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
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.
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
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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