Forrester, nmsu, exante financial services, and others: getting real

Please read the case and answer 4 questions at the end:

 

Forrester, NMSU, Exante Financial Services, and Others: Getting Real about Strategic Planning.

 

It must be nice to be the CIO of a FedEx, or a GE, or a

 

Credit Suisse, where IT and the business are so tightly

 

aligned you can barely tell the two apart. In such companies,

 

corporate leaders understand that IT is a strategic asset

 

and support it as such. These are places where the CIO is

 

encouraged to spend the majority of his time on the Big Picture.

 

If one works in that kind of IT Wonderland, getting a

 

good strategic plan down on paper is probably a snap.

 

The vast majority of CIOs, however, work in places where

 

the business itself may not have a clearly articulated strategy.

 

In such companies, corporate leaders don’t care too much for

 

IT, much less value it strategically. These are places where the

 

CIO’s time is devoured by day-to-day operations and there’s

 

little time left to look beyond the next few months. If one lives

 

with that kind of tactical IT reality, getting a good strategic

 

plan down on paper is practically impossible.

 

For most CIOs, putting together an IT strategic plan—

 

that annual road map to guide IT through the next 12 months

 

and beyond—is dauntingly hard. Although the odds may be

 

stacked against the average CIO, the truth is that those IT

 

leaders who don’t master the art of strategic planning won’t

 

last long. “The purpose of the IT strategic plan is to improve

 

the business-IT relationship. A CIO needs it to communicate

 

with the business, to tell them that he understands the company’s

 

needs and to set expectations,” says Alex Cullen, Forrester

 

Research vice president and research director.

 

“A CIO can’t succeed without it.” Michael Jones, CIO of

 

the National Marrow Donor Program, calls it “the business

 

case for IT.”

 

The cardinal rule in developing an IT strategy is to

 

connect it to the business strategy. “The business should

 

have desired outcomes—market share gains, higher customer

 

satisfaction levels, shortened cycle times,” says independent

 

IT analyst Laurie Orlov. “IT has to figure out

 

where they factor into that.” Yet for all the whining CIOs

 

have had to endure about how IT needs to be more strategic,

 

the businesses they support are often in even more dire

 

strategic straits. “Businesses very often don’t have a strategy.

 

Or they do, but it’s very high-level and vague. Or they reserve

 

the right to change it. Or they have some strategies,

 

but they don’t apply to all the business activities taking

 

place,” says Forrester’s Cullen.

 

So, CIOs who operate in strategy-free organizations are

 

off the hook, right? Wrong. “It’s the ultimate cop-out for

 

CIOs to say they can’t do an IT strategy because the business

 

doesn’t have an articulated strategy,” says Orlov. Fuzzy

 

business goals present a challenge, but smart CIOs should

 

see that as an opportunity. “People in the business are very

 

focused on operations or other minutiae,” says Dave Aron,

 

vice president and research director for Gartner Executive

 

Programs. “IT can help the business articulate what will

 

help it win and how IT fits into that. Then you go from just

 

being an order taker to actually influencing overall strategy.”

Michael Hites knew the lack of vision at New Mexico

 

State University (NMSU) would be a challenge. “If you

 

don’t have the highest level plan in place, even the best IT

 

strategic plan won’t work,” explains Hites.

 

“I’ve seen it; I’ve lived it.” When he became CIO in

 

2003, NMSU’s plan was no different from any other school’s.

 

So Hites’s first IT strategic plan was standard and risk-averse.

 

IT plodded along doing good work but nothing particularly

 

strategic. In the absence of a more ambitious university plan,

 

there was nothing to anchor a real IT strategy, says Hites. “If

 

you stick your neck out [in that environment], the university

 

may or may not be behind you,” he notes.

 

Then a funny thing happened. After several years of

 

bugging people about the lack of a strategic plan for the university,

 

Hites was put in charge of strategic planning for the

 

entire university and named vice president of planning and

 

technology.

 

Hites and his team have lots of great ideas—about $15

 

million worth of them, he says—but his organization is

 

“funded to the tune of half a million a year.” The question

 

he’s faced with each year is “how to spend that little bit to do

 

something strategic. If the university has the ‘mom-and–

 

apple-pie’ strategy of ‘helping students succeed’ or ‘increasing

 

research,’ anything you do is going to foster those objectives.

 

And you can never be sure you’re making the right choices.

 

But if a university steps out on a limb and says, ‘We will have

 

best online education program in criminal justice in world,’

 

then that becomes the strategic focus,” says Hites.

 

“It can be appropriate for the CIO to help push business

 

along in terms of strategy,” says Forrester vice president and

 

principal analyst Bobby Cameron. That doesn’t necessarily

 

mean the CIO takes on a second full-time job.

