Challenge

In a 2018 seminal research article, McKinsey explains that:

“The pace of change across the business landscape is unrelenting. Technological, economic, and political disruptions are requiring a rethink by most companies of where and how they compete, what organizational model they need to keep up, and where they must build capabilities. Annual strategy reviews need to be compressed to a quarterly time frame, with real-time refinements and sprints to respond to triggering events.” McKinsey

Other strategy advisories agreed and released their own supporting statements. Deloitte says:

“The pace of technology change has accelerated so quickly that in many cases, one-year planning cycles are no longer applicable.” Deloitte

Across the board, one thing is clear: Strategy at the current pace is a threat to survival. Organisations that cannot set and course-correct strategy on at least a quarterly basis will cease to exist within the next decade.

Building a large, complex IT Strategy Roadmaps is no longer sustainable because intentions and situations are changing too fast to be encumbered with time-bound, rigid plans with vast resources

and capital allocated against them. To survive the current pace of change, protect their license to operate and be relevant in the future, organisations must behave more agile and fluid where there is no fixed target state, instead organisations continuously adapt to an evolving future state and dynamically allocate resources in real-time to current, emerging and anticipated situations.

Laggards are going out of business – 52% of Fortune 500 from 2000 do not exist today. For those who can achieve this (termed “business agility”), there are rich rewards to be had. The same research has shown that organisations that have achieved agility can pivot within days, hours or even minutes as new threats and opportunities emerge, consequently they outperform peers 1.5X financially and 1.7X in non-financial measures. Since the dominant driver of large-scale disruption today is in Information Technology, its never been more important than now to link Business Strategy and IT Strategy (and Digital Strategy, for organisations that treat it as a separate activity).

“If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.” Jeff Bezos

Yet most companies are unable to set strategy more than once annually and continuously review/course-correct/perform real-time interventions. The primary contributing factor is the traditional strategy creation process itself which has seen little digital focus and consequently is stuck in the Victorian era. This traditional process is:

  • Episodic – every few years, annual at best in leading companies.
  • Manual – studies show the data collection phase alone takes up 50% of the IT Strategy effort and time when attempted with Microsoft Excel, with further wastage in collation and visualisation phases.
  • Slow – on average it takes nine months to produce a complete Business-linked IT Strategy for a global company with three business units by an organisation that is otherwise busy with business-as-usual. The Strategy is likely dead-on-arrival (DOA) as the position has shifted by the time its produced and ends up explaining the obvious – what the business is already doing rather than outline what the business will do in the next trading period.
  • Expensive – significant upfront investment, largely on low value activities like data gathering and validation, costing ~£1.2M/year when attempted end-to-end with in-house talent, and more with outside experts. 90% of this cost is repeated when strategy is refreshed.

Moreover, the business usually fails to reach its target end-state (per KPMG, McKinsey, Bain, PwC, others). The impact is 5% off the P&L, never realized (per Accenture studies).

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