IT Strategy Research Center

Define Your Digital Business Strategy

A digital business strategy challenges your existing operational and value assumptions. It is a critical means to thrive in a digital-first world and addresses four fundamental goals. Define your digital business strategy by identifying opportunities to digitally transform experiences and create long-term value in an evolving social and digital landscape.

Define a digital business strategy to:

• Digitalize ineffective enterprise tasks, procedures, and processes that are outdated, ineffective, and costly
• Digitally transform organizational structures, cultures, business models, etc. to take optimal advantage of the enterprise tasks, procedures, and processes that have also been digitalized.
• Become a digital business, where more than 66% of all enterprise tasks, procedures, and processes are automated.
• Compete in the digital economy, where more than 50% of all consumer, primary, secondary, and tertiary economic activities are automated.
  

Review Your IT Strategy

The IT strategy is your most important document.

• The IT strategy is the most important document to improve business alignment. Having an effective IT strategy greatly improves all business alignment key performance indicators versus a non-existent or immature IT strategy.

It’s about improvements.

• All IT strategies can be improved over time. The most important value of this exercise is the improvements documented. This is to ensure any current-state document of your IT strategy (if it exists) is taken into consideration as part of your transformation journey.

Identify the Strategic Objectives of the Business

Context is vital to strategy.

Understanding the environment that your business operates in is critical to strategy development. The business context encompasses an understanding of the factors impacting the business. Your business context should guide your strategy and drive the actions you take.

Understanding the business context is a must for all strategic initiatives. At its core, each digital and IT project requires answers to a specific set of questions regarding the business.

Understand the nature of your organization, competition, and environment.

Learning what your competitors are doing to grow their bottom line is key to identifying how to grow your own. To successfully uncover your strategic objectives, your business context must consider organizational, industry, and environmental context.

Make Data-Driven Decisions

Diagnostic data is the key to building a data-driven strategy. Take a retrospective approach to measure business value realized from last fiscal year’s strategy and initiatives. Focus on IT’s successes and improvements made and communicate them back to the business. More importantly, collect the right data to conduct a current-state analysis to make data-driven decisions on what matters most for the upcoming strategy. Consider these three perspectives for making data-driven decisions.

Understand Your Mandate:

• Establishing an alignment between the CEO and CIO means IT stays on track with the CEO’s vision for the future of your business.

Align Your Stakeholders:

• Measuring the business’ satisfaction with IT’s services means you can use these insights to understand your key business stakeholders, find out what is important to them, and improve your interactions with them.

Evaluate Your IT Team:

• Improving your processes means that you spend less time fighting fires and more time delivering exceptional business value

Identify Your Strategic Initiatives

A CIO has three roles: enable business productivity, run an effective IT shop, and drive technology innovation. Your key initiative plan must reflect these three mandates and how IT strives to fulfill them.

Business support initiatives must be directly aligned to business context outputs.

• A forward-looking approach to supporting the business involves identifying the right capabilities that can underpin the coming year’s corporate projects.
• A retrospective approach to supporting the business involves a focus on improving IT’s maturity and stakeholder satisfaction as measured over the past year.

To reduce risk and improve IT operations, identify the most-important and least-effective processes to evolve.

• A current-state analysis approach to improving IT operations involves a focus on identifying the importance and effectiveness of our core IT process in the current state.

An industry-focused approach to driving technology innovation enables IT to look beyond what the business currently needs from us and take a proactive approach to how IT can propel the business forward and offer the company a competitive advantage.

Visualize Your IT Strategy

Audience matters

• The audience of your IT strategy will determine its effectiveness. Cater improvements in your IT strategy to the nuances that your audience members would like to see.

If you don’t communicate it, it doesn’t exist

• Simple, appealing, and inspirational communication makes for an effective IT strategy that shows improvement in all business alignment key performance indicators versus a non-existent or immature IT strategy.

Ruthlessly prioritize what to communicate

• Understand the six key components of an effective IT strategy presentation that result in accurate and relevant communication to business stakeholders.

Build Your Functional IT Roadmaps

Functional roadmaps will augment your strategy with tactical projects and outline the time, duration, effort, and resources required. The strategy team is accountable for building these roadmaps, while functional leaders are responsible for executing them along with their teams.

Identifying the different functional areas within your IT organization and their respective leaders will help determine how each key initiative will impact your teams and the work involved for each team. This level of rigor and discipline to project planning can be beneficial to your team’s success in supporting strategic initiatives.

Improve IT Governance to Drive Business Results

Strong governance is key to executing on what is important on your strategic plan and keeping your team on track.

There are four elements of the governance framework:

• Risk: Setting risk standards, appetites, profiles, exposure, and risk mitigation.
• Project Portfolio: Decision making on the planned portfolio of strategic programs, initiatives and services.
• Organization: Resourcing (time, effort, money).
• Information: Data and other information to be governed for strategic priorities.

There are four attributes to govern each element of the framework:

• Structure: Structural relationships are shown by mapping the connection between committees.
• Authority: Each committee will have a purpose and area of decision making that it is accountable for.
• Process: The process includes inputs, outputs, and activities required for the committee to function.
• Membership: The individuals or roles who sit on each committee. Consider members’ knowledge, capability, and political influence.

Build Your IT Budget

Your audience won’t understand the value of IT if you can’t communicate the benefits. An IT budgeting process must contain adequate measures to capture and communicate the benefit of IT investments. This begins with the collection of data and ends with effectively presenting the benefits IT investments will have for the business.

Identify the incremental cost of each strategic initiative:

• Labor costs: What are the ongoing and new costs associated with the IT staff who perform work?
• Systems costs: What are the costs associated with purchasing, developing, integrating, or maintaining any new systems or applications?
• Contracts costs: What are the costs associated with contract workers and consultants as well as vendors for software, hardware, and other services?

Identify the breakdown of capital and operating costs for each major key initiative plan category (business support, IT excellence, innovation):

• Capital costs: What are the new costs incurred to buy things and acquire new IT assets?
• Operating costs: What are the costs incurred to run the IT organization and are related to the provision of services?

Review Your Functional Strategies

It’s about improvements.

• All strategies can be improved over time. The most important value of this exercise is the improvements documented. This is to ensure any current-state document of your functional strategies (if they exist) is taken into consideration as part of your transformation journey.