy development team must have representation from or at least

perspectives of the following areas:

Technology Leadership: A senior IT executive who can provide the

leadership viewpoint.

Enterprise Architecture: An enterprise or business architecture leader to add

a structural lens to the strategy.

Data and Information: Today, data is the lifeblood of any organization, and
hence, a key leader from the CDO (Chief Data Officer) organization is critical
to the drafting of any technology strategy.

Application Development and Integration: Leaders in the core coding,

testing, and release areas should be a part of the team to add color from the
trenches.

IT Program and Project Management:  Thoughts from the folks who herd
the cats and keep everyone in line.

IT Methods and Practices: Whether it is DevOps, or Agile, or some other

SDLC practice, the teams that work on tools, rules, best practices, and
methods will add tools and a methodology perspective.

Business Stakeholders: Business stakeholders can represent the other side –

the receiving side – of the equation and having their participation will help
not only make the strategic plan better but enhances the buy-in.
 Understand the future Business Strategy
Needless to add, IT exists to serve business (and of course, sometimes the
business itself is IT), and hence technology strategy should dovetail into
business goals and strategy.

Ideally, the technology teams must have representation and voice in the
development of business/corporate strategy.

Irrespective, for building an actionable IT strategy, it is imperative to

understand the nuances of the business strategy over the next several years.  
 The essential elements are what are the business goals and objectives, what
does the product/service portfolio look like, growth strategy and market focus,
and the strategies to power the business vision and realize the goals.   Ideally,
a business target operating model, if one exists, will provide the breadth and
depth of details necessary for the technology teams to draft the IT strategy.

Assess the current state of IT

Taking stock of the state of affairs in the technology realm is a critical step in
the IT Strategic planning process.  Whether it is an in-depth assessment or a
cursory review will depend on the maturity of the IT department. A
comprehensive evaluation may be necessary if the enterprise is embarking on
a significant transformation. In a steady state, a simple review will suffice.

The common areas to address in a current state IT assessment:

 Capabiliti es and level of technology enablement : Ideally, if your

company has defi ned an enterprise business capabiliti es map, you can
leverage Level 2 or 3 to create a heatmap of the level of technology
support for each capability.
 The maturity of IT processes: Here we are not discussing the
business processes, but the IT processes – whether it is IT service
defi niti on, case management, and issue resoluti on, the SDLC (Soft ware
development lifecycle), and applicati on portf olio rati onalizati on.   You
may use a standard CMM maturity model or a derivati ve.
 Portf olio Analysis (Systems, Services, Platf orms, and
Applicati ons): What are the state of the IT landscape and the applicati on
portf olio? An applicati on portf olio analysis is evaluati ng the
 applicati ons/platf orms/systems on a variety of dimensions such as
business value, architecture compati bility, technical health, the cost to
maintain, and factors such as stability, scalability, extensibility, and
interoperability.
 Methods, practi ces, systems, and tools: What types of tools do the
IT department use? What are the methods, practi ces, and policies are in
place? Are they impeding the intended goal? An objecti ve analysis will
reveal the chinks in the IT armor.
 Structure and IT Operati ng Model: The departmental structure and
the operati ng model (which is a more extensive global set of how IT
works) are a crucial enabler or disabler – depending on the impact. Is the
technical team structured to meet the business objecti ves? Are the
teams organized around a construct of “IT Product Model” or
“Capability-centric” model or is it purely applicati on/functi onal
oriented?
 Talent and Skills: At the end of the day, it is all about people and
their caliber, capacity, and commitment. A competency and skill analysis
will reveal gaps, parti cularly as they relate to the future state.
 Infrastructure: How far along is the enterprise with regards to the
march to the cloud, adopti on of concepts like SAAS, PAAS, and IAAS?
 Security, Stability, and Performance : The PQRS (Performance,
Quality, Reliability, Scalability) are fundamental to operati ng smoothly
and without a solid foundati on, talk about highfaluti n concepts and
breakthrough technologies will not resonate with the business audience.
 Governance: Governance is a delicate balancing act. Too much of
it sti fl es progress.  Too litt le of governance will result in compromises
and shortcuts, which will come to haunt the IT team in the long-term.

Scan external factors and technology trends

What is happening in the external world has tremendous implications for any
company’s technology strategy and implementation efforts.

