Essentials of IT Strategic Planning Research Paper

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IT Strategic Planning Process: Tools and Methodologies

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Organizations are challenged by a continually shifting series of customer requirements, supply chain constraints and costs, compliance and regulatory requirements and for many, drastically reduced time-to-market timeframes for launching new products. Of the many resources an organization has for mitigating the risks of these factors while making the most of opportunities, information technologies (IT) provide essential insight into how operations and performing. IT also provides the system of record for organizations that is essential for making the best possible decision on a given issue in a specific timeframe (Fallshaw, 2000). IT has become so critically important to organizations that the fulfillment of strategic objectives is impossible without it. Organizations find it very difficult, and in some industries, nearly impossible to achieve their strategic plans without having IT tightly integrated into their strategic planning and execution process (Jaana, Teitelbaum, Roffey, 2014). The intent of this analysis is to evaluate the tools and methodologies available to assist in the IT strategic planning process and explain how these methods are used for helping organizations compete and succeed.

One of the most critical components of the IT strategic planning process and a core component that underscores all tools and methodologies is stakeholder management (Lee, Bai, 2003). For any strategic IT plan to succeed, the stakeholder management strategies must have well-defined change management programs and initiatives in place (Fallshaw, 2000). Overcoming resistance to change is critically important for any IT strategic plan to attain its full potential because those most affected by each system, platform or technology change must adopt the new applications and tools as a part of their daily work routines (Fallshaw, 2000).

Background

The most effective IT strategic plans become integral to the main strategic plans of an organization, often supplanting them with the needed data, insight and intelligence. To accomplish this level of tight integration between IT strategic plans and the strategic planning process of an organization, enterprises often rely on multiple tools and methodologies. In evaluating the effectiveness of these tools and methodologies, the role of an organizations; senior management in defining strategic direction and priorities is assessed.

Underscoring the effective use of IT strategic planning tools and methodologies is the need for the Chief Information Officer (CIO), Chief Executive Officer (CEO), and other C-level executives to all agree on a common set of priorities. IT strategic planning tools and methodologies are specifically designed to provide senior management including C-level executives with the opportunity to collaborate, debate and decide on strategic priorities where IT can make the most contribution (Bai, Lee, 2003). Only by aligning the IT strategic plan and the broader strategic plan for the business can senior management hope to compete with greater accuracy, cost control, market and customer insight and speed compared to competitors. With time-to-market for new products being the majority of revenue for many companies, having IT systems designed for efficiently developing new products and delivering a well-orchestrated product introductions can mean the difference between growing profitably as a business or not.

Strategic IT planning tools and methodologies must ensure that technology investments stay aligned with organizational priorities, be fiscally responsible and capable of providing a positive Return on Investment (ROI), and also deliver enhanced IT service levels (Jaana, Teitelbaum, Roffey, 2014). IT strategic planning tools and methodologies are specifically designed to provide senior management with insights into managing the long-term technology investments of a business while also ensuring that service levels are maintained and a foundation is built for future IT needs (Fallshaw, 2000).

Tools and methodologies commonly used for IT strategic planning are often organized into the categories of IT strategic development and IT strategy execution (Fallshaw, 2000). Categorizing tools and methodologies along these dimensions provides for clarity in defining their contributions in each phase of an IT strategy plan that often project initiation, environmental analysis, planning development, integration and implementation (Jaana, Teitelbaum, Roffey, 2014). Project initiation tools and methodologies include defining the charter steering team (Fallshaw, 2000), creating a stakeholder plan that include change management objectives and strategies (Lee, Bai, 2003), defining the IT strategic plan communications strategy and most important, defining the key performance indicators (KPIs) and metrics of how an IT plan's performance will be measured (Jaana, Teitelbaum, Roffey, 2014). All of these tools and methodologies are essential for creating a solid foundation for IT strategic planning to be successful and stay tightly integrated to the strategic direction of an enterprise.

