IT Strategic Planning Process: Executing IT Strategy’s Objectives

23 min read

Technology & Engineering

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In previous articles, we have covered IT strategy and technology strategy. These topics form the basis for the technological development of a company, and will most likely largely determine its long-term success in an ever faster-changing environment. Strongly recommend you to read them!

In this article, we talk about the implementation of the strategic goals mentioned above. As you will have experienced, all too often the best plans fail because of poorly prepared implementation.

What is IT Strategic Planning

IT Strategic Planning is about translating the goals described in the IT strategy – and this includes the Technology Strategy – into an implementable plan. Not only do the priorities of the business and IT have to be taken into account, but also the existing IT environment, the resources, and the interests of the affected supporting units. Often it is only in this phase that it becomes clear what impact the transformation will have.

Thus, the IT strategic planning must be transparent, the affected parties must be involved and informed, the prioritization process must be robust and the success must be measurable.

Since the implementation often has a major impact on the IT department’s resources and the hiring of experienced staff in this area takes time, the planning should be tackled early on.

Of course, there is the option of obtaining needed know-how externally, via resource suppliers or consulting firms. This can be particularly useful if a company has little experience with major (digital) transformations. It can also improve planning and acceptance within the company, as external resources bring a fresh perspective on the topic and are not restricted by existing structures. I will gladly offer my support here if you are considering this option.

For a comprehensive understanding of IT strategy planning, you can gain valuable insights and knowledge by downloading our book How To Create Innovation“. This resource will delve into the intricacies of developing and implementing an effective IT strategic plan, covering essential concepts, best practices, and real-world case studies to aid you in your journey toward successful technology integration and business alignment.

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Understanding IT Strategic Planning

From IT Strategy to IT Strategic Plan

Put simply, an IT business planning strategy focuses on the future state of an organization’s IT and technologies, and an IT strategic plan on the path to get there. While an IT strategy may cover different phases of technological development, an IT strategic plan breaks them down into much smaller, actionable steps.

Of course, during the implementation – and often already during the implementation planning – one gains a lot of experience, which can lead to an adjustment of the IT strategy. Nevertheless, a robust IT strategy should typically be revised with restraint – an adjustment is time-consuming because it requires approval processes with the decision-makers. A proven time cycle for this is twice a year. An IT strategic plan, on the other hand, can be adjusted – also cautiously – after each development cycle.

The IT strategic planning process holds immense importance to businesses in today’s technology-driven world. At Digital Leadership, our IT Strategy consulting and Technology Strategy services go beyond mere recognition of technology’s importance; we prioritize the value of a well-designed IT strategic planning process. Our Innovation blueprint service serves as the starting point, evaluating current innovation practices and seamlessly integrating them into the comprehensive business plan

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Key Components of IT Strategic Planning with Examples

IT strategic planning components
IT strategic planning components and contributors

(1) Vision and Mission: Alignment with the IT Strategy

An IT strategic plan should of course reflect the goals and visions defined in the IT strategy. These should have been communicated within the company, and the affected areas should have helped shape them and accepted them. The success of the implementation will also be measured against these.

The IT strategy might also have defined the means of implementation – such as the technologies to be used – as well as the organizational form of the IT unit, the most important aspects of cooperation with third parties, or even the decision-making processes as to whether developments should be carried out in-house or whether external providers should be used. The concrete implementation of these guidelines is part of the IT strategic plan.

A successful IT strategic plan must also adhere to the fundamental approaches defined in the IT strategy on topics such as security, architecture, performance, scalability, operations, etc.

These guidelines provide the framework within which an IT strategic plan can operate. If these are adhered to, there is typically no need for approval processes at an executive level – except in the case of substantial shifts in the communicated efforts or timelines.

(2) Business Alignment: Being driven by Business objectives and goals

Just as the goals in the IT strategy are not only defined on a technical level but also in terms of impact on business goals, they must also be considered in the IT strategic planning process. For example, if a business goal is to enhance customer experience, the IT strategic plan may prioritize initiatives like implementing a customer relationship management (CRM) system to achieve this objective.

The business often has to make compromises during implementation – after all, business resources are also involved and prioritization during development will have a functional impact. Therefore, business objectives and goals should be considered in the planning and prioritization process and communicated regularly and transparently.

