10 Steps to Develop an IT Strategy

I have been looking for a good guide in the Internet for steps in developing an IT strategy. I found many of them out there, but they either miss the important, or elaborate on one step in the expense of others. So, I have decided to pull together a comprehensive list of important steps someone needs to walkthrough in order to develop an IT strategy. So, here they come:

1. Develop Charter – to get initial agreement on planning

A charter is a great tool of debate and agreement. Before you spend a great deal of time in developing an IT strategy, it is worth agreeing on and justifying the effort. Also, a charter serves as a proposal of an project you’re planning to conduct, and will be a great tool to sell the idea to the CIO, and the overall organization.

A typical IT Strategy Charter answers the following:

  • Objectives: why are you pursuing this exercise? and what kind of background work has already been conducted that could possibly contribute to it?
  • Critical Success Factors: what are the rules of engagement? what are the make-it-or-break-it conditions for a successful development of your IT strategy?
  • Scope: to clarify and limit activities and coverage of the IT strategy. You could scope the deliverables, scope the process, or scope according to available data and capabilities.
  • Governance: how do you plan to run your planning process, and what people and team structure you need to establish? what is the rhythm of collaboration that facilitate the planning exercise?
  • Methodology: are you going to refer to a framework to guide your activity? and which process (relevant to strategic planning) are you proposing to follow to reach your goal (apparently the 10 steps in this post!)?
  • Deliverables: describe the expected deliverables and link to methodology/process above.
  • Timeline: of your strategy development process reflecting dependencies and durations.
  • Budget: what funding and resources do you require in order to conduct the planning exercise? Remember, your charter is a selling tool, so make it concise and value-emitting.

2. Capture the Business Context – vision, mission, values, and strategic goals

A critical success factor of your IT strategy is to mirror and align with the business. In this step, you need to capture (or create) a crisp understanding of the business that IT serves. You usually do that be reviewing the business strategy, which typically contains the following elements:

  • Vision of the organization
  • Mission/Purpose
  • Values that govern the souls and activities of its people
  • Strategic Goals: usually arranged in focus areas or themes.
  • Strategic Initiatives: detailed programs and projects that the business is planning to execute in order to achieve its vision, mission, and goals.

These elements will enable you to build IT’s version of vision/mission, and understand the implications of business strategy on IT (via analyzing the strategic goals and initiatives).

3. Develop IT Mandate: Vision, Mission, and Objectives

Although might not be required, but we as IT people love to tailor everything to our likings. In this step, you can technologize the organization’s vision and mission, and state your high level goals or objectives. I love to call this IT mandate, as it really all about what we aim for, what purpose we serve, and what governs our activities.

Someone could expand this step to state all possible guiding principles that govern our choices; An area where Enterprise Architecture is very concerned about.

4. Define Critical Success Factors – or rules of engagement

The play the game, you need to state the rules. A critical list of success factors will help depict high level requirements that you want to ask top management to secure. Leave the details to be explored in future steps such as governance and implementation roadmap. You would usually have 3-5 CSF’s to set the stage for a successful planning exercise.

5. Analyze Current IT Environment

That’s where the heavy-weight lifting occurs. An analysis of your current environment (current state, or status quo) is required where you do lot’s of reflections and backward looking. You need to pick the right tools to help you with analysis, such as value chain mapping of processes to systems and services, SWOT analysis, etc. You will need to combine this analysis phase with input that you can acquire via:

  • Interviews with business and IT
  • Reviewing exiting documents (processes, policies, standards, organization structures, budgets, …)
  • Conducting workshops to structure the analysis and uncover the hidden.

If you need details on this step, then reviewing Enterprise Architecture will be a great source of guidance and tools.

6. Identify Strategic Issues and Outcomes

After scanning and analyzing the current environment, you will come up with a laundry list of strategic issues and outcomes. These need to be discussed and refined via internal debate within IT, and with the stakeholders as well. Workshop setups are the best to refine and agree on strategic issues. This step is critical to feed the benchmarking exercise coming next.

7. Benchmark and Study Best Practices – by comparing to local and global bodies and technology trends

Benchmarking is a great tool to compare your organization with other entities and to share strategic issues seeking what and how others do about them. It is a practical learning opportunity for your leadership team and staff.

