by Compellent Technologies, — April 20, 2010
Presented by Ellen Kitzis, VP of Research, Gartner
IT leaders at midsize enterprises sometimes have trouble focusing on developing a data center strategy. Their basic business strategies may only change infrequently, due to the time and effort needed to develop these strategies and the fact that they pull attention away from the day-to-day operations of the business. However, an integrated business and IT strategy ensures that these enterprises can clearify the links between business goals, the proposed IT environments, business value and how the IT organization will close the gaps in performance capabilities for execution.
8:46 – IT strategy is an area that most CIOs will do anything to avoid. They’ll work on projects, analysis, budget returns, anything! But for strategy to be successful, it needs to be tied to the business. We’re going to break down the fears of tackling strategies and look at different approaches to it.
8:47 – IT is no longer just an enabler. It’s a key part of the business. Strategy ensures that companies either keep up with or get ahead of the business in terms of the capabilities it requires to be successful.
8:49 – Good strategic planning is critical to business results. CEOs want to make the enterprise more agile and more cost-competitive to take advantage of market opportunities and leverage their enterprise’s strengths, and also to be ready to respond to threats before they have a devastating effect on a business.
8:51 – There are benefits from an integrated strategy. For one, the company knows that IT has the same goals and objectives as the organization. The last thing you want to be is the CIO sitting at the table that says, “We’re just not ready for this new project.”
8:54 – Integrated planning is critical to optimizing the enterprise’s investment strategy. Day-to-day operations are about doing things right; strategy is about doing the right things.
8:56 – IT strategy is poorly understood in most enterprises. Some reasons are that macro and micro environments are uncertain, plans are not realistic relative to how the business is run, or stakeholders aren’t interested in or trusting of IT. Strategy also has to overcome the fact that strategy doesn’t necessarily impact the day-to-day operation of the business.
8:58 – Many strategies are simply not doable in certain organizations. Some clients ask for examples of strategies, but no example is perfect for every company looking to develop their own strategy.
9:02 – Many CIOs in midsize organizations find themselves shortcutting the strategy process. But when you look at the role of IT in an organization, it’s easy to see just how important it’s become, and how evident the need for an effective strategy is.
9:04 – IT strategy must be focused on business success. Apple is a good example of a company with a successful product strategy, because they’re relentlessly focused on product leadership, and all assets and resources are strategically aligned on the same goal.
9:07 – Airlines used to work on the basis of customer intimacy. Now, airlines are focused on operational excellence.
9:09 – The first question for CIOs is, “What differentiates my company in the marketplace?” and the second question is, “Does my IT strategy support this differentiator?”
9:12 – IT brings a lot to the table when the company is in a planning phase. Businesses will often reject a strong roadmap because they don’t know IT will support it.
9:13 – Too often, CIOs go into board meetings and simply listen, without contributing. If they’re going in just to listen, they should just send a tape recorder. CIOs should come into these meetings with ideas about technologies that improve what the company does and find ways to better support the business. But before CIOs go into that meeting, they should spend time with their team to brainstorm – they’re the ones getting their hands dirty, they have good ideas – and plan to contribute in a meaningful way at these meetings.
9:16 – Companies need to ensure that the plan IT develops maps the operational plan of the business. Once CIOs work with the CEO, COO, etc., the plan needs to be updated every six months, on a rolling basis. It’s a constantly evolving, living process.
9:18 – Very often, funding is considered a separate part of the strategic process. However, it should be included so that the CFO can see the expected impact of the investment.
9:20 – As companies expand globally, they need to find new ways to acquire assets, and consider a new cost basis for these assets.
9:21 – CIOs should keep strategies brief and balanced. The following questions should be considered:
- How will we win, and how will IT help?
- How will we encourage strategic decisions and behaviors?
- How will we evolve IT supply and capability?
9:27 – There are ways to make the strategic plan allow for creativity. Many times, the plan fails to produce alternative options. Scenario planning can help with creating agility in the strategy. There needs to be enough flexibility in the IT decision-making process to adjust as time goes on and goals are tweaked.
9:30 – In 2008 and 2009, many organizations had plans for growth scenarios, but no plans for contraction. This type of planning forces CIOs to ask themselves, “What if…?”
9:31 – A bad question for a CIO to start with when speaking with the board or executive team is, “What do you need from IT?” They don’t know! CIOs should ask questions about how quickly the company wants to enter new markets, what the organization will need from the IT infrastructure, and other questions that draw out the more detailed goals of the organization.
9:35 – Beware that strategy must be linked to other processes, like portfolio management, budgeting, risk, governance, etc.
9:39 – CIOs should use strategy as a process, but also as a repository of information. Remembering processes will make future planning and strategy development easier and more streamlined. CIOs would also do well to integrate themselves as early in the process as possible.