Challenge

In organisations across the world, top management (i.e. the Management Board, the executive leadership teams, divisional/regional leadership teams, Chief Information Officer, etc.) is accountable to set organisational direction and strategy (the intention). However, they face a consistent and repetitive set of challenges in articulating, managing, and benchmarking organisational strategy and continually ensuring that individual functional strategies such as IT Strategy stay linked and aligned to business outcomes. These challenges are outlined below.

An organisation’s ability to recognise and respond quickly to rapid changes in its trading environment – be it technological disruption, economic uncertainty, evolving consumer behaviour or geopolitical instability, is an integral part of its enterprise strategy management process.

“Businesses that lead in the digital world can pivot within days, hours or even minutes as new threats and opportunities emerge. In contrast, laggards often fall victim to a technology function that need months, quarters or even years to adapt.” Bain

Today, few manual mechanisms exist that enable organisations to efficiently identify, collate, assimilate and track vital information in real-time directly into their Strategy formulation process, partly because such information is dynamic, time-bound, in varied formats and dispersed across the organisation’s intellectual resources and external advisors. Manually collating and processing this information to build a basis/hypothesis for strategy is extraordinarily labour-intensive, expensive, and prone to errors. These traditional challenges are being further exacerbated by:

1. Accelerating pace of disruption (in technology, consumer behaviour, geopolitical climate etc.) resulting in lost economic opportunities, gross inefficiency and in worst cases outright organisational failure. This makes it difficult for organisations to assimilate what is happening around them in real-time and take corrective actions before economic, reputational, and legislative implications strike. The list of companies that have gone or nearly gone into administration because of the lack of such capabilities is very long and keeps growing every day.

“The pace of technology change has accelerated so quickly that in many cases, one-year planning cycles are no longer applicable.”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

2. Lack of a standardised strategy framework and toolset that simplify the capture of information, correlate it easily with internal activity and present the implications in a meaningful way as a relevant, coherent IT Strategy to top management for decision making. Capturing and managing a complete, robust strategy that is continuously relevant and coherent using today’s traditional processes is too difficult and takes too long. Often, due to lack of proper awareness about what exactly constitutes an IT Strategy, an infrastructure upgrade schedule or a loose collection of “fix it” tasks are presented as IT Strategy, causing wide-ranging Board disillusionment.

3. An acute lack of reliable planning data on the portfolio and status of projects, applications, suppliers, talent, and costs and the interdependencies between these entities required for robust strategy formulation. These inter dependencies are ever-changing and constantly evolving with business-as-usual, making it very difficult to generate an accurate point-in-time picture that enables Board decision making process.

Two-thirds of private companies either have no IT Strategy or one that cannot sustainably support their business strategy. PwC

Top Challenges in IT Strategy Creation

  • Current methods of creating and linking IT Strategy are manual, laborious & expensive, distributed across an organisation that is otherwise very busy with business-as-usual.
  • End-to-end IT Strategy is often disjointed and ambiguous as IT departments work in silos, in random order and to differing endgames, often without engaging the business.
  • IT Strategies built in PowerPoint are rigid & point-in-time that quickly become obsolete when underlying data changes.
  • Inefficiencies in the strategy creation process mean nearly 75p of every pound spent is regret cost.

To create an effective, holistic IT Strategy in-house, organisations would need a team with a broad range of business and IT skills, an understanding of various technologies and their potential application to solve business problems, IT disciplines and frameworks along with knowledge of the external business environment – markets, competition, regulatory forces etc. Also, IT Strategy needs to be derived in an analytical and systematic manner; it takes time, effort, and a balance between focussing on short term burning issues and delivering long term value.

The challenge facing CIOs is such talent and teams are often busy doing another vital task, i.e., running the day-to-day business! Consequently, today Business and IT Leaders buy in droves from expensive Advisory firms that deliver point-in-time statements of organisational health and readiness.

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