It will be very motivating for business leaders if the implementation brings them benefits early on. This is good for cooperation and increases understanding when things do not develop as well or as quickly as planned.

(3) Principles and Values: Consideration of company values and principles

A company is defined by much more than organizational structure, service offerings, financial indicators, and other typical company characteristics. It has a corporate culture, and values that it strives to stand for, but also principles that it holds employees to when making decisions. Whether these are clearly defined architectural principles, such as a modular structure between front, middle and back office applications, or more abstract values such as failure tolerance in the organization, their impact on IT should be considered both in strategy – at a higher level – and in IT strategic planning – in concrete decisions.

The better a company has identified, defined, written down, and communicated its values and principles, the easier it is to apply them to IT strategy as well as during the IT strategic planning process. Understanding them strengthens the bond between employees, as well as their loyalty to the company.

(4) SWOT Analysis: Understanding the company’s capabilities and resources

A company will rarely completely reinvent itself through a transformation – in doing so, it would leave many strengths and much potential untapped. This also applies to the development of new, innovative business models, which are ideally developed independently of the structures of the parent company in the first phase but are often integrated into it in the scaling phase.

Therefore, it is very helpful to get a clear picture of the strengths, and the related opportunities, but also the weaknesses and threats in the areas concerned. The SWOT analysis is a good way to do this.

The SWOT analysis framework is of paramount importance in the strategic process of a company. It helps identify internal strengths and weaknesses, allowing for leveraging strengths and addressing weaknesses. Additionally, it uncovers external opportunities and threats, enabling effective planning and risk mitigation. This structured analysis guides decision-makers in aligning resources with market opportunities, leading to informed and successful strategies. You can download it now!

SWOT Analaysis Template
The UNITE Swot Framework
Designed by: Digital Leadership AG

(5) Goals and Objectives: Establishing clear and measurable goals and objectives for IT and Business

Only with clearly defined goals and strategic objectives can the success of a transformation be objectively controlled and expectations clearly set. This success is measured not only by the goals of IT, but also by those of the business units – after all, the objective of every transformation is to ultimately strengthen the business model of a company.

These goals and strategic objectives should be measurable, i.e. defined quantitatively – this facilitates the alignment with the IT strategic planning, which is defined in both the business and IT strategies, and finally in the financial performance planning.

Last but not least, a clear definition of goals and objectives holds all affected areas, whether IT or business, accountable.

(6) Resource Allocation: Determining resource needs and optimization potential

The framework for structuring the IT department is set in the IT strategy. During the IT strategic planning process, these guidelines are detailed and the specific needs are elaborated. For example, if a digital transformation initiative requires expertise in artificial intelligence (AI), the plan may outline hiring strategies or training programs for existing staff.

This means both addressing new needs, but also organizing and possibly training the existing team to meet the new requirements. External resources can be used, especially for the transformation itself. The internal team should nevertheless be capable of maintaining the infrastructure in the long term – unless parts of it are outsourced to third-party providers.

As transformation is often carried out over several phases, resource planning is not a static task but part of the preparation for the next development phases. It is important to address this early on, as resourcing can be one of the most time-consuming tasks.

(7) Roadmap and Action Plan: Defining a strategic roadmap and action plan

Many readers will have experienced that road mapping can be a thankless task. This is where the efforts become clear, the priorities are set, and the waiting times for business functions are determined. There is a lot of potential for tension between the business units involved, but also within IT – after all, everyone cares most about their own area.

Often this challenge is circumvented by making the process less transparent – in order to conceal the implications. The focus is on the next tasks and discussions are postponed until later.

This is a short-sighted approach that not only does not solve problems but exacerbates them – albeit later. It can also lead to inconsistencies that are difficult to correct – for example, if a technological platform does not meet the requirements of a certain business unit after all. Such an approach also does not allow for strategic planning in terms of business capabilities and their implementation over time.

From an overall company perspective, it is therefore much more advisable to choose a transparent planning process and, based on this, to seek agreement on the implementation steps already as part of the preparation for the transformation. As usual, all areas, i.e. both IT and business, but also, if affected, operations, legal, etc., must be involved.

Of course, no plan is perfect, and adjustments will be necessary, problems and delays will happen, and new requirements will arise. However, if this is the case on top of a robust, well-supported plan, they are much easier to manage.

