How to do an IT Strategy on a budget
For most IT people, the term IT strategy is connected to vague visionary statements, cultural buzzwords and huge documents. These documents can be expensive to produce, difficult to maintain and a nightmare to communicate. Visions are hard to implement without specific guidance and cultural buzzword are fireworks that quickly fizzle out when people walk out of your presentation.
If you aren’t one of those huge businesses chances are that you don’t have one of those gigantic documents to follow. Even if you are, there are still ways to make your IT strategy better.
One thing to keep in mind, if you don’t even have a tiny document or a statement describing your IT strategy, your strategy is defined by the way your employees go about their daily jobs. That means that the culture and habits of your IT people is your IT strategy. And if there is a culture gap between your IT people and your business people, you’ll have a business – IT misalignment. Sounds familiar? If so read on, and we’ll share a few tips on how to fix this, improve your short and sweet IT strategy and achieve better business IT alignment. All this on a budget.
But first, a short brush up on what a strategy really is. When it comes to business strategy Michael Porter says that the five tests of a good strategy are:
- A unique value proposition compared to other organizations
- A different, tailored value chain
- Clear tradeoffs, and choosing what not to do
- Activities that fit together and reinforce each other
- Strategic continuity with continual improvement in realizing the strategy
He also goes on and says that a strategy is not:
- The internet (or any technology)
- Mergers / Consolidation
- Alliances / Partnering
- Best practice improvement
- A vision
So, by looking at this, good technology strategy can’t simply consist of doing scrum, developing software, outsourcing your ops department or having a grand vision for the future. It can’t either be vendor dependent (which is why we at CoreMotif are vendor independent) or technology dependent. Stating stuff such as we are a Microsoft house, or we only buy computers from this specific vendor can’t be your technology strategy either.
To make a good technology strategy on a budget, we recommend you gather your major stakeholders, board of directors or whomever is involved in strategic decision making for your business and consider the five tests of a good strategy within the context of IT.
Unique value proposition
Also known as your unique selling proposition (USP) your uniqie value proposition is a clear statement, a chain of reasoning, describing the benefit of what your IT department has to offer. You craft a statement answering why you should be a part of the business at all? We recommend contemplating the following questions among others:
- What do we bring to the table that’s unique?
- How are we different from any generic IT service provider out there?
- Are we writing better or cheaper code / maintaining the IT systems / why us?
- Do we understand the real problem that the business is solving for the customer?
- What are the problems that the business is facing while solving those problems?
- What are we, as a business, competing on? Is it value, cost, customer relationship, any other concept?
A different, tailored value chain
A value chain is a conceptual model providing a high-level description of how the process or activities by which a company adds value to an article, including production, marketing and the provision of after sales services are carried out. Value stream maps or value chains roughly serve the same purpose here, the idea is to figure out how the IT department adds value, in what steps. A typical IT department has at least the following value chains or value streams
- Designing custom software, delivering it into the live environment, maintaining it and supporting its users.
- Procurement of IT assets, software and hardware and delivering it into the live environment, maintaining it and supporting its users
You can also look at the value streams that the typical IT department has, which are
- Strategy to Portfolio, figuring out what to build or procure
- Requirements to deploy, to build what the business needs
- Request to fulfill, catalog, fulfill and manage service usage
- Detect to correct, anticipate and resolve production issues
The point here is of course, whatever and however you choose to look at your IT activities, value chains or value streams, you should figure out what it is about how you do things that separates you from the rest. You can integrate your value chain vertically or horizontally, for example, embed software startups in your value chain if you want to be cutting edge, form strategic alliances with vendors. You can wrestle control of the entire value chain, or hand it over to someone else. Whatever you do, make sure that the tailoring you do aligns with the strategic goals of the business you are a part of.
Clear tradeoffs, choosing what not to do
Strategy is about making decisions about what to do. More importantly, it’s also about making decision about what not to do.
When it comes to IT, you might want to mix in decisions on how you do your daily tactics. These can be implemented as guiding principles, mantras or something else. You might want to procure instead of developing if you can. You might decide that innovation is so important that you’ll develop your own tools, not matter what. If you are making cutting edge games, you won’t outperform the competition by doing the same thing as they are. You might decide to discard old legacy technology constraints. Or you might decide to enforce them. If you have a legacy technical environment and a lot of guidelines to follow, they might be there for a reason. Or perhaps they are just a reminder of days’ past, after all, time goes by and you might have addressed the underlying reason for these guidelines.
Whatever you do, don’t adopt a list of best practices without evaluating their relevance first.
Activities that fit together and reinforce each other
Strategy involves creating “fit” among your activities, that is, how they interact and reinforce each other. Activities that fit together can’t easily be imitated. Let’s look at an example.
Let’s consider a fictional example, say that one of the activities of the company is to run a solid logistic chain, operated 24/7 across Scandinavia. That might mean that you in IT would like to change some of the activities related to support, perhaps allow employees to work from home so that your key employees can easily be reached during the night, establish a centralized operations center and enforce a four-eye principle when it comes to all maintenance and changes to the IT systems. If you would only have had key personnel available at business hours, when they aren’t in meetings and allowed people to work unsupervised without quality control, you would agree that there would have been a poor fit between these activities.
Another fictional example is a business that needs to move fast when it comes to service development because customer loyalty is low and the market changes rapidly. You might want to design your software development activities so they are agile, which allows you to respond quickly to changes in the market landscape, and you might want to remove requirements, standards and the need to use only approved software libraries so that the dev teams are more autonomous and self-reliant when it comes to decision making. If you’d kept the old compliance requirements and the standards in place, you might not have been able to move that fast.
Plan. Do. Check. Adapt. World domination, sounds like something Deming should have said. But all jokes aside, continual service improvements should be a part of your strategy. Design tests, measurements and metrics to feed into your activities to improve them, check the validity of your assumptions and do things better today than you did yesterday. There are a ton of frameworks to implement, just pick one and go! Remember that Adam Savage of Myth buster fame said: “Remember kids, the only difference between screwing around and science is writing it down” referring to the results of the experiments he was making.
Wrapping it up
At this point you and your business counterparts should be able to summarize your decisions and findings easily in a single page or two so that it’s easy to understand and communicate. It should contain concrete references to the business strategy, pass all of porter’s five tests and look good on paper.
Don’t forget though that writing it down is just the first step on the way, now you need to communicate, measure and adjust, and revisit your technical strategy every now and then. You can communicate using posters, working it into your departmental meetings, team meetings and talks and discussions with your employees. Changes in market conditions should trigger review of the business strategy and another iteration of the technical strategy should follow.
We hope you liked this short summary of how to make a technical strategy. If you don’t know where to start or would like some assistance, please don’t hesitate to contact us. We are determined to make our blog better so we appreciate any questions or comments.