IT Strategic Planning

What is IT Strategic Planning?

IT Strategic Planning (aka Information Technology Strategic Planning) is the vehicle used to ensure that the organization is leveraging technology and technology enabled services, to create value for the organization, stakeholders, customers, and partners. IT Strategic Plan is the “on-ramps” to arrive at short and long-term organizational objectives. Typically, technology planning starts with a technology assessment or series of assessments to understand the organization's current state and to define a roadmap and strategy for achieving the desired future state vision. This helps define a detailed strategy for driving the expected business outcomes of change or transformation initiatives.

source: ISCG

Roughly, IT Strategic Planning:

• Identifies committees to lead the work
• Sets a schedule and communicates the purpose and process
• Seeks and uses input from stakeholders with surveys and meetings
• Considers broader trends outside the institution
• Prioritizes IT goals and outlines initiatives/projects to reach those goals
• Aligns goals with the institution’s strategic plan
• Identifies resources needed to complete initiatives/projects
• Outlines a structure for implementing and reviewing the plan, creating a continual IT planning process

The maturity of your institution’s strategic planning process informs the scope of your IT strategic plan. For example, if your institution’s strategic plan is specific with statements like, “improve classroom technology for instruction and distance education,” your IT plan becomes more operational than strategic. On the other hand, if an overall strategic plan is vague or nonexistent, your IT plan becomes more strategic.

An IT Strategy Template is an integral part of the IT Strategic Planning process. It serves as a blueprint guiding organizations on how to use technology effectively to meet business objectives and overcome challenges.

The Importance of IT Strategic Planning

The role of information technology in the development and execution of business strategy has grown significantly in the era of digital transformation. But as the rate of business and technology change has accelerated, some of the past static, rigid, and disjointed approaches to IT strategic planning fail to keep pace. That’s not to say CIOs should skip IT strategic planning altogether — quite the contrary. Developing and executing a business-aligned IT roadmap is more important than ever. “Given the growing importance of technology in every business, technology organizations must have clear strategic direction and priorities closely linked to the business strategy,” says Brad Strock, CIO of PayPal.

Experts and CIOs agree that an effective IT Strategy begins with an IT-informed business strategy. CIOs must be intimately involved in creating those documents and other artifacts that provide direction about what the enterprise needs to do, why it needs to do it, and how it will accomplish that. Only then can IT leaders build their functional plans to support business strategy. “The plan is about understanding where to make investments and what capabilities the company will need — the people, partners, processes, and systems required — to do that,” says Nigel Fenwick, vice president, and principal analyst at Forrester Research. When done well, IT strategic planning can be a powerful tool, setting the company up to realize key business goals and outcomes. But CIOs must be willing to embrace new approaches to planning that are more business-driven, flexible, and frequently revisited. Unfortunately, says Fenwick, strategic planning practices tend to evolve slowly. But IT leaders today don’t have time to waste.

IT Strategic Planning Process

To yield an actionable plan, stakeholders must follow an organized process for IT strategic planning. There are four phases to the process, building on one another to inform decisions.

• Discovery Phase: During the discovery phase, the CIO and IT leaders will work with business units to identify issues and opportunities and obtain cross-enterprise buy-in. Because the IT strategic plan supports business pursuits, it is essential to understand the business strategic goals, objectives, and relative priorities.
• Analysis & Funding Phase: The analysis and funding phase in IT strategic planning allows leaders to analyze stakeholder feedback, perform a SWOT analysis, understand options, and make tradeoff decisions with scenario planning. HBR says, “Strategy, at its most basic level, is a set of choices and trade-offs about where an organization will invest, compete, and win. Most executives struggle to understand the implications of not making effective trade-offs.” Once leaders align IT goals and objectives with those of the business, they must assess the required resources in terms of people, technology, and funding. The strategy must be revised or other priorities adjusted if these resources are insufficient. Continuous planning and funding aligned to strategy create necessary financial controls focused on results and answers “what are our desired results, and how much should we plan on investing to obtain them?”
• Execution Phase: The purpose of the execution phase in IT strategic planning is to define the deliverables and outcomes as they relate to the business objectives, as well as discuss dependencies, risk mitigation, and sequencing. Now is the time to outline and further prioritize long-term and medium-term IT goals and objectives and then build a plan with a roadmap that connects strategy to the investments and outcomes that will drive transformation. Include a budget, timeline with milestones, roles, and responsibilities, and KPIs with measurement timelines. All must be then communicated to and aligned with the groups involved.
• Measurement and Review Phase: Finally, the measurement and review phase offers the opportunity to benchmark success and create a feedback loop that informs decisions about whether the plan needs revision. The plan can be adapted based on what’s been learned, changes, shifts in strategies, or other influences that impact whether the current strategy deserves continued funding. IT strategic planning is continual and iterative, ensuring it is always relevant and the guiding force behind all work.

