fruITion: Creating the Ultimate Corporate Strategy for Information Technology

By Chris Potts
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About this book

FruITion discusses the problems faced by a CIO in today’s corporate world and provides solutions for integrating IT into business objectives to improve the business value.

FruITion begins by stressing the importance of strategy to cover all the IT the company uses. Next, you will identify types of strategists using Graham’s Pyramid and learn the importance of shaping the strategy as per the company’s present condition. Then, you will study the basic strategy framework and formulate the strategy through re-iteration and evolution. Using the ‘de facto’ investment, you will drive discussion of strategic priorities to take maximum advantage of investments. Next, you will discover the advantages of plans B and C, and the benefits of using the strategy to test the relevance of the industry's best practices.

By the end of this book, you will be able to design successful corporate strategy for information technology.

Publication date:
November 2008
Publisher
Packt
Pages
216
ISBN
9780977140039

 

one

Thursday Morning

Head office, London, England

 

Juliette’s reaction to our IT Strategy was even harsher and more provocative than I’d expected. After the usual pleasantries she took an angle she hadn’t used before.

“What the hell are we supposed to do with this? None of us have time to read seventy-eight pages of wiring diagrams, techno-speak and IT organization structures, let alone understand what it all means in practice.”

“They’re not wiring diagrams, they’re business process maps, architecture blueprints and technology roadmaps. And anyway, the section on business strategy and processes isn’t techno-speak.”

“Yes, but we know all that anyway. Why do you guys insist on telling us on the one hand what we already know, and on the other what we’re really not interested in?  Whatever. These look like wiring diagrams to me. What is all this trying to tell me?”

I held up my copy of the Strategy. “This is our IT Strategy….”

“What is?”

“You interrupted me. I was answering your question.”

“Yes, but leave out the blindingly obvious will you. I can see this is a paper about our IT Strategy, it says so on the front. I read that far. But can you please just tell me what our IT Strategy actually is?”

I thought about challenging her statement that the document she was holding, that had taken us so much work to produce, was just a paper about the Strategy. As far as I was concerned, it was the Strategy. Wisdom prevailed. Instead, I said “It’s a five-year roadmap for our business processes, IT systems, IT organization, and IT sourcing, aligned with the company’s business strategy.”

“Why?”

“Why, what?”

“Why is our IT Strategy a five-year roadmap for our IT systems, etc, etc?”

“Because that’s what IT Strategies are. It’s best practice. External benchmarking endorsed last year’s strategy with flying colors. And we’ve been getting excellent coverage in the media.”

“Why is media coverage part of our IT strategy? Do you have a section on that?”

Two questions at once. I decided to answer the second one. “No, but everything we’ve done has been approved by Corporate Communications.”

“No doubt it has, but that doesn’t mean we’ve agreed that it’s part of our strategy. So how can you align your IT roadmap for the next five years with our business strategies?”

“Well, each member of our IT Business Partnerships team sits down with their customers every quarter and gets an update on their business strategies. Our IT business analysts are involved in all the major projects. Once a year we revise the IT Strategy and re-prioritize the IT budget to make sure it’s all still aligned.”

“Customers?”

“Pardon?”

“You said customers. What are your people doing sitting down with our customers and talking about strategy.”

“Not your customers, ours. Meaning you and the other business executives. You said we had to run IT like a business. Ok, so perhaps I should call them our partners, not customers.”

“So am I your partner? Is Graham? James? Marianne? I thought you worked for me. Aren’t these people your colleagues?  I didn’t mean you to run IT like a separate business. Why would I want you to do that? Never mind. That’s probably a conversation for another day. So when you’ve revised the IT Strategy and reprioritized the budget, then what?”

“Then we deliver it.”

“Deliver what? Each business strategy, the IT roadmap or the IT budget?”

“The IT roadmap and the IT budget. They deliver the business strategy.”

“Who?”

“The business. Tom, Martin, Debbie, William…..”

“So you deliver the IT roadmap and our Managing Directors deliver the business strategies?”

“Exactly.”

“So what do you do when they have to change their tactics?”

“Like I just said, every quarter we…..

“I heard. But they probably have to change their tactics every day. How do you handle that? I would have expected your roadmap to be the sum total of all of theirs, evolving all the time. Surely they’re the people best placed to drive our plans for IT, especially as they’re the ones that pay for it all. This isn’t the old days, when only you and your people knew what IT was best for us. It’s the other way around now, in case you hadn’t noticed. So if the businesses are not driving your roadmap, who is?”

“The company’s strategic business drivers, plus the technology refresh cycle.”

“That’s what, not who. If we’re not driving your roadmap, presumably it’s the IT suppliers. That sounds like the tail wagging the dog. Anyway, enough about roadmaps. That didn’t do it for me. Back to my question - so what is it? What is our IT strategy?”

“I’m sorry, Juliette, I’m not sure what you’re asking me.”

“I just want you to tell me in one sentence what our IT strategy is. I could tell you in one sentence what our overall Corporate Strategy is and I just want you to do the same for IT. I really don’t have time to read your paper and I’m not sure I would understand it or find it interesting if I did. And I don’t think I’m the only IT dummy in the Executive Team.”

Seeming to realize that her passion was getting the better of her, she stopped talking for a moment then continued, “I’ll tell you what, let’s get Michelle to make us a coffee, I’ll pop to the ladies room and give you a couple of minutes to think. I’d like to see if we can sort this out.”

Juliette stood up and walked out. Almost immediately, her Personal Assistant (PA) Michelle came in, walked over to where I was sitting, stood over me and smiled. “Same as usual, Ian?” I just nodded.