What technologies are showing promise, beyond the initial hype cycle?  For
example, is RPA (robotic process automation) the right way to automate
processes? Are there use cases where machine learning can add value?  Does
Blockchain have relevance and resonance? Are VR (Virtual Reality) and AR
(Augmented Reality) appropriate for your industry?
What are the competitors doing in terms of their technology investments?   In
addition to any specific competitive intelligence, you may also rely on analyst
reports on top agenda items on the CIOs docket and the budget allocation to
various solution areas and technologies.

How are vendor products (both the horizontal and vertical solutions)
evolving? Today, vendors, including the many startups, are developing
innovative concepts and technologies in various facets of B2B (Business to
Business) space.  Keeping abreast of the vendor landscape is critical to allow
the enterprise to make, buy, build, acquire type decisions.

What is the resource availability which will impact location strategy and
sourcing strategy?

Today information technology workforce is younger, mobile, and global.  

Depending on the types of technologies, and level of expertise, enterprises
need to come up location strategies that go beyond a large campus in the
headquarters location.

All these external trends information is valuable in influencing and shaping

the enterprise technology strategy.

Envision Future State of IT

A full-fledged future state envisioning may not be essential for an annual
refresh but is a foundational endeavor for a 3-year or 5-year technology
strategy blueprint.

Remember, a target state is not a linear progression from the current state.
While the sequencing and progress may be incremental, the envisioning
exercise needs to rethink and re-imagine the art of the possible.

To honestly think from a blue sky perspective, it is essential to unencumber

our thinking and feeling to the current state.  The moment we are mired in the
problems of today, going beyond the myopic view of the immediate and
envision a new target state is awkward.  Hence, anyone who participates in the
future state envisioning needs to be open-minded and imagine the future on a
clean slate.
Companies conduct “Future State Envisioning Workshops” to facilitate the
collective brainstorming and development of ideas. Here are a few best
practices for conducting an envisioning workshop.

Future State Envisioning Workshops: Best Practices

Do’s                                                                                                   Don’ts
Conduct a Gap Analysis
The gap analysis between the target state and the current state or the gap
between the point of departure and the point of arrival provides the magnitude
of the task ahead of an enterprise to achieve the goals and objectives.

The gap analysis needs to be on multiple dimensions – people, process,

technology, data, and governance – to address the shortcomings holistically.

Since we are crafting an overall IT Strategy and Roadmap, the level of gap
level is more at a conceptual level, rather than at a feature/function level.

A typical gap analysis is multidimensional and allows for teams to leverage

the findings in the future for a deep dive.

Analyze Scenarios and Strategic Options

Of course, legacy enterprises cannot easily erase the past and start anew. So,
as a part of the gap analysis, one can evaluate the strategic alternatives and
solution options within the cost, complexity, and value equation will help
temper the sci-fi fantasies and be pragmatic in the implementation roadmap.

It is crucial to evaluate the strategic options objectively.  For example, a

technique like Scenario Analysis  may help visualize different scenarios and
plan for various alternatives.  Royal Dutch Schell pioneered the scenario
analysis technique and is useful for understanding the multiple situations and
implications of decisions.

Each company will need to determine the composition of its portfolio of

initiatives.   A classic McKinsey framework, the Portfolio of
Initiatives  allows you to position your efforts on a spectrum of risk and time
horizon.

McKinsey Portfolio of Initiatives Framework:

 McKinsey
elaborates on how to apply the Portfolio of Initiatives framework.

“To apply the portf olio-of-initi ati ves approach, companies must take three
steps: undertake a disciplined search for several initi ati ves that provide high
rewards for the risks taken; monitor the resulti ng portf olio rigorously,
reinvesti ng in successes and terminati ng failures; and take a fl exible,
evoluti onary approach that allows for midcourse correcti ons. The resulti ng
strategy, like a conscious form of natural selecti on, identi fi es the strongest
initi ati ves and sheds the rest. The increasing uncertainty of today’s business
environment and the importance of balancing risks with rewards make the
portf olio-of-initi ati ves framework more relevant than ever.”
Craft IT Strategy Blueprint (preferably for 5-years)
After the gap analysis and the exploration of the strategic alternative, the team
formulating the technology strategy and future game plan will be in a position
to draft the IT strategy pillars. These are typically 4-7 things that an enterprise
IT team may embark on to achieve the set objectives and reach the point of
arrival in the future.