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Senior management must continually be vigilant to the orchestration of these core foundational elements created launched in the initiation phase of a IT strategic plan for the broader goals to be accomplished (Fallshaw, 2000).

Environmental analysis tools include a wide variety of frameworks for aggregating, interpreting and taking action on external opportunities while minimizing the potential impact of risks. Increasingly the cadence of customers is being included in the environmental analysis in the form of predictive analytics of purchasing behavior by technology platform, reliance on cloud and mobile technologies to increase customer service, and greater focus on service responsiveness (Jaana, Teitelbaum, Roffey, 2014). The tools and methodologies used throughout the environmental analysis phase of a strategic IT plan are increasingly being aligned with customer experiences first, as many strategic plans are predicated on delivering gf4reate experiences over just getting more transactions completed. This mindset shift on the part of strategic plans to customer experience is having a drastic effect on strategic IT plans, underscoring the need for greater agility, speed and responsiveness.

Within the plan development phase of the IT strategic plan, the actual document is written with strategic planning assumptions, constraints, risks and opportunities are all categorizes by IT initiative or program. Often during this phase CIOs will use Pareto Analysis to prioritize which projects contribute the most business value to the organization (Fallshaw, 2000). By prioritizing projects by business value, the Internal Rate of Return (IRR) and Return on Investment (ROI) can be calculated accurately and quickly. The majority of IT organizations do some form of Pareto analysis combined with IRR and ROI to clarify and validate the priorities of each project included in their strategic IT plans (Jaana, Teitelbaum, Roffey, 2014). Advanced IT organizations also complete Earned Value Management (EVM) on each of their major initiatives to measure the business value being delivered from their investments in information technologies. All of these tools and methodologies for measuring value are defined in the development phase of a strategic IT plan.

Tools and methodologies used in the integration and execution phases of an IT strategic plan include vetting the plan with each group of stakeholders, financial projections based on the anticipated IT contributions to business initiatives, planned system and process obsolescence based on the new systems and technologies being adopted, and extensive use of metrics and KPIs to measure progress (Jaana, Teitelbaum, Roffey, 2014). Many IT organizations will also begin piloting significant new systems and technologies during this phase, with cloud computing being one of the most pervasive today from a strategic IT planning standpoint. The best-managed strategic IT planning processes build in feedback cycles or processes to continually monitor and manage to a common set of goals and metrics that ensure alignment of strategic IT and overarching enterprise-wide strategic plans.

Topic Analysis

Achieving and maintaining synchronization of strategic IT plans with the enterprise-wide strategic plan of an organization delivers a myriad of benefits, with the most significant being greater agility, speed of execution and increased customer centricity (Jaana, Teitelbaum, Roffey, 2014). In addition to these benefits, tight alignment of strategic plans shifts the emphasis on IT being purely a cost center to being more of an enabler of greater revenue, profit and customer base growth (Lee, Bai, 2003). Of the many tools and methodologies used throughout the phases of creating and implementing a strategic IT plan, the most critical are in the foundational phase as they involve getting stakeholders' buy-in on new initiatives (Jaana, Teitelbaum, Roffey, 2014). By addressing change management at the very beginning of a new strategic IT planning process, senior management can improve the probability of success significantly (Lee, Bai, 2003). Resistance to change is often the most common reason strategic IT plans fail (Fallshaw, 2000). By taking into account stakeholder requirements within and outside the organization first, CIOs are able to streamline each of the following phases of creating a strategic IT plan by making each phase as relevant as possible to those most affected by the new technology, process and system changes (Jaana, Teitelbaum, Roffey, 2014). With change management serving as a solid foundation for the use of tools and methodologies, environmental analysis outcomes and their acceptance is streamline and more efficient (Bai, Lee, 2003). This is especially true of the Pareto analysis, extensive use of IRR and ROI analyses that serve to prioritize each of the specific initiatives included in a strategic IT plan. By having stakeholder support for the.....

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