About ten minutes later, Juliette came back. “Sorry I was longer than I expected. I called in to have a chat with Graham.”

“That’s OK. I needed the time anyway. I think I can answer your question, although it’s a bit wordy. How about this: our IT strategy is to deploy technology that enables the business to create value for our customers and investors.”

“Hold on while I sit down.” She sat down, picked up the Strategy, held it up sideways between us, leaned forward and asked not unkindly, “Now, please show me where it says that.”

“It doesn’t, not in so many words, but that is what it’s really all about.”

“Maybe it should say it then, so we could all have a healthy debate about whether we wanted that to be our strategy and what we all need to do to achieve it. Anyway, thank you. My turn to do some thinking. Drink your coffee - how about a biscuit?”

I drank half of the coffee that Michelle had brought and ate an Orangy Crunch. Juliette always has Orangy Crunches. She’s a non-executive director of the company that makes them, and a few other companies besides, but I’m sure that’s not the reason she eats them and hands them out to everyone.

After an eternal minute sitting with her head lowered in thought and stroking her mouth with her right hand, Juliette briefly looked up over my shoulder and out the window, then caught my eye. “I like the bit about creating value for customers and shareholders. I don’t like the bit about enabling, and I’m not sure why it bothers to mention ‘the business’ as if we’re someone else - it’s our strategy, after all. Isn’t it?”

“What’s wrong with enabling?”

“It’s not strong enough. None of our other strategies are about enabling, they’re all about delivering.”

“This is about deploying IT that enables the business to create value. So it is about delivering. And the wiring diagrams - as you call them - are there to show everyone the IT we need to deliver for the strategy to be successful.”

Juliette laughed, “Good try. But that’s my point. Delivering, or deploying as you called it, stuff that enables us to create value for customers and shareholders is simply not enough. We have to actually deliver the value itself or our strategies aren’t working.”

“Our IT strategy can’t do that.”

“Why not?”

“Because Information Technology, on its own, delivers no value.” 

She paused for about three seconds. Given the speed with which she could think, that meant she had explored any number of mental connections before she spoke again.

“That’s really interesting, Ian.” she said, “Now I think we’re getting somewhere. So traditional IT strategies are about delivering technologies that enable us to create value, but stop short of actually creating that value because IT on its own can’t do that. It sounds like we - the people you keep calling the business - need another strategy that’s about us creating value by exploiting the IT that people like you deliver. Or something like that. We need to make what you said our first strategic principle. What was it?” She took a red pen from her desk drawer and wrote in capitals on the front of her copy of the Strategy, speaking the words as she went, “INFORMATION TECHNOLOGY, ON ITS OWN, DELIVERS NO VALUE.”

I was still contemplating her alternative strategy.

“But that’s not an IT strategy, in the traditional sense.”

“Well, we’ll just call it something else then. Let’s call it, er, our strategy for exploiting IT. Corporate. Our corporate strategy for exploiting IT. I like that.” I didn’t. I had a feeling I was about to become the first bit of corporate IT to be exploited.

However, this was a different Juliette. Since she had come back, she was calmer, more pensive and so far wasn’t swearing. She was looking into my eyes instead of right at them; her own eyes were shining.

She appeared to suddenly switch subjects. “That IT budget you talked about prioritizing. What is it – capex, opex, P&L, cash1… what? I’m sorry, I ought to know this but I’ve not been that bothered until now.”

“The IT budget is the running costs of the central IT department. Salaries, accommodations, external suppliers and so on. We capitalize as much of the project-based costs as possible and recharge everything to the business units.”

 

1 capex = capital expenditure; opex = operating expenditure; P&L = Profit and Loss; cash = the actual money received and spent by the company.

“So it’s not everything we spend on IT as a company? What proportion of the total is it?”

“I’m sorry, I don’t know. I’m not sure what this has to do with strategy.”

“Everything.” Juliette paused, still thinking calmly at breakneck speed. “Damn, I wish I’d thought about this before. Listen. I want you to go and talk to Graham. I told him I might be sending you along when I popped out earlier. Spend some time together. Let him help you start again and come up with a better strategy than this. Then both of you come back and see me. Michelle?”

“Yes?”

“Michelle, book a two-hour session with Ian and Graham for the end of next week. Call it ‘Review of the draft Corporate Strategy for Exploiting IT’. Ian, you can tell me about your new strategy then.”

“That’s quick.”

“I think you’ll find that it gives you plenty of time to sort out the basic strategy, especially with Graham helping you. If I like it, and then the other executives like it, we can add more detail later, if we want to. Do you know, I’ve just realized something that I‘ve been wondering about IT for ages?”

“What’s that?”

“Why nobody really values what you lot do. It’s time we changed that. See you next week.”

 

Observations

·         A strategy document is not the strategy.

·         The language you use is taken as evidence of your mindset.

·         If your company has a strategy for IT, make sure its scope covers all of the IT the company uses.

·         You should be able to summarize your strategy in one meaningful sentence.

·         If you have an IT roadmap, make sure it’s demonstrably driven by your company’s strategies and tactics – not those of your IT suppliers.

·         If you run IT like a separate business, expect to be treated like one.

 

About the Author
  • Chris Potts

    Chris Potts works with executives and CIOs in industry-leading companies around the world, formulating and executing the new generation of IT corporate strategies. He delivers public seminars that are founded on his own breakthrough work with clients, and has provided training to some of the world's leading consultancies.

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fruITion: Creating the Ultimate Corporate Strategy for Information Technology
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