It's Time To Kill Your IT Strategy

Yes, that’s right — I’m suggesting CIOs should stop working on IT strategy. The days of developing a technology strategy that aligns to business strategy need to be behind us. Today’s CIOs must focus on business strategy.

Lemonade StandLet’s face it: Does sound business strategy even exist today without technology? Most CEOs would likely agree that, unless you are running a lemonade stand, any successful business strategy must have solid technology at its core. The challenge for today’s CEOs is that, while planning business strategy in isolation from technology is sub-optimal, it remains the most common way business leaders develop strategy. And while there have been many great books about strategy, the specific challenges facing the CIO are largely absent.

That’s why Forrester has researched the ways in which companies develop technology strategy and also why we have developed the Business Technology Strategic Planning (BTSP) Framework. Our new BTSP playbook distills Forrester’s current research into an easy-to-follow guide that has at its heart the understanding that there should be no IT strategy, just business strategy with a technology component, or BT strategy.

Now you might think we’re crazy — after all, many firms, including Forrester, earn substantial revenue from advising CIOs on IT strategy. But as I see it, IT strategic plans belong in a museum.

In place of an IT strategy, every firm bigger than a lemonade stand must have a living, dynamic business technology strategy. It will be this strategy that drives future results of the organization and also that defines the future technology road map.

Of course the technology department (whether you call it BT or IT or something else) also needs to have an operating plan — the CIO's plan for how to execute the BT strategic plan. The operating plan must include the continuous assessment of the technology capabilities, people, and funds required to execute the BT strategy. This also forms part of the BTSP framework.

By collaborating across the business to develop BT strategy and not IT strategy, CIOs move beyond alignment and position the technology team at the heart of effective business strategy. Forrester's BTSP framework is helping CIOs rethink strategic planning.

As I write this, I'm working on a mini workshop on BTSP for attendees at the upcoming CIO Forums in Las Vegas and Paris, where we'll go deeper into how BTSP applies business capability maps to drive business strategy discussion. I hope to see you in Vegas in May or Paris in June!

Who knows, maybe soon even lemonade stand entrepreneurs could benefit from BT strategy.

 

Comments

This approach makes sense.

This approach makes sense. It's become increasingly important for line of business managers to have input and buy-in on IT strategy. As mobile technologies and unified communications become a core component of worklife, IT decisions have to facilitate the need to communicate and collaborate on the go, around the world, with access from multiple devices, and more and more, enabling frequent engagement with social media. Day to day work is accomplished through the smart and seamless use of technology.

The approach makes sense

Thanks for the feedback Lisanne. It's good to hear from people like you who understand where I'm coming from.
Nigel

High-Tech Lemonade Stands

Hold on there -- my daughter used to collect cell phone numbers so she could text all the neighbors when her lemonade stand was open for business! A product of the age, yes, but also a sign that even a kid gets it. The interesting conversation becomes how does BTimpact BI, or when is it fully brought under BI?

High-tech lemonade stands

Sam you are clearly blessed with a daughter destined for greatness!

From my perspective BI has always been an intrinsic component of BT. Good question.

Some IT groups have been doing BTSP for over 20 years. It's not new, it's just that now CIOs of all stripes can't afford to ignore it.

BTS & BTSP

Hi, Nigel, enjoy the post, I would say, the scenario of business strategic planning will start with: co-develp business strategy by both business and IT, will help keep everybody at the same page, then from EA perspective, BA may articulate the business strategy, processes.,etc, then further expand into BTS & BTSP, more naturally blueprint EITA, the principle is to keep all strategic planning consisent, coherent, will not lost in translation. thanks

BTS & BTSP

Thanks Pearl. Glad you enjoyed it. It's always good to hear from my readers. BTSP can also be used alongside the BMM model for documenting strategy.
Nigel.

strategy

Yep, totally agree. A fairly basic definition of strategy is 'where to play, and how to win, in order to maximize long term value'. Technology arguably is the the playing field these days, albeit a highly dynamic one, and also enables tactics that help companies win.

