In my travels over the past two decades, I have noticed the peculiar state of IT Strategy. Some worship at the altar of IT strategy as “it’s all in the strategy”, while others malign it as “the last thing we need is a strategy?"
While these are extremes and a majority of the views are somewhere in the middle, I do believe that the context for IT Strategy is not properly understood. Consequently, its development and implementation misses the mark.
The first step to an effective IT Strategy is to put it in context, i.e. understand its role and scope.
The Role of IT Strategy
IT Strategy sets the direction for an IT organization, just like business strategy sets direction for the enterprise. If this direction is correct then execution against it will result in the desired results, i.e. value creation. If this direction is not correct then the exact opposite will happen.
IT strategy does not say or do anything about the execution that follows in response to it. A good direction with flawed execution will still result in disaster. The blame, as it were, is not in the strategy but in the execution. Similarly, flawless execution in the wrong direction will not result in the desired outcome either.
IT Strategy enables the effectiveness of an IT Organization. IT Implementation defines its efficiency. Consequently, an IT Organization needs both, a good IT strategy and execution, for value creation.
Quite often, we miss this point, and debate the relative importance of IT strategy versus execution. One can understand, if the debate is on relative emphasis i.e. how much time and effort should an organization devote to each? However, pitting them against each other an “either or” equation is counterproductive.
The scope and timing of IT Strategy
There are organizations without a clearly articulated IT Strategy. On the other extreme, there are those that have reams of paper on their IT Strategy – down to detailed calculations of IT ROI for each initiative.
Who has it right? Is one creating more business value than the other?
The effective IT Strategy sweet spot is somewhere in the middle of these extremes. I believe articulating IT Strategy is critical but to a point. Trying to button down IT Strategy beyond that point is not only unnecessary but worse, counterproductive.
The key question then is: where is that point?
The answer lies in two simple facts:
· In a dynamic business world, things change continuously – IT needs to adapt to these changes
· Estimates are accurate up to a point in the future. They become increasingly inaccurate as we increase this time horizon. IT ROI is no different.
IT strategy must be flexible. It should adapt to the changing business “ground realities”. The trick is to understand when! The savvy is in distinguishing between a temporary blip from a fundamental change.
IT Strategy should identify key initiatives to implement it. It is also advisable to quantify the benefits of each. However, if these initiatives go 3-5 years out then the focus of ROI calculations should be on the ones that are within the next 3-6 months. One should revisit this list every 3-6 months and make mid-course correction.
Successful organizations use IT Strategy for direction setting. A strategy is created, continuously monitored and changes made as and when needed. Some other organizations create an IT Strategy and then “just do it”. They revisit strategy every so often. Unfortunately, usually this is when there is a change in leadership - one might argue because of an ineffective IT Strategy?
About the Author:
Sourabh Hajela is a management consultant and trainer with over 20 years of experience creating shareholder value for his Fortune 50 clients. His consulting practice is focused on IT strategy, alignment and ROI. For more information, please visit http://www.startsmarts.com/. Or feel free to contact Sourabh at Sourabh.Hajela@StartSmartS.com.