We will present an approach to quantitative road mapping further down in the article.

(8) Risk Management: Identifying potential risks and developing mitigation strategies

The main risks related to the technological approaches, the IT organization, or the impact of the choice of technical and architectural solutions on IT, business activities, and objectives should have been analyzed in the IT strategy and mitigation measures described there. For example, if the transformation involves adopting new software, the plan may identify potential risks like software integration challenges and outline strategies to mitigate these risks.

In the IT strategic plan, the focus is on risks related to the implementation of the IT strategy. These could be – the list is not exhaustive and depends on the specifics of the transformation:

  • Technical Risks: Including topics such as system compatibility, data migration, integration challenges, software and hardware failures, cybersecurity vulnerabilities, and scalability concerns.
  • Operational Risks: This can include disruptions to business processes, service interruptions, inadequate training and support for employees, lack of proper change management procedures, and operational inefficiencies.
  • Organizational Risks: They involve factors such as resistance to change, lack of employee buy-in or engagement, skills gaps, organizational culture clashes, poor communication, and inadequate governance or project management practices.
  • Financial Risks: These risks can include budget overruns, unexpected expenses, poor return on investment (ROI), inaccurate cost estimates, and the inability to realize projected benefits or cost savings.
  • Compliance and Legal Risks: These risks may involve data privacy and protection, intellectual property rights, contractual obligations, industry-specific regulations, and compliance with international standards.
  • Vendor and Supplier Risks: When engaging external vendors or suppliers as part of the IT transformation, there are risks associated with their performance, reliability, and adherence to contractual agreements. These risks may include vendor lock-in, service level agreement (SLA) breaches, intellectual property concerns, and the potential for supply chain disruptions.
  • Project Management Risks: Risks in this category include inadequate project planning, unrealistic timelines, scope creep, poor resource allocation, lack of project governance, and ineffective monitoring and control mechanisms.

(9) Performance Measurement: Establishing key performance indicators (KPIs)

When steering an IT transformation, key performance indicators (KPIs) will help measure success and ensure that the transformation is on track. The specific KPIs may vary depending on the organization and its objectives, but here are some commonly used KPIs to consider:

  • Project Milestones: Tracking the achievement of major project milestones provides a high-level view of progress and helps ensure that the transformation stays on schedule.
  • Budget Variance: Monitoring the variance between planned and actual expenditure helps control costs and ensures that the IT transformation remains within budget.
  • User Adoption and Satisfaction: Assessing user adoption rates and gathering feedback through surveys or user satisfaction scores can indicate how well the IT transformation is being received and adopted by end users.
  • System Uptime and Availability: Measuring the availability and uptime of critical systems and applications helps evaluate the reliability and stability of the IT infrastructure during the transformation.
  • Time to Market: For organizations focusing on agility and innovation, measuring the time it takes to develop and deliver new products, features, or services can be a crucial KPI.
  • IT Service Performance: Tracking key metrics like incident response time, problem resolution time, and service-level agreements (SLAs) helps assess the effectiveness and efficiency of IT services throughout the transformation.
  • IT Security and Compliance: Monitoring security incidents, vulnerabilities, and compliance with relevant regulations helps ensure that the IT transformation is maintaining the required security posture and regulatory compliance.
  • Employee Skills and Training: Assessing the skills and capabilities of the IT workforce, as well as the effectiveness of training programs, helps ensure that the transformation is building the necessary skills within the organization.
  • Business Alignment: Evaluating how well the IT transformation aligns with the overall business objectives can indicate whether the efforts are contributing to the organization’s strategic vision.
  • Return on Investment (ROI): Measuring the financial impact of the IT transformation, including cost savings, revenue growth, or productivity improvements, helps determine the overall return on investment and the success of the initiative. As a basic rule, it is very helpful to work with the Total Cost Of Ownership in order to objectively compare the actual costs with the future benefits – including the amortization of the investment in the implementation.

Remember, it’s essential to tailor the KPIs to your organization’s specific needs and goals, and regularly review and refine them as the IT transformation progresses.