Strategy

Thanks for the comments Rob. Dynamic technology may lie at the heart of why so many businesses must rethink strategy almost continuously.

Agree - things should cascade...

Nigel, I must agree as far as an IT department internal to the enterprise it serves. In this case, the business goals drive strategies, programs and operational tactics, which therefore should cascade down to the IT goals, strategies etc. Where IT can innovate or forward look' its capability it should establish a feedback channel to the business that directly relates ideas on exploiting tech with the root business goal.

As for IT organizations that are in effect a business, such as a cloud service provider or similar, I suspect the cascade has fewer cataracts!

Goals should cascade

Hi Ian,

Thanks for the comments. In the BTSP framework we push beyond cascading business goals into IT goals. Instead we focus on the development of a single set of business goals with associated strategies and their technology components. The business goals may well cascade through various divisions and business units, but at each stage technology is an intrinsic component of the business strategy set to achieve the goals. IT is part of the business, not separate from it - as such the goals of the business are also IT's goals.

In cloud businesses, the IT capability which supports the business by providing technology capabilities for finance, HR, sales, marketing, etc., may not be the same as IT supporting the operational side of the business. Where it is distinct, it faces similar challenges as an IT group in any org. Regardless, the business goals are the same.

Finally!

Excellent commentary, Nigel! Our company's interest is more specific to Digital impact, but absolutely the same rules apply. It's striking how disconnected IT is from corporate strategy in many organizations. Among other benefits, I see this as a critical first step to help reduce the ever-present gap between the business and IT in planning and implementation. This integrated strategic approach would also be valuable in better identifying ownership and aligning funding much earlier and better aligning these to corporate strategy.

I would add that we too frequently see the inverse taking place, where companies chase the latest/greatest Digital shiny object with little or no plan or understanding how these connect to corporate strategy (or broader organizational or IT capabilities).

Keep an eye out for links coming from: (Digital Strategy group on LinkedIn - hyperlink removed by moderator)

Looking forward to seeing your Business Technology Strategic Planning (BTSP) Framework.

Finally!

Thanks Steve. My personal aim is to eliminate the gap!

I also agree that we all too often see business executives of all stripes pursue the shiny new object without connecting it back to goals and strategy. We can see this play out right now in the approach many companies have to social and mobile. Both are without doubt valuable for almost every organization - but initiatives around such technologies must be connected to moving the organization toward a specific goal or set of objectives, and they will ideally have some measurable business outcome.

It's also the case that some broad enterprise-wide initiatives, like employee social/collaboration, are sometimes needed to improve the overall effectiveness of the organization - their impact is derived from making tiny incremental improvements across the entire organization. In these cases, the executive team must make a leap of faith that the benefits will play out over time and show up on the bottom-line as a result of more effective and efficient employees. Sometimes the cost is so small relative to the size of the organization that it's a "no-brainer".

Right On

Social, mobile, collaboration, intelligence, innovation, service, sales...the list goes on, and so does the number of one-off efforts (typically project-based) without an agreed (and funded) executive vision, let alone a coherent story about how all of these and other technologies/capabilities connect to move the organization forward. Thanks for putting a stake in the ground on this topic. Much needed and very well articulated. Again, looking forward to seeing your new framework soon.

Finally!

Moderator comment: your duplicate comment was removed (on the assumption it was accidentally posted twice) and also your link promoting your group. If you would like to post a link to a post that furthers the conversation, we'll be happy to include it in your comments. Thanks for being engaged.

Nigel, you make great points

Nigel, you make great points in your post. You wrote: "Unless you are running a lemonade stand, any successful business strategy must have solid technology at its core." Agree. However, there is critical link or layer between a "successful business strategy" and "solid technology." That critical link is information - a point emphasized in all enterprise architecture frameworks.

Instead of the Business Technology Strategic Planning (BTSP) Framework, why not call this the Business Information Strategic Planning (BISP) Framework?

