In the previous blog in this series, we showed how to align the IT Vision with Business Strategy and objectives. The next step in developing IT Strategy is to understand how current capabilities stack up against the IT Vision, i.e. perform a capabilities gap analysis.
Performing the capabilities gap analysis involves a few key steps:
These few steps will ensure that the full extent of the gaps in IT capabilities is known. This is one of the most important steps and it is critical to perform this activity with complete impartiality and without bias so as to unearth the true nature of the gaps.
In summary, IT strategy needs to be aligned with business drivers and objectives to be effective. While understanding the business context is the first step in the development of IT Strategy, the next step is to do a gap analysis between the capabilities that are required to fulfill the IT Vision and the current state of IT capabilities. The next step to frame the IT Strategy will be explored in the next blog in this series.
How do you go about assessing your IT capabilities?
In the last blog in this series, we established that IT Strategy is the set of objectives, principles and plans that IT must use to support the company’s business strategy. Therefore alignment with business strategy is key to ensure that IT Strategy is moving in the right direction. The question is how do we achieve alignment?
Aligning with business strategy involves a few key steps:
These few steps will ensure that IT capabilities will align with the needs of the business. It must be noted that business strategy may change periodically as the company monitors the competitive landscape. Therefore the IT organization must keep their eye on business strategy to ensure that they are responsive to any changes.
It should also be noted that technology might from time-to-time provide some competitive advantages. As an example, the automated reservation system Sabre, gave American Airlines a competitive advantage when it was first introduced. Since then, all airlines have developed or adopted automated reservation systems and now there is no significant competitive advantage from this technology. The point is that if the IT organization can build technology that provides a competitive advantage for the business, it should be included in the company’s business strategy.
In summary, IT strategy reflects the IT organization’s capabilities in support of the business strategy. Therefore alignment with the business strategy is paramount for the development of the IT strategy. Once IT and the business objectives are aligned, the next step is to look at the gaps in IT capabilities to deliver the business vision. We will discuss this in more detail in our next blog in the series.
How do you go about aligning your company’s IT and business strategies?
Before we understand IT Strategy we need to understand strategy itself. Strategy is a word that is used often incorrectly or at least ambiguously. This may be because of varying definitions that are provided by various sources. Let’s demystify it.
According to the Oxford Dictionary, strategy is: A plan of action designed to achieve a long-term or overall aim. In plain English, strategy is nothing more than a plan to achieve a long-term goal. Military leaders know that a strategy is a means to outflank and outwit an opponent by outthinking, out-planning and out-executing them. This definition of strategy has more relevance to a business.
Professor Michael E. Porter of the Harvard Business School provides great insights about what a strategy is for a business. According to Porter, Strategy is about doing something unique that is of value, uniquely. Porter’s view is that by doing this, businesses can differentiate themselves and maintain a competitive advantage.
So, what is IT Strategy and can IT have its own strategy? In a word, no. By Porter’s definition an IT organization cannot have its own strategy, as it is not trying to differentiate itself from other technology groups. Rather, it is supporting and enabling the strategy of the business as a whole.
So what then is IT strategy? According to Gartner’s IT Glossary, IT Strategy is the discipline that defines how IT will be used to help businesses within their chosen business context. In this perspective, the IT Strategy must ensure that IT has the capabilities to support the business strategy in terms of people, processes and technology.
Defining the elements of IT Strategy is a difficult exercise. Here is an overview of how we recommend developing an IT Strategy:
We will continue to flesh these out more fully in future blogs. Stay tuned! Please tell us how you might go about developing IT Strategy.
According to EMC Storage with research and analysis by the International Data Corporation (IDC), the rate of data growth in the world is 40% a year resulting in a doubling of the total data stored every two years. They estimate that the total volume of data stored will reach 44 Zettabytes by 2020 – that is 44 followed by 21 zeroes. Compare this with 0.8 Zettabytes in 2009. That’s staggering growth! This graph illustrates this visually. Interestingly, the US stores a third of the world’s data according to the global economic news outlet Quartz.
You can probably guess the variety of factors contributing to this enormous growth. According to the United Nations, global population growth is about 1% per year. While population growth will contribute some to the growth of data, it is a small factor. In 2010, only 1.7 Billion of the 6.7 Billion humans on this planet used the Internet, roughly a quarter of the population. This is expected to grow to 5 Billion users (roughly two-thirds of the population) by 2020 according to Network World. This penetration of the Internet globally will undoubtedly spur growth in global data. In addition, the number of ways to be “connected” is increasing with the increase in wireless services and the advent of the “internet of things”.
Meanwhile what is to be done with all this data? According to Gartner, data growth continues to be IT’s biggest challenge. According to IDC, the amount of data generated outstripped storage for the first time in 2007. This gap has continued to increase. The amount of storage capacity available is increasing roughly linearly while data growth is increasing exponentially. IDC estimates that, at the current rates of growth, there will be a 60% gap between available storage and storage demand. Improvements in storage technology and innovation in storage media has reduced the price of storage exponentially. According to SAS Business Analytics, the price per GB of disc dropped from $17/GB to $0.07/GB in 2012. So is this the answer? Continue to feed the beast, crank up production and meet the exploding demand? Imagine the collateral impacts to data center construction capacity, power and air conditioning needs, etc.
While growth of data is a good thing from the perspective of global IT job growth, following the data growth curve blindly is not a good idea. Here’s why. According to IDC, only 22% of the data that is stored was considered “useful”. D.J. Patil, Chief Data Scientist of the White House says, “Data is super messy, and data cleanup will always be literally 80 percent of the work”. Think about the amount of storage that is wasted in storing dead or dormant data that has no business use. Useful data is expected to grow to 37% of stored data by 2020. That’s only a growth of 10% per year as compared with the 40% per year of overall data growth. So maybe we should be finding ways to continuously remove dead data and identify useful data. What do you suggest, so we avoid making our data warehouses into data landfills.
The rate of data growth in the world is 40% a year resulting in a doubling of the total data stored every two years. IDC states only 22% of the data is actually useful. Join the discussion on how to prevent data warehouses from becoming data landfills.
When embarking on a business or technology transformation your organization will be facing changes, the proactive management of the change significantly adds to your chances of success.
Managing change implies understanding the potential impact of a change before it occurs. Managing change is critical to helping all those involved understand and accept the change. Ideally, individuals and the organization work through the change by actively participating in the planning, operation and reinforcement of the change. And, managing change helps ensure smooth and constructive adoption of the change, with as little disruption to the individuals and the organization. So where do you start and how do you do it?
Our Organizational Change Management (OCM) Framework operates in three phases:
1. Planning for Change,
2. Making the Change, and,
3. Reinforcing the Change.
Our OCM Framework helps you identify and address all necessary success factors and manage them with our simple, customizable tools. At each phase make sure you don’t forget or miss any critical element that could delay or hamper your progress so that you keep ahead of, and on top of, the common pitfalls.
Does your company use a change management framework to plan, make and reinforce change?
ProcureVision, LLC is a management consulting company that enables our client's business success through the optimization of their people, process and technology. We provide creative, customized and completely implementable solutions.