IT Strategic Planning Model

The requirement and the need for companies to have quality Information Technology services make organizations worry about efficiently managing their resources and delivering and giving optimal support to information technology services. In this sense, descriptive quantitative research was conducted to design a strategic information technology planning model for higher education institutions that allows the IT4 + model to be aligned and validated by the Ministerio de Tecnologías de la Información y Comunicaciones in Colombia. The IT4+ management model is built on experience, best practices, and lessons learned during the implementation of the ICT management strategy for the government of Colombia. IT4+ is an integral model of strategic management with technology whose fundamental base is the alignment between technology management and sectorial or institutional strategy. It is made up of the following components: IT Strategy, IT governance, information analysis, information systems, technology service management, appropriation, and use.

Based on the IT4+ model and the level of maturity evaluated in each of the phases of strategic IT planning of a general methodology of the Higher Education Institutions of Norte de Santander, the proposed model consists of six phases emphasizing the analysis of the current situation, in the information technology model and planning, focusing on the understanding of the business strategy and the use and appropriation of information technology that allows all processes to be supported from the strategic levels of business with information technologies. The situational analysis is deepened in two phases: Strategic understanding and acceptance of Information Technology. The IT model phase is deepened by two phases: IT Strategy and Use and appropriation of Information Technologies. Likewise, each phase must have an action plan for its execution, reinforcing the last planning phase. The development of the previous phases allows the Higher Education Institutions of Norte de Santander to deepen in the components where they have a low level of maturity (see Figure below). The validation of the model was carried out using the Delphi methodology.

source: LL Contreras Hernández et al.

