When to Have an IT Strategic Plan

• Size of the technical investment – is technical spending becoming a larger percentage of your operating expenses?
• Competing priorities- are you able to spend enough time to know that your technical investments are providing the value you want? Are you just not able to give enough time to look at how your investments are performing?
• Competitive landscape – are you seeing your competitors offering better products and services through their use of technology? Are you keeping pace with industry practices?
• Size of the organization – with your growth, are things still running as smoothly as it did eighteen months ago?

Qualitative indicators of the need for IT strategy

• Public versus private information – where does the data come from? Is it mostly information that anyone in the marketplace can find (e.g. cost of fuel, tax rates, average labor costs) or is it information that is generated by the business (e.g. forecasts on commodity pricing). Another way to look at this is if the information is used operationally (cost of doing business) versus strategically (value provided to customers). Higher uses of private (strategic) information warrant attention to ensure the delivery and value retention of that information.
• Information density in your product or service – what percentage of your delivery of a product or service is based on information? Of the information used or provided, is it critical to your delivery? For example, weather forecasting is important for both a landscaping company and for a food grower (farm). With landscaping, though, it is not core to the service: it is used for scheduling and operational planning (is mowing possible tomorrow?). With a food grower, crop yield drives most of the decisions for the farm, and without good forecasting, the entire operation is at risk.
• Leading versus lagging indicators – is the information used to measure performance or is it used to set direction for the company? An investment firm uses the information to drive their decisions as an example of information as a leading indicator.

What is in an IT strategic plan?

• High-level mismatch between IT provider and corporate strategy – if the corporate direction is to be the low-cost provider in the market, an IT strategy that looks to leverage investments in expensive, leading-edge technology is not going to succeed. Same if there is a low-cost approach for IT while trying to provide a high-value service: technical limitations dilute the value delivered to the customer. At the highest level, the IT strategy in its vision has to align with the corporate strategy for its approach to the market.
• A mismatch between timelines – challenges arise when business timelines don’t match up to technology timelines. If the ERP upgrade is two years out, but there’s an expectation for supporting new acquisitions in twelve months, this will be a major disruption to operations and to technical initiatives. The IT plan should identify key points of IT support for the business initiatives in the coming years.
• Underestimating risk – there is an inherent level of risk with technology that requires a level of investment to protect the business. When only looking at the cost of the protection against the likelihood of an event, it is easy to dismiss those risks while planning and thereby under-funding the protections required. Like insurers, that evaluation should also include the costs incurred should an event happen (e.g. low probability the business is hacked, but if it is, it would go out of business if not up and running within 48 hours).
• One and done – an IT strategic plan is something that should be communicated and reviewed frequently. Critical components to review are the vision and priorities, as this is the foundation for the plan. If these change, the plan should change. At a minimum, an IT strategic plan should be reviewed and updated annually.

Should I have an IT strategic plan?