This is more than a semantic difference. Instead of making technology the business focus (as implied by BTSP), make information the business focus. Technology exists to support the identification, capture, analysis, and dissemination of information that's important to not just to the conduct of business but also to the achievement of a business' objectives. This difference reinforces the importance of a very critical question for any business: How is our technology supporting our information needs? This recommended change also aligns with the "I" in CIO, Chief *Information* Officer (asterisks added for emphasis).

We are overdue in explicitly reinforcing the point that information is a very important driving factor in a business' success. In addition to leveraging existing legacy information systems, organizations are starting to look at the technologies associated with analytics, data, and big data.

The value of these technologies and associated investments will not be realized unless these organizations focus on how to best optimize and leverage the information and insight that these technologies can yield. Let's rightly make information the prime focus, not the technology.

RE: Technology vs. Information

Sanchez, your point is certainly not lost on me. I myself was a CIO in the days when IT was called MIS: Management Information Systems (or Management Information Services in my case).

We have debated this question within Forrester. In the end we settled on technology as a broader term to reflect that we're concerned with more than information. On balance (and it was not unanimous) we agreed that technology allows one to include pure technology like mobile devices, robotics, etc., as well as information technology. I realize this is not a universal definition.

In the case of BTSP, we're using technology in the broadest sense to include information technology as well as other technology such as robotics, plant automation, etc.. And as we say around here - that particular ship has sailed.

I would add that the prime focus should be on neither technology nor information - it must be on business strategies and only by association their technologies/information.

EA vs. BTSP (or BISP)

We have a few other great forums brainstorming on how to revitalize EA, since today's EA has about 70% of failure rate, especially, At many cases, SP is key component of EA. now, the change is accelerated, the business can no longer afford three or five year strategic planning.

How to make strategic planning a true PLANNING, not PLAN, to continue transform business, also keep every party, both business and IT at the same page all the time, is a great challenge. thanks.

EA vs. BTSP (or BISP)

It's fascinating to me that different groups within the IT world seem intent on elevating their game by getting involved in strategic planning - which ought to be a good thing. For some companies with a strong EA group, it is EA which establishes the role of the Business Architect to focus more on strategic planning. In other orgs where the PMO team may be stronger we see the PMO and business process experts looking to elevate themselves to a more strategic role. In other orgs it is the business relationship manager (BRM) who steps into a more strategic role as a business strategist. (For more on this see “which roles develop strategies” http://community.forrester.com/thread/5755?tstart=0).

What is clear is that there is a need for skilled people in the technology team to take on the role of technology strategist. As I see it. the role is about as close to being a consultant without being a consultant. (See "are you right for the strategy job" http://community.forrester.com/thread/7701?tstart=0).

The reality of all business is that it changes continuously - nothing is as constant as we would like it to be from a technology perspective - and this is true for technology and non-technology companies alike. In today’s world, the only reality is change, so our strategic planning must evolve.

Keep your IT strategy, but know your role.

Nigel, I like this post. As is pointed out in Great CEOs Must be Either Technical or Financial, talented executive leaders' expertise usually spans several functional areas. The best CIOs are really just technology-oriented CEOs. In other words, they're people who have a deep understanding of the core business units, and have assumed the authority over the process of applying technology in pursuit of the strategic plans that make the business stronger. Technology is a secondary business function (even at companies like Facebook). The key points in your post are obvious when you think of things that way, but few people do, including many of the leaders themselves.

Keep your IT strategy?

Exactly right, the best CIOs are like technology oriented CEOs - some even go on to the CEO role (but not many).

The reason it's time to kill IT strategy are many - but principle among them is that it distracts from the real focus - business strategy, and confuses us into believing IT is separate from the business. I'm not suggesting that we do away with many of the traditional things in an IT strategic plan like the CIOs plan for the org or the technology budget and architecture roadmap - these are all important. In the BTSP we bundle all the elements of the operating side of the technology department (deciding on which IT capabilities are required, sourcing capabilities, optimizing the org structure, establishing the financial plan, putting in place governance, etc..) into the technology operating plan. In BTSP, the emphasis is on maintaining an operating plan so as to enable the evolving business technology strategy.