• Phase 1: Strategic organizational understanding. This phase seeks a precise, clear, and documented understanding of the current situation of the institution, the organizational context, and the environment to provide guidance that allows the use of technology as a transformation agent, initiating the evaluation of the organizational maturity, an evaluation for the understanding of the IT culture, assessment of the operative models in IT and finally an action plan for the execution of said phase.
  • Organizational Maturity: A diagnosis must be made of the state of maturity of the organization about the model's dimensions, qualifying said the state of maturity in one of the five levels, functional, enabler, contributory, differentiator, and transformer.
  • Model evaluation: understanding of the institution's operating model, the IT model, and the efficiency of processes.
  • IT Culture: Conduct an evaluation of how information technologies are conceived, which seeks to link people and develop a culture that facilitates the adoption of technology that is essential for IT investments to be productive.
  • Plan of action: Establish a guide for the fulfillment of the objectives of Phase 1 in a determined time.
• Phase 2: Acceptance of IT. Analyze the motivations that influence the acceptance of new technologies aimed at managing information in institutions. Knowing the motivations that push managers to the adoption of new information technologies is a critical aspect to correctly define which factors influence such a transcendent decision for organizations. This phase is composed for the understanding of perceived utility and perceived ease of use.
  • Understanding of perceived utility: Understanding how the use of a technology increases productivity and the development of business activity increasing efficiency as a conclusive factor for business adoption of IT.
  • Perceived ease of use: Establishes the additional effort involved in the application of an innovation, reaching minimum values when the complication of it is greater, so the ease of handling a computer system must positively influence the perception of its usefulness. Action Plan: Establish a guide for the fulfillment of the objectives of phase 2 in a determined time.
• Phase 3: Operating Model. This phase includes the analysis of the operational and organizational model of the entity, the information needs and the alignment of IT with the processes, in such a way that we are aware of the changes or adjustments that are made in this regard, preparing the development of the IT strategy.
  • Analysis of the Organizational Structure: a model of the organization and a business strategy must be established to partially produce the IT requirements necessary to improve the efficiency and productivity of the company, identifying the operational deficiencies in order to redesign or modify them and automate them.
  • Information Needs: This is the fundamental input for information management in the organization which is classified into information for decision making, process information and information for stakeholders, taking into consideration the information from the single source, quality information, information as a public good, information in real time and information as a service. Likewise, the available information must be timely, reliable, complete, pertinent and useful.
  • Analysis of Processes and Technological Support: Information systems are created to support the processes of the institution and in that sense, the alignment with the processes of the entity is vital. However, if there is no definition of management processes with quality standards; there is a risk of systematizing bad practices. Through this component, based on the analysis of each process, the information technology required for each area is established.
  • Action Plan: Establish a guide for the fulfillment of the objectives of Phase 3 in a determined time.
• Phase 4: IT Strategy. They are the result of a series of decisions about its scope, competencies and management, such as technological scope, systemic competences and technology management, which is the articulation of the IT strategy with the work of the Entity. In this proposed model, this phase is subdivided into IT architecture, IT governance, SI strategy and the definition of IT policies.
  • IT Architecture: comprehensive and strategic analysis based on the framework where the plans or strategies must be aligned to ensure that technology gives value, so we can call IT Architecture as the strategic alignment between the information technologies, the business and the strategy.
  • IT Governance: Create and maintain an organizational structure that allows IT to be managed in an integral manner and with strategic value, as well as establishing service and development agreements with the areas to improve and maintain the processes.
  • SI Strategy: Once the IS Architecture is established, the software is designed and developed to implement the system with functionality, security and confidentiality criteria.
    • Technological Services: Develop a technological services model that allows the supply and uninterrupted operation of the technological infrastructure, storage, backup copies, datacenter, dedicated Web hosting, connectivity, physical and logical security, infrastructure monitoring, help desk and operation and maintenance services where we have; the administration of applications, administration of server infrastructure, connectivity and security.
  • Definition of IT Policies: Issuance of institutional scope policies such as security policies, access and use of information and technological resources, or sectoral coverage. The IT policies defined from the strategy are issued and published as administrative acts through the mechanisms and regulatory processes that the entity has, whether they are decrees, resolutions, circulars or technical guides.
  • Action Plan: Establish a guide for the fulfillment of the objectives of Phase 4 in a determined time.
• 5. Phase 5: Use and Appropriation of IT. This phase includes awareness days, training, practices, digital resources, interaction with experts and in general a broad mobilization so that as many people as possible are part of the IT Architecture development process.
  • Awareness Plan: It has to be socialized to all employees the new development and/or business and IT strategies, emphasizing the advantages that this entails for the growth of the institution or company in relation to the following topics: Model IT4+, Importance of ICT, Importance of IT-based processes, New forms of social interaction, Importance of IS, IT as a service; through videos, billboards, talks, etc.
  • Training Plan: Training to incorporate IT, as well as the establishment of roles and functional responsibilities related to the use of information systems using courses, readings, study cases, practical tests.
  • Transfer of Knowledge: In order to reduce efforts - and costs - it is proposed to build a network of trainers of trainers that allow the establishment and dissemination of the following topics: Knowledge networks, Knowledge circles, Knowledge management, Pedagogy for nonpedagogues, Educational models and content design for virtual environments.
  • Action Plan: Establish a guide for the fulfillment of the objectives of Phase 5 in a determined time.
• Phase 6: Planning. This phase includes the guidelines that lead the definition of the strategic plan, the structure of strategic activities, the evaluation of IT acquisitions, the implementation strategy, the financial analysis, the risks, the establishment of indicators and a master plan. The establishment of priorities is a method that allows placing in the proper order of implementation, the automatable processes of the operating model and those translated into information systems, this in terms of the potential for profit and the probability of success.

