CaseStudy - CreatingAnITStrategy
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1) The document describes a case study of creating an IT strategy for an organization. The initial state of IT was unfocused and under-delivering without an overall strategy or project management. 2) By building trust through delivering projects and gaining business input, a new IT strategy was created that focused IT on business priorities. This resulted in a 3,000% increase in profits while reducing IT costs by 60%. 3) Key lessons included the importance of collaboration, an iterative process, and changing IT KPIs and organization to align with and support the new business-focused strategy.
CaseStudy - CreatingAnITStrategy
- 1. CASE STUDY: CREATING AN IT STRATEGY AUTHOR: ALLAN AITCHISON ALIGNED IT CONSULTING
- 2. Case Study:Creatingan IT strategy 1 CASE STUDY: CREATING AN IT STRATEGY EXECUTIVE SUMMARY IT strategy and business alignment have been buzzwords in IT for many years. The importance of IT strategy is to create a vehicle to prioritise IT on what the business needs – usually seeking and supporting business advantage and increasing profit. IT strategy and the business plan it supports will change over time – but through spending sufficient time to create the understanding and a common language to discuss it, greater economies of scale and project dependencies can be found which in turn reduce cost, complexity, risk and delivery timescales. Creating an IT strategy is iterative – gradually adding more detail as trust builds. In this case study benefits were already being delivered during the drafting process and as this process created an IT strategy which contained a self-funded profits increase of 3,000% while reducing the cost of IT by 60%, the acceptance process was brief!
- 3. Case Study:Creatingan IT strategy 2 THE LINKS BETWEEN BUSINESS STRATEGY AND IT DESIGN IT strategy affects the relationship between IT, the customer and IT ’s suppliers. In summary an agreed strategy will focus the IT organisation on what is required from the board and directly contribute towards the goals of the business. This raises the game of IT from an inefficient order taker to an organisation focused on contribution and measured against this goal. To make this possible – multiple levels of IT will need to communicate with the business from the IT leader to help desk staff and collaborate to improve the company. The strategy provides a coherent view of the priorities the business need and through this the shape and focus for the IT team. The team supporting IT operations are likely to decrease its budget as greater economies of scale and reducing overhead in internal processes will allow it to deliver with more automation and reliability as operable projects based on standardised technologies are handed over to skilled operational staff. The team supporting business change is likely to increase its budget as trust grows and the team tend to deliver more quickly and reliably as they become focused on a smaller number of profitable, concurrent projects. The organisation of the IT team will change as its focus and unique selling point will be its connection to the business and it follows that many elements of IT are commodity – so another element of creating a strategy is more likelihood of outsourcing to service providers, system integrators or cloud providers as greater economies of scale are found and service needs are better understood.
- 4. Case Study:Creatingan IT strategy 3 WHAT DOES AN IT STRATEGY CONSIST OF? An IT strategy underpins IT and it’s suppliers on supporting the business strategy and using methods and technologies to improve. IT can focus through taking more control of the change portfolio – using project dependencies across the portfolio of projects to recommend solutions to create an active business support organisation focused on profit to become a partner to the business it supports. IT strategies tend to be built on a forecast of between 3 to 5 years, with the detail being seen as complete in the near term with reducing reliability/detail as the forecast projects further into the future. IT strategies are an integrated set of views that are represented on the left. Each row is strongly influenced by the row above, but may also influence it. The IT strategy can cover this list of topics or a subset but as confidence in the strategy process grows, more areas may be included. The early elements are included towards the top of the diagram. Finding an appropriate level of detail is important. Most customers are more interested in cost and profit forecasts, they will want to understand the reason for change and why the ordering of projects, technology choice or changing the IT shape is important and all may need to be justified. A summary level IT strategy is normally required showing principle projects and their outcome is usually required – allowing the business to understand the scale of change and allowing a starting point to examine detail as required.
