What is IT Strategy
IT Strategy (Information Technology Strategy or Technology Strategy) is a plan of action to create an information technology capability for maximum, and sustainable value for an organization.
Let us explore this simple definition of IT strategy a bit more.
- IT Strategy creates IT Capability
- The product of an IT Strategy is IT Capability. IT Strategy creates - modifies, aligns, changes - IT Capability not just "technologies" or "systems" as some have implied
- However, this IT Capability is a means to an end: value
- IT Strategy's objective is value
- The end or objective of an IT Strategy is to create value - shareholder, or stakeholder or business value
- This objective is not met unless we "maximize" value i.e. use the least amount of resources, and risk to create the most returns
- This objective also requires that this value is "sustainable" - short term or "ephemeral" value is not the objective of a strategy. On the contrary, it symbolizes a failure of strategy
- Often, the term competitive advantage is used instead of value. Competitive advantage does create value but it does not encompass all means of business value - new market entry, process efficiencies etc. deliver value without competitive advantage
- IT Strategy exists by definition i.e. it may not be documented in the actions of an organization
- IT Strategy uses an iterative process to create and align IT capability with business requirements:
- It is a process not a point in time event
- It is iterative - success comes after multiple - do and learn - cycles
- The key is the alignment of business and IT capability rather than designing IT to address business requirements
- The former assumes that both capabilities drive each other
- The latter assumes that business drives IT and not vice versa
- IT Strategy sets direction for IT function in an organization
- Ensures that maximum IT dollars are spent on value creation activities for the business
- Ensures that these dollars create the maximum value
This leads us to some very important questions which will remain unanswered for the purpose of this article:
- If a strategy does not create value is it not a strategy?
- How much value must a strategy create to be called a strategy?
- What is the difference between strategy and tactics?
IT Strategy and Corporate or Business Strategy
IT Strategy is analogous to business strategy - from the objective to the process these two share a common logical framework with the differences manifesting themselves in the specifics of implementation.
Business IT Alignment, in part, aligns business strategy with IT strategy or vice versa. As discussed, business technology alignment is more than that as it is the alignment of business capability with IT capability.
IT Strategy is often included as part of the business strategy. Before IT strategy developed as a discipline, business strategy process was extended to include technology implications and the business strategy document became the de-facto home of IT strategic plan as well.
Today, however, the CIO prefers to create their own IT strategy team, follow their own IT strategy process, and communicate the strategic plan for their organization through a separate IT strategic plan document. Given the complexity of modern day business, technology and the IT organization, this arrangement does provide optimal value for both the business and IT.
However, an IT strategy cannot be developed in isolation so the IT strategy development team must comprise of business and IT people. The initiative must have both business and IT sponsorship. The recommendations must be bought into by both sides of the aisle. Business strategy and IT strategy processes must be closely coordinated.
In general, there is a single logical process, organization, and communication document for business and IT strategy. The boundaries are a way of splitting work not responsibility. The delineation is simply done to facilitate delivery and nothing else.
Business IT Alignment
IT Strategy aligns IT Capability with Business Capability or vice versa. Also known as business IT Alignment or aligning business with IT (information technology) or business technology alignment this process is often misconstrued as: "align business strategy with IT strategy." Strategy is a component of both business capability and IT capability. However, there are other equally important components such as organization and process. A focus on strategy alone loses the critical impact of the other components on business value. Consequently, we must consider ALL the components of business and IT capability not just strategy.
The order of these words causes confusion as well. Business drives IT - so business IT alignment makes sense. However, increasingly, technology drives business and that meaning gets lost with this order of words.
IT Strategy Process
IT Strategy does not have to follow a specified series of steps and often does not. Different situations demand a different starting and ending point and the steps in between. However, the critical elements of an IT Strategy process are:
- Business Drivers: what is prompting a change in business and/or IT capability? (and, by definition, IT Drivers)
- Business Imperatives: what must be done to address or respond to these business drivers? (and, by definition, IT Imperatives)
- Business Capability Implications: what does the implementation of these imperatives do to the business capability (and, by definition, IT Capability)
IT Strategy process can be summed up as a series of steps that determine each of these three critical elements of an IT Strategy.
IT Strategy Framework and Methodology
The creation of an IT Strategy is facilitated using a framework or methodology. IT Value Mapping is a business focused IT Strategy Framework.
View articles on IT Strategy process .
IT Strategy Template
An IT Strategy Template identifies the form or pattern of minimum required, standard elements in an technology strategic plan. An IT Strategic Plan Template can be used as a starting point to guide the creation of a strategy and plan document for an IT organization accurately.
This IT strategic plan template provides a business focused outline for a technology strategy document.
The typical structure or outline of a (IT) technology strategy includes the following:
- Executive Summary - This is the first section of a technology strategic plan presentation which provides a summary of the drivers, imperatives, and implications of an IT Strategy. The purpose is to get buy-in of key stakeholders and the IT Organization
- IT Vision, Mission, Strategic Objectives or Goals - This section of an IT strategy document answers a simple question for the audience: why are we changing IT Capability?
- (External and Internal) Analysis - This section of an IT strategic plan document provides the rationale for change i.e. there is a reasoned imperative for the actions that we are about to discuss. The discussion includes key external IT Drivers and Critical Success Factors and common frameworks such as 7 Forces Model and SWOT analysis
- IT Plan - this section of the document provides a high level overview of the prioritized IT Initiatives and how they support the drivers and imperatives identified above
- IT Roadmap - This section of the IT strategy document provides a map of the journey ahead i.e. key deliverables and milestones
- IT Governance - the governance section details the monitoring and control mechanisms used to ensure delivery of value through this IT strategy. IT Stage-gates are detailed in this section but it also includes organizational roles and responsibilities related to the IT strategic process
- IT Capability - this section provides a high level overview of the "to-be" IT Capability. What does the picture look like when we are done? A connection must be established to the key drivers through the key initiatives being undertaken
- IT Metrics - this section of the strategy document answers the questions: how do we know we are on track? how do we know we are done? how do we know we were successful?
IT Strategy and IT Governance
IT Strategy promises value. IT Governance ensures its delivery.
For a detailed discussion, please refer to this article on the relationship between IT strategy and governance.
IT Strategy and Enterprise Architecture Planning
Enterprise Architecture Planning is a critical input into, an enabler and a driver of IT strategy:
- EA describes "as is" and "to be" IT Capability
- EA converts logical IT capability into its physical form
Please refer to this diagram (shown above) to see the connection between IT strategy and Enterprise Architecture Planning.
IT Strategy Presentation
IT strategy presentation communicates the benefits, process, plan, governance, and outcomes of a technology strategy and transformation initiative.
Perhaps, the single most important factor in the success of an IT strategy - and by extension the CIO and the IT organization they lead - is the IT strategy presentation - and all communication related to the strategic planning process, and its outcome.
IT strategy presentation is a key communication tool for the CIO. This presentation helps get the buy-in of the stakeholders, peers, and the IT organization through:
- IT strategy presentation explains the benefits of an IT strategy
- IT strategy presentation details the IT strategy journey or process
- IT strategy presentation discusses the outcomes from an IT strategic initiative
Consequently, if an IT leader knows what they are doing, why they are doing it, what are the steps they are following, and how will they measure success or failure, making an IT strategy presentation easy and straightforward. Some CIOs fail in this presentation on IT strategy because they do not have an IT strategy to communicate so they disparage strategy and presentation as "ivory tower" or "who needs strategy." Some others think that an IT strategy presentation is a list of initiatives or budget highlights.
IT Strategy Examples
View articles on IT Strategy samples and example documents .