This blog post explores the second of three stages of my twelve step process towards an effective IT strategy. At this stage we look at defining the target IT landscape you would ideally like to achieve with your strategy.
At the heart of any strategy is the target landscape of systems and services that needs to be built in order to achieve the business goals. It is absolutely critical that this landscape is built not on the whims of individual departments and characters (including the CIO) but in a more holistic way aligned to the business objectives and also in a way to resolve specific issues. The old saying “if it aint broke don’t fix it” goes a long way in this stage.
Once again we can consider the four sub-areas within the strategy asking where complexity is causing issues, where costs are too high, where business objectives are not being met and where service levels are failing.
Step 2a – Reducing complexity and improving alignment.
The method we follow considers the complexity mapped out in the first stage by looking at the alignment of systems to the business processes and parts of the location. Testing the current solution set used within each step of the business process value chain is a good first step to rationalisation. The areas for change can be identified by asking key questions like – Should this process be covered by one system or many? Are there crossing and overlapping systems? Are there gaps? Are the systems aligned to the business locations, departments or products – and which would be correct? Where are the areas of highest cost, or bad service and is misalignment or duplication contributing to this? The end result of this process of consideration will be the key areas for change and the possible end results of simplifications or consolidations. At this stage what will change is known but not how.
Step 2b – Mapping target costs
Having an idea of the overall costs from the first stage will allow you to test against future budgets and the modelling of requirements. No strategy can be set without some kind of overall targets for IT spend. Defining the end operating costs and mapping this into the process areas and organisational areas defines a target operating cost model that any strategy must meet and be tested against.
Step 2c – Aligning to business objectives
With the understanding of areas for change and the target costs, these changes must also be tested against the target business objectives. Will the changes improve all the objectives or will some improve but others decrease in effectiveness? Testing each change area for an overall positive outcome will help prioritise the changes and eliminate areas that are not going to help achieve business goals.
Step 2d – Mapping to service targets and selecting system and service options
Finally the real target landscape is achieved by testing every single one of the individual systems and services for change. Many questions need to be considered for each system or service such as: Is it due an upgrade? Is this a minor change or a major new version? Should versions be eliminated? Can it or should it be replaced by an alternative system or service? Is the purchasing method the optimum? Could the asset be leased rather than purchased? Could an internal service be outsourced? Can service levels be adjusted and business goals still met?
Every change must be tested so that we assume it will improve services against business objectives and that cost and service targets will be met.
This gives a vision of where the IT landscape needs to evolve and an idea of the benefits against the business objectives. More advice about how to do this in my next blog.