The Benefits of IT Strategic Planning

• Charting a Clear Direction: A cost-efficient organization has all of its components in alignment. An IT strategic plan helps achieve this synergy by setting up a sense of direction for everyone’s reference. With realistic goals and a shared vision, an organization is better positioned to evaluate its present situation and its room to grow.
• Foresight and Proactive Approach: Instead of a reactionary position to address problems, organizations can stay several steps ahead with an IT strategic plan. The anticipation of the issues before they happen can give companies ample time to prepare. Prevention is better than cure. By understanding current technological trends, the IT department’s troubleshooting capabilities will receive a boost in efficiency and effectiveness.
• Profitability Increase: Profitability results from the interplay of market trends and consumer segment profiles. Factors that provide success to an organization’s product or service should be in the IT strategic plans. When done correctly, sales and marketing will improve. In turn, it will cause more profits for the organization.
• Boost in Operations: An organization can align its functional activities to achieve its goals with a better documentary guide. Budgetary requirements and resource allocations are more accessible for decision-makers with an IT strategic plan. If everyone follows a common goal, the company's productivity will likewise improve significantly.
• Business Longevity: There is much volatility in industries nowadays, especially with the COVID-19 pandemic. Decision-makers cannot take longevity for granted. By implementing an IT strategic plan, there are better chances of growing and surviving the business. Pitfalls that contribute to an organization’s demise must become the subject of careful planning to avoid their effects.
• Robust Response Against Threats: With the rapidly evolving nature of cybersecurity threats, an IT strategic plan can help address these potential attacks before they strike. It establishes a system for detecting, reporting, and mitigating digital threats. A strategy in place will help the organization stay ahead of these threats before they happen.
• Contingency Preparations: With a plan in place, various contingencies exist to address any situation. An IT strategic plan will delegate company assets and resources such as infrastructure, technology, and security management personnel to be always ready for troubleshooting. There must also be better protocols for incident response management and compliance with government regulations.

The New Role of the IT Strategic Planning Process

Waze is an outstanding example of how the IT strategic planning process has become much more central in business. This collaborative application allows vehicle drivers to find the best routes (using the location and speed of users to determine less congested routes). It is the technology involved in this system that adds value to the product. It’s different from using the IT strategic planning process to make a production line more efficient, pay employees, serve customers better, make calculations, gather information for decision-making, or run a business.

The IT strategic planning process generates value for the end customer and, consequently, the company. In addition to decreeing the end of the automotive GPS industry, WAZE is much more efficient. It indicates the correct and closest route and updates real-time information on traffic conditions by changing the route with instant messaging. Therefore, it’s not necessary to work in technology for the IT strategic planning process to be central to a business, helping to create and conquer new markets.

Schools, hospitals, hotels, the manufacturing industry in general, and virtually all large-scale businesses no longer see IT processes as ancillary to strategic processes in value generation. But regardless of this renewed importance of the IT strategic planning process, its planning methodology is a consolidated procedure. We will summarize this next.

See Also

1. IT Portfolio Management (ITPM): IT Strategic Planning utilizes IT Portfolio Management (ITPM) to ensure alignment between IT projects and investments with the organization's strategic objectives, aiming for the delivery of value.
2. Change Management: Change Management is integral to IT Strategic Planning as it aids in the transition and adoption of new IT strategies and initiatives, ensuring they're integrated smoothly into the organization.
3. Information Technology Implementation (IT Implementation): IT Strategic Planning culminates in Information Technology Implementation (IT Implementation), which represents the tangible execution of the strategies. This execution phase includes deploying, setting up, and transitioning to new technologies or systems in line with the outlined strategic objectives.
4. Strategic Information Systems Planning (SISP): IT Strategic Planning encompasses various components and methods, and one of its essential elements is SISP, which is a systematic process for aligning and coordinating the use of information technology to support the organization's strategic objectives
5. IT Strategy Framework