Monday, June 20, 2011

Why is IT Strategic Planning Important?

In basic terms, strategic planning can be defined as the process of defining business strategy, or direction, and making decisions on allocating resources (capital and people) to pursue this strategy. In the case of information technology this definition is more aptly described as the process of defining your IT strategy and making decisions on IT investments that support the business strategy. The “business strategy” in this case is your organization’s strategic plan. An IT strategic plan therefore becomes a critical factor in successfully achieving the organization’s mission and vision. Given this importance, the implications of not having an IT strategy are many, but typically result in the following situations: (1) IT investments are made that do not support organizational goals, (2) systems are not integrated, typically resulting in a duplication of effort, (3) there are no means for setting priorities for projects or resources, (4) projects are evaluated on a financial basis only, and (5) there is the constant disconnect between IT and the user community.

As CIO, you have the primary responsibility for creating, communicating, and implementing a vision that identifies how technology can be used to support these priorities. CIO Magazine's 2008 State of the CIO report found that nearly 60% of CIOs surveyed say long-term strategic thinking and planning is the executive leadership skill most critical in their current role, followed by collaboration and influence (47%), and expertise running IT (39%). This new reality has forced technology departments to operate more as a strategic business partner as opposed to a traditional functional unit. Accordingly, CEO's now look to their CIOs to: (1) ensure that their annual investments in technology are being effectively leveraged to achieve the strategic goals of the business, (2) evaluate and recommend new or existing technologies that reduce costs and offer business value, and (3), ensure that the organization does not overextend its dependence on end-of-life technologies. As a result, the development and implementation of an IT strategic plan is critical. The purpose of this blog is to share experiences and details regarding the "best practices" in bringing this plan to fruition.