(10) Communication and Stakeholder Engagement: Ensuring buy-in from all relevant parties

Main Cornerstone of a communication strategy
Main Cornerstones Of A Communication Strategy
  • Just as close collaboration between all relevant stakeholders in defining the IT strategy is the best way to ensure that everyone’s needs are considered and expectations agreed upon, the same is true for IT strategic planning.
  • While for the IT strategy, the decision-makers in IT and on the business side play the central role, in IT strategic planning it is mainly the business units, in addition to IT, and of course, the project or programme management that coordinates the activities.
  • The selection of technological approaches, solutions, and systems, but also the prioritization during implementation will have an impact on the availability of the business functions, which are provided to the business units after each implementation phase. It must therefore be ensured that the planning within the business units is consistent with the IT strategic plan.
  • Furthermore, a transformation can only be carried out efficiently if all stakeholders, IT, Business as well and other functions, know and understand both the objectives of the exercise and the capacities they will need to provide. Thus, the broader information should not be limited to mere status reporting but should demonstrate the importance of the activities for the implementation of the business and IT strategy. Hopefully, at this stage, staff have been sufficiently informed about the latter.
  • For example, if the IT strategic plan involves significant changes in workflow, effective communication strategies may include regular updates, workshops, and feedback sessions with relevant stakeholders such as end-users and management.

Ideally, those responsible for the IT teams and the business units should communicate, as they are closest to the employees concerned, and understand their needs, problems, and requirements best. However, they can be supported by the project or programme management as well as the executives.

How to Implement & Execute an IT Strategic Plan?

In this chapter, we will go into more detail on some important components of an effective IT strategic plan. It will be a matter of identifying the most important goals, balancing them with the existing infrastructure, creating a plan that takes into account the priorities of all those involved, and finally ensuring that the infrastructure continues to develop optimally after the transformation initiative.

Unite process for a sustainable IT strategy
Unite Process Dependencies Overview For a Sustainable IT Strategy

(1) Identify your IT Strategic Goals as a basis for IT strategic planning

Since IT Strategic Planning is about structuring the implementation, the specifications must be defined sharply enough so that the IT managers can carry out the planning and the IT teams can implement.

The IT strategy in Planning will have defined goals at different levels:

Architectural principles: Describe basic approaches that define the general structure of the future infrastructure. This can be the security architecture (e.g. central storage and provision of customer data or encryption of communication between different systems), the specifications of a modular structure between front- and back-end systems, or the specification of which functions are to be provided centrally and which are to be implemented in the business units – or in other country entities. All developments must be checked against these specifications, and deviations must be well justified and approved at the executive level. After all, these form the basis for the strategic development of the company.

IT principles: These are not derived from the company’s strategic goals like the architectural principles, but they set IT ground rules to ensure a robust, future-proof infrastructure. This can include technological approaches, describing under which criteria external solutions should be used and where internal development should take place, or also performance specifications for the infrastructure.

In the same category would fall specifications from operations, as well as those from other affected areas (accounting, legal, marketing, etc.). There is more flexibility in implementation, but deviations must still be justified and ways are shown to mitigate their effects.

IT guidelines: These provide IT staff with guidelines for their daily work. This can be the way programs are structured and documented, which IT tools are used for which purposes or who from the IT team can work from where – keyword home and holiday office.

The architectural principles, IT principles, and IT guidelines should be formulated clearly enough in the IT strategy so that they can be applied to the day-to-day work of the IT teams.

Functional Goals: In addition, the IT strategy also describes the mid-to-long-term functional goals. It should describe the functional development at the company level (e.g. how the offerings will be made available to customers in the future) and at the business unit level (e.g. which offerings will be developed). Often the IT strategy will already set out an initial implementation timeline and priorities.

However, these will typically not have been worked out yet and will need to be detailed in the IT Strategic Plan.

Check out: Identify your IT Strategic Goals as a basis for IT strategic planning

(2) Assessing your Current IT Capabilities

A distinction must be made between developments within the existing infrastructure and developments of new, innovative business models.

In the first case, changes are made to existing systems, and new functionality is embedded in the existing infrastructure. Of course, systems that are no longer adequate can be replaced by new ones.

In the second case, development should take place as far as possible independently of the existing infrastructure. This is the only way to enable fast, iterative development and the risk culture typical of innovation.

In the case of implementation within the existing infrastructure, in addition to the new functional goals defined in the IT strategy, additional ones are also added that are derived from the problems and inefficiencies of the existing set-up.