- 5. Case Study:Creatingan IT strategy 4 BACKGROUND In one organisation where I led the IT recovery, there was little or no project management office and no IT strategy, leading to no overall control of change and no target to aim for. The transformation from an unfocused, under-delivering organisation took building back the basics and then using trust created through delivery to support the transformation of the IT team supported by an IT strategy. MAKING THE CHANGE There was a pressing need to deliver a large backlog of projects to create trust in IT delivery and to deliver a list of interconnected projects as some were business critical (safeguarding 100% of revenue). Delivering this capability created a means to manage delivery and the team – freeing up the team to become more productive. Initial work with the business was built on a series of discussions with multiple user groups to find a vision for each business unit consisting of an ASIS (today) and TOBE (vision) view together with an understanding of the appetite for risk and cost. A simplified view was shown to key suppliers to gain an idea of cost and dependencies managed to reduce cost and risk. The resulting plan was shown to the business – with improvements based on feedback. The business had not received the level of service it needed from its principle service providers, which led to the drafting and acceptance of an updated set of service levels which in turn led to changed suppliers. The delivery of the project backlog, together with early strategy projects helped the business to see the advantages of the plan and that the plan was built on firm foundations. As the strategy was based on a self-funded increase in profit, while reducing the total cost of IT significantly it was seen as an excellent base to invest time in – with the initial 3 months set of projects happily accepted and increased levels of collaboration resulting in continual strategy improvement and IT delivery effectiveness and efficiency. Examples based on this case study and the IT strategy view model included in the previous section are included below. Some examples have to be obscured simply because of the initial state of the team.
- 6. Case Study:Creatingan IT strategy 5 In this example a vision of what was needed, mapped onto the highest level view of the company and the systems that support it. This view helps to capture the size of the change that would be required. In this example of budget and benefits forecasting, a series of high profile projects are shown separately on the scale on the left, while cumulative benefit is shown on the scale on the right (in blue). In this case it demonstrates a series of projects that deliver cumulative benefit – with the benefit of the second project improved by the first leading to a large increase in value.
- 7. Case Study:Creatingan IT strategy 6 This example of a target operating model was a simple view of how IT needed to change to allow one element would be constrained in size and contain staff that are deeply knowledgeable about the business, while another part of IT could be flexible in size, topped up by contract staff when needed. In this example, the technology needed to be understood and managed across a large estate. The tool shown collates various data from operational tools and compares a proposed technology roadmap against the estate – showing all exceptions. This view publishes future change of the estate, provides data for the management of the estate and the cost of proposed roadmaps. LESSONS LEARNT Creating, improving and delivering IT strategy is all about communicating a shared set of ideas and priorities, supporting IT align to these priorities and deliver business priorities. Some organisations need a long and deep process to find this data through to in one case writing an approved strategy in 2 weeks. As with many best practice frameworks – the reader should pick those elements that are most relevant to them. Putting in place an IT strategy is likely to involve a wide change – with changes affecting all of the IT team and is likely to affect staff incentives, training, supplier management and contract management. It does not have to happen at once – but building a coherent framework to shape the change allowing staff to buy in to the ideas and benefits needs careful consideration before publishing. Key elements of collaborating on an IT strategy are: A customer that can see the benefit of new ideas Reduce or eliminate IT inhibitors for change
- 8. Case Study:Creatingan IT strategy 7 Knowledge and experience of delivering an IT strategy – this approach is different to a traditional IT organisation with skills and experience vital to create the confidence from the business and supplier communities as well as IT itself. Supplier management Refreshing IT KPIs – to provide the data to find areas for improvement or justify expense but also to demonstrate the transformation. Consultative and iterative approach – IT strategy is built on consultation, using the best ideas from multiple sources. Regularly the greatest improvement comes from the responses to drafts.
- 9. Case Study:Creatingan IT strategy 8 ABOUT THE AUTHOR AND ALIGNED IT Allan Aitchison is an accomplished IT Director with multi-sector and international experience that blends blue chip client side and consulting experience. His experience in being able to focus IT organisations on customer needs has become key to his career and he is currently delivering this at Aligned IT Consulting. This case study draws from his personal experience and demonstrates how to focus a large organisation to deliver tangible improvement to the bottom line. ALIGNED IT CONSULTING – WHAT WE DO Aligned IT Consulting’s goal is to create a similar step change in IT for our clients. Our goal is delivering your vision, using our skills, energy, experience and Products. Aligned IT Consulting has used this and other experiences to create a series of products that can help Align IT and suppliers to the business it supports changing the aspiration from fixing problems to actively seeking and delivering value.