I love the focus on business

I love the focus on business strategy as you mentioned here. There seems to be a gap somewhere when it comes to talks of IT and Business. Now, with this 'future technology road map' you talk of, there will be change. The problem, I guess, is just how open are we really to the idea of change... and how fast can we adapt?

A focus on changing business

Shaleen, you are right to identify change as one of the key challenges here. Traditional IT strategy approaches assume business strategy is a realtively static thing that changes infrequently. The reality is different, as anyone who has managed a P&L in a public company will tell you. While an organization's high-level mission and goals may remain relatively constant from one year to the next, the strategies business units execute to achieve their annual goals are constantly reviewed, tested and modified as needed. Changes are made sometimes several times a year in reaction to external market forces. And this pace of change is speading up. How we think about planning technology must match the reality of business, with change as a constant, while balancing the need to plan a stable, efficient architecture. Ultimately this means that the architectures many organizations need may not be the least expensive to build and maintain - instead they are likely to prioritize speed and flexibility to handle change over cost.

Nigel- this is a refreshing

Nigel- this is a refreshing approach. Align your security strategy with your business strategy has been something we have heard quite a bit in the past. Now, we are starting to hear more focus on the need for IT and Security to enable business objectives and manage business risks. So this framework would be beneficial for organizations looking to develop a strategy that can help their business operations as well as include the advanced technology and security elements needed for today's operations.

Managing Risk

Hi Bindu,
Managing business risk is always going to be balance between the firm's exposure to risk and the tolerance of executives to such exposure. IMO the role of IT and Security professionals is to help executives understand their risk exposure and the various mitigation options so executives may make informed decisions on risk tolerance and mitigation tied to business outcomes. We have embedded this concept in BTSP by challenging IT professionals to assess the technology risk and complexity inherent in each strategy choice.
Nigel

Yes and varies upon the industry the company plays in

Nigel

Great post. I am sure everyone will agree to the mindset that you have elaborated.

The fact is that if you compare these times to a decade ago, business knows a lot more about IT and they expect the IT organization to know more about the business. One has to be thinking of the business model, how the company makes money and then speak that language to enable growth. One of my good colleagues and a CIO himself once remarked, “When you walk into a restaurant and ask, ‘Where’s the bar?’, they show you where the bar is and walk you there. They do not say, ‘Here, read the manual or blueprint of the architecture of the building.’” Creating this kind of customer-centric culture is key to clearly understanding internal and external customers and adding value accordingly.

Of course, a company’s position on its spending is dependent upon many macro factors like number and size of competitors, industry growth rate, rate of change, industry margins/pricing, and product differentiation factors—physical products or knowledge assets. All these determine how much a CIO needs to on the business spectrum.

Great piece! Enjpyed reading it.

- Ashu ( www.AshuBhatia.com )

varies by industry?

Hi Ashu,
Yes you're right that people outside of IT know more about technology than they did 10 years ago - it's partly what's driving the shift in IT. The expectations of the CEO are changing over time and we're seeing it in more and more companies with the passage of time. 30 years ago there were some CEOs who understood the strategic value of embedding technology in the business, but many more that simply viewed technology as a necessary evil - a cost overhead to be minimized. Just because we find more progressive CEOs in specific industries does not mean the opportunity is industry specific - it's just that it is easier to see the impact in some industries - others require more strategic vision. Even though some industries are more conservative, I believe the opportunity is still there. The CEO plays a much greater role than the industry in deciding the importance of technology in the company strategy.
Nigel

BTSP

Like the comments... I'm in the middle of a strategy excersize right now, and I'm primarily focusing on business strategy. Wondering when BTSP will be published and if there is anyway to get a prerelease draft?

Thanks.

Publication date?

I hear you Doug. I know components should be on our website soon but I don't have specific dates (it's out of my control). If you would like I can walk you through the playbook and see how I can help you through an Inquiry - would that help?
Nigel

The Strategy Playbook is now published

You can find our BT Strategic Planning playbook here: http://www.forrester.com/BT+Strategic+Planning/-/E-PLA103