A number of sources and/or techniques can be used when planning to conduct benchmarking:

  • Contacting other organizations that match yours in a number of criteria such as purpose, industry, and size.
  • Attending conferences and seminars that take holistic view of IT; avoid those that cover specific technologies and/or vendors unless it relates to one of your strategic issues.
  • Reviewing off-the-shelf benchmarking studies and research available from a variety of sources (such as business monitor, data monitor, IDC, Gartner, Forrester, … or world organizations)
  • Digging for reports from local government entities (ministries, commissions, …).
  • Studying technology trends from well-known vendors; but be cautious of the marketing nature of such sources.

Benchmarking serves as a reality check on what things are possible and what things that can be taken into consideration when envisioning your future state, next. It’s also important you consider the local organizations in your benchmarking since each market have a different set of drivers and challenges, and your local market gets you practical answers and advise.

8. Envision Target State and Assess Gaps

Your IT mandate, the analysis of current environment, and benchmarking results should set you on a path to state your strategic goals and conceptualize your future state (target state, target model, vision of success…; name it the way you like). Again, following a practice like Enterprise Architecture comes in handy with its structured approach and tools to depict a potential future state.

The future state can include one or more of the following:

  • Strategic goals – possibly arranged into strategic themes or focus areas.
  • Architecture models – conceptually depicting the future state in different areas such business, information, technology, …
  • Specific technologies/solutions recommended for adoption to address specific strategic issues (aligned with business goals).

Once you understand your current environment and envision your desired target model, you will be able to conduct a gap analysis to identify what can be done to progress you towards your vision. This analysis will be translated into actionable strategic initiatives – programs or projects that compose your motion vehicle. This will be captured in Step 10 – Developing Implementation Roadmap.

9. Develop Governance – to facilitate and enforce strategy execution

This is different (but could be an evolved version of) the previous governance mentioned in Step 1 – Develop Charter. Studying and establishing an appropriate and strong governance structure will ensure that the plan will be executed, communicated, monitored, and reviewed once commenced in action. Governance typically consists of the following:

  • Appointing one person who will be the owner and in charge of the plan. Usually a senior who reports directly to the CIO (in small and mid-sized organizations) or Corporate and/or IT Planning directorates (especially in large organizations with well-established planning functions).
  • Identifying people who will take care of the strategy plan; the core team.
  • Identifying those who will participate and facilitate its execution within IT and Business; the virtual team.
  • Appointing one or more seniors from executive circle to steer and monitor; the executive steering committee. Determining the rhythm of collaboration amongst them all via meetings, committees, workshops, reviews, …
  • Defining controls via standards, policies, and processes (such as change management).

By appropriate and strong governance I mean: physically tangible, empowered by top management with clear authorities, and culturally-fit (having a governance in public sector differs from the private sector).

10. Develop Implementation Roadmap – initiatives with priorities, estimates, ownership and schedules

Finally, we can have some real and tangible stuff that concludes this effort. An implementation plan will basically consist of a proliferation of strategic initiatives that link to your strategic goals and/or themes. Strategic initiatives are the result of analyzing the gap between your current and target states. They will need to be organized to reflect the following:

  • Dependencies and priorities: which initiative to start with, and how critical an initiative is to achieve a goal or theme.
  • Budget estimates: including people, tools, and efforts. Assigned ownership to ensure accountability.
    Schedules of initiative durations, and when value can be realized.

A roadmap will result to show how we’re going to achieve what we have stated in our mandate, strategic goals, and target model. Each initiative typically corresponds to a project, which means that they form the contact and transition point between your strategy management and program management. Program management (typically represented by a Program Management Office or PMO) will detail each initiative into project plans.

We’re Not Done Yet!

In order for any strategy to survive, three more steps are needed that compose a tail and a rhythm of continuous activity. These are communication, monitoring, and review. Below is a summary of these recurring activities:

A. Communicate the Plan – consistently

Communication is one of the responsibilities of an IT Strategy Governance. The governance structure will need to communicate both the planning (while developing the IT Strategy) and the plan (The final deliverables and the execution rhythm). IT organization need to best utilize this step to consistently show their value, and to achieve a common language with the business.

B. Monitor Performance – regularly

Your goals and initiatives will sure have metrics to reflect on progress towards goals. This step will be another tool used by the governance structure to monitor performance against targets. It will usually be depicted using dashboards and key performance indicators.

C. Review Strategy – regularly and incrementally

On a predefined schedule, the whole strategy needs to be reviewed, say every quarter, half, or annually. The governance structure need to utilize this review for course correction. There is also another important benefit of this review cycles: incremental development of the strategy. When you start your effort to develop your plan, you might be very limited in resources (people, budgets, timeframe). A strategy review will enable you to augment and refine your strategy incrementally, in order to manage scope and complexity.