 

When Kelly Clark joined Exante Financial Services, a

 

financial services provider for the health care industry, he

 

wanted to change the IT strategic planning process.

 

“Generally, it’s done at the end of the year,” explains

 

Clark. “You look at the budget, see you have X number of

 

dollars, and figure out what you can do. It’s reactive.” Clark

 

wanted a proactive process, a “business overlay that said,

 

‘here’s what the market is looking for, here’s what we have,

 

here’s what we need.’ ” Exante had a business road-mapping

 

process but no business and systems strategy, so Clark told

 

his CEO and CFO they needed one—and they bought it.

 

“So off we went,” says Clark. “We created an enterprise strategic

 

plan and IT became a piece of that.”

 

Bethesda Lutheran Homes and Services (BLHS), a

 

faith-based provider of services for individuals with developmental

 

disabilities, was a couple of years into a five-year organizational

 

strategic plan when Brian Tennant became its

 

CIO. The plan, however, was strategic in name only. “It was

 

generic: Be the best and grow by this amount,” recalls Tennant.

 

“But it was unclear why they picked the growth

 

number or how they would measure it. And they hadn’t paid

much attention to whether it was on track. Nothing was

 

grounded in reality.” Frankly, that didn’t matter much to

 

Tennant at first. BLHS had acquired Good Shepherd Communities,

 

based in Orange County, California, in 2005. It

 

increased its size by two-thirds, and there was a “whole pile

 

of modernization to do,” recalls Tennant, including adjusting

 

the core ERP system. Even with an overarching business

 

strategy, IT’s mission was clear: Integrate and upgrade.

 

Now that all that work is wrapping up, Tennant knows

 

it’s time to create a plan to guide his department of 10

 

through the next three to five years. But Tennant is not waiting

 

for the 105-year-old organization to come up with a new

 

five-year plan specific enough to guide IT; he’s helping

 

shape it. “I see myself as a member of the senior management

 

team who just happens to be in charge of IT,” says

 

Tennant. “So I’m taking the opportunity to weigh in early

 

and weigh in on all disciplines, not just my own.”

 

Senior leaders, Tennant included, are vetting the new

 

plan with the board, operating divisions, donors, and families

 

of those to whom they provide aid. The goal is to create what

 

they’re calling “strategic positioning statements,” such as attracting

 

a younger demographic as donors or expanding services

 

or creating financial stability. “I’m already starting to

 

think about how IT will fit into those goals,” says Tennant.

 

Exante’s Clark says that if strategic planning is important,

 

IT needs to put its money where its mouth is. “Often

 

the problem is financial,” Clark says. “Everything is focused

 

on capital expenses.” Clark says he has invested in people

and processes to make sure the IT strategic plan remains a

 

priority. “You need a dedicated team,” he says. “Most organizations

 

don’t assign IT strategic planning to someone as

 

a full-time job. Hence it doesn’t become a discipline; it becomes

 

a burden.” Clark made strategic planning the fulltime

 

responsibility of his directors. “Once the positions were

 

open,” he says, “we found people were itching to do it.”

 

“Someone in IT should be thinking about IT strategy

 

most of the time,” agrees Orlov. “And their job the rest of

 

the time should be making sure they’re connected to everything

 

that’s going on in the business.”

 

If an IT leader can set aside extra time now, the theory is

 

that strategic planning will become an organic part of the

 

company’s life and interactions. It will no longer be like a

 

series of appointments that you’d just as soon cancel—and it

 

will get easier.

 

“If you did a strategic plan for the first time last year,

 

you’ll find that this year it takes less time. And next year will

 

be even better,” says Cullen. “You can focus more time on

 

discussions with people and less time on the mechanics of

 

putting it together. It could even become the part you like

 

best about your job because that’s where you can talk about

 

what you want to do and why it matters to the organization.”

 

It could be fun—which is why strategic planning isn’t

 

really like a root canal. Root canals have no fun parts.

 

QUESTIONS:

1.Consider statements made in the case about business

 

 

 

often not having an overarching business strategy that

 

can serve as guidance for the development of a strategy

 

for IT.

 

 

2.How is it possible that companies get by without some

 

 

 

sort of stable and clear direction? What does this tell

 

you about the business and industry environment in

 

which they operate?

 

 

3.Dave Aron of Gartner notes that in some cases the

 

 

 

lack of clear business strategy provides an opportunity

 

for IT leaders to step in and help articulate it and the

 

role IT will play in the new strategy. This sounds like

 

a good thing for IT people. What is the downside of

 

being in this situation?

 

 

4. Why do you think IT’s success is dependent on the

 

 

 

overall business strategy of an organization? Why must

 

they be tied together ? Provide several reasons.

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