While seven is not a magic number per se, anything more, particularly in
double digits, will make it unwieldy and seem like a laundry list.   It will
dissipate the focus and attention.

The strategy pillars typically span the following areas. However, each
company is unique in the state they are in and the quantum of transformation
necessary to get to the next level.

Typical IT Strategy Pillars encompass:

 Any change in vision or mission (or defi niti on of a new purpose)
 Embracing any emerging technologies to shift the paradigm
 A perspecti ve of future state IT operati ng model
 Adopti on of new Methods, Tools and Frameworks
 Re-engineering of IT Services and Processes
 Structure, Staffi ng strategy and skills, and competency
improvements
 Vendor Strategy and Build/Buy/Outsource preferences
 Governance matt ers

Define IT Operating Model

Target operating model  (TOM) is a blueprint of a future vision which aligns
strategic priorities and the operating components.  An IT operating model is a
subset of an overall target operating model. The IT model defines how the
information technology department will harness and support the business
objectives as well as how IT runs its own “business.”

In today’s digital and cognitive world, it has become a strategic imperative to

redefine what’s next and then organize to meet the needs of the target state
with a sound IT operating model.

IT Operating Model: A Conceptual View

Analyze IT initiatives and Prioritize based on Value,
Cost, and Complexity
At this stage of the IT Strategy, strategy meets execution, and hence, this is an
important step.   From an understanding of the business goals, one derives a
set of IT priorities, which in turn culminate into a set of strategies and an
operating model.

Now is the time to define and analyze the IT initiatives that support the path
toward achieving the business and technology goals.

Each initiative should have a direct impact on each of the strategic objectives
and have a measurable outcome.

It is a best practice to decompose each initiative into an IOP (Initiative on a

Page).  A typical initiative one-pagers includes information such as the
following:

Initiative on a Page Content Outline:

 Initi ati ve Descripti on
 Initi ati ve Goals and Objecti ves
 Scope
 Approach
 Key Projects and Programs
 Cost
 Impact Areas
 Timeline
 Summary of Business Benefi ts
 Risks, Assumpti ons, Issues, and Dependencies
 Key Performance Indicators

 
Detail out Implementation Roadmap
The implementation roadmap or strategy realization roadmap is fundamentally
a way to sequence high-level initiatives to support the strategic game plan.

At this stage, these are not detailed project plans, but a path toward the North
Star.   A typical implementation or strategy realization roadmap comprises of
initiative names, high-level cost numbers, tentative timelines, and a sequence
to balance the cost, capacity, immediacy, and business value.

Socialize and secure buy-in from stakeholders

This portion of the IT Strategic Plan is all about ensuring buy-in. Typically,
IT executives do roadshows to critical stakeholders and present them the game
plan.  After incorporating the feedback, a typical IT strategy and
Implementation Roadmap is finalized.

Assign Success Metrics

So, after spending all that money, time, and effort, what does it buy us?
Assigning key performance indicators and success metrics to the technology
strategy will help provide accountability and transparency.

The standard metrics may span qualitative and quantitative depending on the
areas.  For example, if lowering attrition is a goal, then IT execs assign a
percentage on how much reduction they are aspiring.

The metrics span operational, delivery, strategic, and support areas.

Monitor, Measure and Refine IT Strategy on an

annual basis
Assuming you are creating a 5-year or a 3-year IT strategy, then a yearly
refresh or a rolling 3-year plan will be a great way to course correct.   As
economy changes, technology revolution accelerates, enterprise IT Strategy
cannot remain static.
 Hence, a periodic refresh that accounts for changes in both external factors
and internal matters is a critical success factor.

Best Practices for developing an IT Strategy

and Realization Roadmap:
 Involve criti cal stakeholders, parti cularly from the business.
 Craft an IT Strategic Plan that is acti onable.
 Avoid using language and terms that are not common lingua franca
in the company.
 Even if you hire a consultant or consulti ng fi rm, ensure the IT
strategy does not fall victi m to “Not Invented Here” syndrome.
 While details may be fi lled out by various teams, the core strategy
development must be led by CIO or his/her designees.
 Every strategy pillar must support organizati onal goals.
 While blue sky envisioning is necessary for future state
envisioning, the implementati on plan should refl ect current realiti es and
constraints.

There you have it. Now, go ahead and create your enterprise technology
strategy and implementation plan. If you need help in building a compelling
IT Strategy and Roadmap, please contact CIOPages.com consulting services.