Ward and Peppard (2002) define strategy as, “an integrated set of actions aimed at increasing the long-term well-being and strength of the enterprise.” (p. 276) Ward and Peppard further explain that information systems (IS) and information technology (IT) strategies, “must be integrated not only in terms of information, systems, and technology via a coherent set of actions but also in terms of a process of adaptation to meet the changing needs of the business as they evolve.” (p. 276) IS/IT organizations seeking to deliver cost-effective solutions that provide competitive advantage to the business must deliver strategic plans that align with and adapt to the needs of the business. At one of client’s, the Information Technology functional organization undertakes an annual strategic systems planning and technology roadmap effort to plan for and align with the evolving needs of the business. Analysis of my client’s strategic systems planning process in comparison to scholarly frameworks and industry best practices will enable an understanding of the relative maturity, strengths, and weaknesses of the company’s approach and provide possible improvements.
The business unit chief executive officer (CEO) is a direct report to the corporate CEO. The business unit chief information officer (CIO) is dual reporting to the business unit CEO and the corporate CIO. Strategic goals are developed at the corporate level using a top-down approach. The business unit CEO develops goals in support of the corporate goals. The business unit CIO receives copies of the corporate and business unit goals, as well as the corporate CIO and business unit CEO goals. The business unit CIO then develops IT functional goals in support of the super-set of goals. The business unit CIO’s goals are then provided to the IT directorates. Each directorate develops goals, key initiatives, and technology roadmaps in support of the business unit CIO’s goals. Across the directorates, there is no standard process for developing goals, identifying key initiatives, or updating technology roadmaps. Business input is neither gathered nor included. The strategic plans are typically updated over a one to two week period near the beginning of the fiscal year. The final deliverables for each directorate are provided in the form of presentation slides. Once all of the directorates have established the goals, initiatives, and technology roadmaps, an individual contributor is assigned to merge the directorate presentations into a single set of slides for all of the business unit IT function. Once the final strategy, in the form of a consolidated deck of presentation slides, is delivered to the CIO, the strategic systems planning effort is considered complete.
The strategic plans are disconnected from other IT and business processes like budgeting, procurement, and project management. As a result, the annual strategic planning effort devolves into an update and revision of a set of deliverables that are not referenced during regular operations. The natural result is that my client is highly reactive. Luftman (2003) describes this level of business alignment as Level 2: Beginning Process. (p. 11) Similarly, Ward and Peppard describe the level of strategic business alignment as Stage 2, with management involvement top-down and reactive. (Ward & Peppard, 2002, p. 121) Individual IT employee goals are linked to and supportive of upper management goals. Since individual goals have a direct bearing on annual performance reviews, promotions, and pay increases, employees are incentivized to meet goals and, through the bottom-up linkage to business goals, the business strategies are usually achieved.
My client formed from a series of merger, acquisition, and outsourcing events. Throughout the last several years, The business unit IT function has experienced a growth followed by additional outsourcing. Repetitions in this cycle occurred in 2006 and again in 2010. The company is in the early stages of strategic systems planning and business alignment as described by Ward and Peppard and by Luftman. (Luftman, 2003; Ward & Peppard, 2002) The business unit IT functional organization has experienced a decade of significant changes that have likely contributed to the immaturity of the process.
My client has a relatively immature strategic systems planning process. Given the importance of IS/IT systems to the core business and the significant revenues at stake, my client should undertake steps to mature and align the IS/IT strategies with the business. Implementation of a formal strategic framework, such as the one developed by Ward and Peppard will enable the IT function to align with the business and deliver more cost-effective and manageable services.
Luftman, J. (2003). Assessing It/business alignment. Information Systems Management, 20(4), 9-15. Retrieved from http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11015687&site=ehost-live&scope=site
Ward, J., & Peppard, J. (2002). Strategic planning for information systems (Third Edition ed.) John Wiley & Sons.