Q)

How to create an IT strategy and what components IT strategic

plans will have?

An information technology (IT) strategic plan is a document that details the comprehensive
technology-enabled business management processes an organization uses to guide operations.
It serves as a guide to IT-related decision. The plan also helps guide an organization as it
formulates its overall IT strategy. While an IT strategy focuses on how IT will help the
business succeed, an IT strategic plan is a roadmap to help the business implement those
strategies. The plan outlines areas where IT can contribute business value and where an
organization can gain competitive advantage by making the best use of technology resources.
The objectives outlined in an organization's IT strategic plan align with the organization's
goals and mission, but are pliable enough to accommodate new business priorities and
technologies that have the potential for driving business growth. It is important for an
organization's IT team to know its priorities and identify the IT projects that the business
should invest in. According to Gartner, an IT research and consultancy company, the plan
delineates what has to be done, in what priority and how the plan's success will be measured.

Components of an IT strategic plan

The IT strategic plan should outline a mission statement that states what it plans to achieve
and how the IT strategy relates to the organization's overall business objectives. Often the
first step to creating an effective IT strategic plan is to start with reviewing the organization's
strategic plan, which helps in identifying the areas where the use of technology can improve
operations.
The IT strategic plan should include a SWOT analysis of its strengths, weaknesses,
opportunities and threats to identify both internal and external factors that can affect IT's
ability to contribute to an organization's success. This process will also help analyze the gap
between where the IT department currently is in achieving its goals and what it wants to
achieve. The department can then identify the barriers and the resources needed to bridge the
gap.
The SWOT analysis also helps to identify any of the company's technological assets that
might be an unknown competitive advantage and that the organization should consider
investing.
Finally, it is important that the IT strategic plan be clear about its ultimate goals, including a
list of technology investments that the IT department deems a priority to contribute to the
organization's success. However, the plan should also include evaluations of the company's
current IT budget and allocate project-specific resources and responsibilities within the IT
department to meet these objectives.
Strategic plans can come in many different shapes and sizes, but they all have the following
components. The list below describes each piece of a strategic plan in the order that theyre
typically developed.
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Elements of the planning system

The following are the major elements of a sound and complete planning system:
1. Mission Statement/Purpose
This is a single sentence or paragraph that states the purpose of the organization. Why are you
in business? What is your business? What difference do you intend to make? What is your
unique niche? Note: sometimes this is called mission although most mission statements are a
combination of purpose and vision or intended outcome. In our view these should be
separated.
Example: Disney: To make people happy
Cargill: To improve the standard of living around the world
Merck: To preserve and improve human life
2. Core Values
These are the prioritized guiding principles or credo for everyone in the organization as to
how they should operate, what is important to always be or do. Core values are the 3-5 values
that are so fundamental to the organization and deeply held that they govern the choices made
even to the point of a competitive disadvantage, Core values are independent of what is
popular, universal, or competitive.
Example: Nordstrom:
Service to customer above all else
Hard work and individual productivity
Never being satisfied
Excellence in reputation; being part of something special
3. Long-term Vision
This is the picture of what it will be like when you get there. It is a statement of
accomplishment or condition you are seeking. It may be stated with a timeframe, e.g. By
2020, we will be . In the earlier example from Disney, it is a statement of the result they
always want, not just in the long-term, but today, and it works, i.e. Every guest will leave
with the same smile they entered with. In any case, it should represent a call to action, a
galvanizing statement for staff. It should provide a clear sense of direction and target for all
effort. The vision should be viewed as a real stretch, just shy of unattainable, yet real to
everyone. (For an interesting side note on a vision statement, read our Growth lines
newsletter: A Stretch Vision.)

Example: Microsofts vision early on: A Computer on Every Desk in Every Home.
Stanford University in the 1940s:To become the Harvard of the West.

4. Strategic Agenda
What is the discrete set of projects we are going to undertake in the next 1-3 years to move
toward our vision and make the needed improvements to our operations? The answer here is
the strategic agenda. Note the strategic agenda is not restricted only to projects that move the
company toward its vision, expand its client base, etc. The agenda also encompasses those
internal projects that fix the organization and give it the ability to tackle its long-term goals.
The estimation in the eyes of employees (the followers) of the quality of leadership in the
organization, including the board, will hinge in large measure on whether they view
leadership got the strategic agenda right. Do they understand the true condition and what
needs to be fixed? Have they developed a winning strategy that assures a secure future for the
company and all those who work within it?
5. Project Plans
For each of the projects in the approved strategic agenda, a project plan should be developed.
Each project plan should include the following list of elements.
One year target for accomplishment for the project; a result or condition to be achieved
Two or three year target for accomplishment on projects that will take more than a year to
implement
Metric: the measure that will show whether the project is having its intended impact, e.g.
growth in revenue, market share, reduced employee turnover, improved customer
satisfaction. Note that a solid metric is not one that measures whether or not a project is being
completed, but rather that it is accomplishing the intended goal. Not all projects will have a
metric, either because of the nature of the project, e.g. construction of a new building, or
because it is not time and cost-effective to do so, e.g. improved employee morale. Good
metrics are ones in which it is cost-effective and appropriate to gather and assess data on a
monthly basis. (For more on metrics visit these blog posts.)
Milestones to reach annual target: What are the major steps or milestones that must be
completed to reach the target? Most projects have 3-10 major steps. Management should be
spell out what each step is and when it will be accomplished during the year in order to reach
the target by year end.
Accountability: A member of management should be assigned accountability for each
milestone or major step on every project in the strategic plan. This individual is committing
to see the milestone through to completion, not necessarily to do all the work. The work can
be assigned to a team, but there should be one person who answers for that team in leadership
meetings. Ultimately, the CEO is responsible for the plan as a whole, and is the one who
answers to the board on progress.
6. Annual Budget
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The budget for the year is the financial map for accomplishing this years objectives
described in the strategic plan. The strategic plan makes clear what the priorities are and
where resources should be concentrated. The budget outlays the use of resources to complete
objectives and goals.
7. Capital Expenditures Plan
This is the plan leadership puts in place for replacement of facilities and equipment as
needed. The reason for such a plan is that if equipment suddenly breaks down and must be
replaced, the money has to come from reductions in funding for operations, unless you have
already planned for the replacement. This can be disruptive to the financial condition of the
organization and thus to operations.