All of them are then examined to see how far they can be solved or implemented within the existing infrastructure. Especially when it comes to core elements of the infrastructure, major changes or replacements are often time-consuming and risky, as there are many dependencies and the operation is well established. Thus, the consequences of these decisions should be well understood and support the strategic goals of the company.

(3) Crafting a Roadmap and Action Plan

Earlier in the article, it was mentioned how important it is to define a realistic, transparent, and robust roadmap, and from it an action plan, that all stakeholders can commit to and support. Because it is so important, it should be mentioned again that this includes not only IT but also the business units and any relevant support functions.

The best way to achieve this is to follow a quantitative approach to road mapping. It will ensure consistency between strategy/goal setting, the interests of all affected parties, the necessary technical improvements, and the implementation process. Additionally, it will allow for a well-planned phased introduction of features and services. Here, in short:

A scoring reflecting the most important aspects is defined for all new or to-be-changed functions:

  • UX Virtual Client scoring: Criteria describing the needs of a selection of virtual clients, covering all relevant segments – how relevant is this function for our clients?
  • Business scoring: Criteria describing the business impact, based on the strategic business goals and provided by the business strategy defining body and the business units
  • IT scoring (includes operations, security & legal): IT criteria (e.g. modularity), operations criteria (e.g. fit with target Ops set-up), security requirements (e.g. data security perspective) and potentially legal constraints (e.g. contractual complexity)
  • Costs: Implementation effort, Implementation expenses, Operation expenses, etc.

This results in an initial prioritization of the functions, which are arranged according to functional groups, for example.

Depending on available capacities in the change team as well as risk considerations, less high-priority functions are moved to the next implementation phase, taking into account dependencies and overall consistency. The point is to have a functioning infrastructure in each implementation phase and to be able to use new functions as early as possible. This process is repeated iteratively until there is a consistent development plan over a sufficient number of implementation phases.

To go into this in detail would go beyond the scope of this article. If you are interested, I will be happy to assist you in this process.

(4) Measuring, Monitoring & Optimizing

The best way to ensure acceptance of a transformation is to demonstrate success early on. This is one of the goals of the quantitative road-mapping approach presented in the last chapter.

Of course, this is not enough to have a clear picture of the success of activities across the whole project or programme. Quantitative approaches are required for this as well. The most important KPIs for maintaining clarity on the status of implementation were described above.

These KPIs – adapted to the relevant needs – should be maintained even after the change initiative has ended. This allows for ongoing measurement of key performance parameters, and thus ongoing improvement of the infrastructure – in addition to more efficient risk management. Recognizing that today’s dynamic environment – both in terms of technological development, client needs and competition – forces a continuous evolution of the infrastructure, this is best achieved through a robust monitoring and optimization set-up.

Importance of IT Strategic Planning for Business Growth: A Paradigm Shift in Organizational Success

In today’s dynamic, technology-driven environment, IT strategy has taken on a new meaning. It no longer has the primary goal of implementing requirements set by the business, but rather helps shape them and determines the further development of the company. This requires close cooperation between business and IT at all levels and new, robust, transparent approaches to the implementation of transformation projects.

In the sense of continuous development of the infrastructure, an IT Strategic Plan should include both a technical roadmap and one for business functions, allow monitoring of progress, and be flexible enough to be able to react to new challenges and requirements. And finally, it should ensure acceptance on both the business and IT sides.

In this way, a company can constantly evolve, react quickly to new challenges, and make targeted adjustments to fully exploit its opportunities. In addition, transparency and measurability minimize tensions between business units and give room for a common pursuit of the company’s overall strategic goals!

Closing Thoughts

We live in a time when many companies need to renew themselves. It is not enough to rely on new technologies. Rapid change requires new, collaborative organizational structures, short, agile development cycles, and proximity to customers that allows quick feedback on their needs. Only with efficient, transparent processes can this intensive change be managed without the company breaking down due to internal tensions.

Of course, it would be too risky for a company to carry out this renewal company-wide at once. By introducing new approaches in a phased transformation limited to certain areas, the risk can be reduced and a lot of experience can be gained. In doing so, it can be helpful to rely on external expertise – which also allows a certain independence from the existing structures.

For companies that want to be successful in the future, the question is not whether, but when to initiate this process. And as so often in life, the best opportunity was yesterday, and the second best is today!

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