Roles in strategic planning

Understanding each of the components of a strategic plan is vital to creating a solid plan.
Equally important is knowing the role of both the board and the management team in the
completion and carrying out of each of these pieces. Therefore we have explained below the
general roles of the board and of management in terms of each strategic planning component.

Role of the Board

To meet its responsibility to insure a viable future, provide clear overall direction and assure
that the needs of the customers are being met, the boards duties are as follows for each of the
seven elements of a planning system listed above:
1. Mission Statement/Purpose
To clearly define why the organization should exist, its purpose or what business we are in
is the responsibility of the Board.
2. Core Values
Core values also are the responsibility of the board to delineate and then to exemplify in all
their dealing with the organization staff, shareholders and public.
3. Long-Term Vision
The board is responsible to determine the picture of the future for the organization, i.e., the
vision.
These first three elements are referred to as the core ideology of an organization. It is the
boards responsibility to set this, although management is encouraged to participate in that
process. The core ideology will be modified little over the years, but may be updated when
warranted to insure that it is lived and realized. The core ideology serves as the touchstone
that guides priority setting, strategy, and assessment.
The boards role for each of the remaining planning elements includes the following.

4. Strategic Agenda
Recall that the strategic agenda comprises both strategic, vision-related projects and internal
improvement projects.
For those projects that move the organization toward its vision, the boards involvement is a
function of the level of expertise and level of understanding of the organization and its
strategic context. That is, can the board or some of its members add value to consideration of
strategy? If not at this point, getting there should be a goal in the boards development. If yes,
then board members should serve on committees of management and staff that assess the
strategic environment, define opportunities and threats to growth and then recommend a
discrete set of priority strategic initiatives for the coming year. At a minimum, the board
should assure that a sound strategic assessment process is conducted by management and
then approve or revise as needed the list of recommended strategic projects for the coming
year.
For improvement projects geared to operations, the board serves as a sounding board and
offers final approval to management on their recommendations as to where attention and
resources should be applied in order to realize improvements.
5. Project Plans
The board gives final approval to management of the projects, targets, metrics and milestones
developed in the strategic plan. If done well, the set of project plans form a type of contract
between management and the board as to the work committed to by the organization in the
coming year. Regular review of this contract can keep the board current on progress and
catch potential problems early.
6. Annual Budget and Capital Expenditures Plan
The board is responsible to adopt a financial plan. This includes an operating budget and a
capital expenditures plan. Again, the level of involvement of the board will range from
simply approving the work of the management team on one end to active involvement in
committees that work on preparing the budget. Where, the board is on that scale is a function
of the expertise and understanding the organization amongst board members. If the board can
add value to the exercise, be more active. If not, they assure that it is being done well by staff.
Involved in the budget exercise are major policy questions such as insurance levels, salary
scale, employee incentives and benefits.

Role of staff
The role of staff in planning does not alter with the level of competency and active
involvement of the board. Depending on their knowledge level, members of the board are
either partnering in the processes that are spearheaded by management or only approving the
results of those processes.
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1. Mission Statement/Purpose, Core Values and Vision (i.e., the Core Ideology)
The board is ultimately responsible to develop the core ideology. However, management is
encouraged to participate and lend their expertise in the discussion. Once developed, it is the
responsibility of staff to incorporate these elements into both the work they do and the way
they do it. In particular, when management begins its assessment for the strategic agenda, the
vision should be a source of direction on where the strategic projects should take the
organization.
2. Strategic Agenda
Management completes a strategic assessment that evaluates how well customer needs are
being met, how the organization stacks up against competitors, uses technology and responds
to political, socio-demographic, and economic trends. From this assessment should come a
recommended set of priority initiatives for growing the organization and/or improving
services to customers.
Also in developing the strategic agenda, management completes an internal assessment that
gives the board a full report on the condition of the company. Where can performance,
morale, profitability, quality, and consistency be improved? Included is the determination of
what improvements to operations are needed. Again, management should be assessing how
well the organization is performing on the current strategic agenda or set of products/services.
Are we efficient? Is our quality high and consistent? Is our profitability where it should be? Is
our morale high? Are our systems effective? There are a myriad of questions to be answered
to truly understand the condition of the organization and then to define areas where attention
and resources should be applied in order to realize improvements
3. Project Plans
Management develops detailed project plans for each project on the approved strategic
agenda for the coming year. The plans can be tracked by the board, so that members can
determine whether progress is satisfactory and if projects are meeting expectations. Included
is the definition of measurement methods for evaluating whether the strategic and
improvement initiatives are having their intended impacts.

Conclusion
Strategic planning sets the course and desired future for an organization. It is the anchor to
which staff and leadership can come back to again and again to say This is who we are. This
is what we desire to achieve. A solid strategic plan should become both a key management
tool for the staff and a performance contract between the board and management.