Plan NOW to make IT relevant again in a digital world
- Summary:
- For many firms, it’s time to conduct a strategic IT planning exercise. But there will be challenges in completing a good one.
A new strategic IT plan is needed because:
- technology must address more than what and when applications move to the cloud
- marketing departments are selling corporate data to third parties
- marketing organizations are becoming some of the largest buyers of information technology and users of big data (e.g., scanning social media for sentiment analysis)
- BYOD wasn't a fad after all
- digital technologies are transforming the very nature of businesses today
- application software vendors, almost to the one, no longer resist but now embrace social, mobile, cloud, analytics, large and unstructured datasets, the so-called Internet of things, etc.
- robotic process automation and machine learning have moved from the laboratory to mainstream
I’m not the only one seeing the problem. In Friday’s Wells Fargo IT/BPO Services Weekly, Ed Caso writes:
“ THOUGHT OF THE WEEK – Can’t Stop The Digital World. We have met with several leading IT service providers in the last 10 days and came away with one clear message - The Digital Wave is Upon Us. Having said that, what we are hearing is that enterprises are trying to fend off what could be potential business ending threats (think Uber) with no more than redirected cost savings. While this should provide some funds, we believe it is likely not enough to address the threat/opportunity that the social/mobile/analytics/cloud/internet-of-things (and more so new ways of doing business) wave that is rushing at them. We worry that companies’ desire to maximize margins (and therefore cash flow and return of cash to investors) the last few years could meaningfully impact major enterprises ability to compete and grow (or worse) in the coming years. We see a major (technology) investment cycle upon us, and CXOs that don’t see the risk/opportunities presented by the large, rapidly appearing changes could face disruption from which they cannot recover, in our view.”
There are other reasons that should trigger businesses and IT leaders to develop a new strategic plan. These include:
- The hardware and software vendors that got you to where you are today may not be the ones who will take you and your organization forward. Brand-name hardware is now being bypassed for lower-cost generic technology the benefits from the open sourcing efforts of firms like Facebook. Software vendors that fought the movement to cloud solutions for a decade or so may be too late in re-imagining their solutions for the modern era. The clock is certainly ticking.
- Virtually every business process is being impacted by external data, much of it serving mobile users. It is highly unlikely that your firm's business processes were designed for or utilize much of this externally generated content and insight. As a consequence, your business processes, like your ERP systems, may well belong to a generation of technology whose time has come and gone. The data your firm will use to run its critical systems in the future will likely contain more externally sourced information; much of it served through cloud-based information sources. Likewise, the focus of many new applications will be on constituents (e.g., job seekers, raw marketing prospects, shareholders, regulators, etc.) than your current solutions do not serve or serve well today.
- Integrators and outsourcers may have grown less relevant as much of their solutions and services were predicated on technology platforms that are increasingly less relevant. Great technology leaders see 'eras' of technology. While technology evolution is often continuous, there are nonetheless great divisions apparent to market observers. Just like there were distinct eras in the Earth's history e.g., Paleolithic, Mesozoic, Pleistocene, information technology has similar phases. There are major transitions occurring in business technology today. On-site applications have been virtualized and run in cloud computing centers, thus shrinking the need for fixed IT data centers. On-premises applications are ceding market share to cloud solutions. Multi-tenancy is forever changing the parameters and economics of application maintenance. The list goes on and on.
Bottom line: businesses and IT leaders need a great long-range IT strategic plan. But can these be easily created?
Challenges to Strategic Plan Development
Wanting and building a long-range strategic IT plan are two different things. To build a great plan, businesses will need access to a number of experts and data sources that are different or hard to access. For example, who will businesses turn to for unbiased input in re: to newer, more modern solutions? Outsourcers and systems integrators for the most part long since abandoned any pretense of offering independent advice and counsel. Instead, they sell solutions. Confusing selling messages with advice can be an expensive and error-prone mistake.
Businesses will want to consult with visionaries who can clearly detail the ramifications of new dimensions and technologies about to impact businesses. For example, does your firm know how soon it must react and develop competencies around machine learning, algorithmic programming and what the new generations of digital commerce will be? Do you know who those visionaries are? Some of the IT industry analysts who advised on your ERP purchases in the late 1990s might still be around but will their advice and counsel be relevant today? A great long-range IT plan contains scenarios that detail these potential shifts in the way competitors, technology providers and others will alter the foreseeable future. Do you even know what the potential scenarios are? And, do you have a plan or identifying and monitoring these?
Great IT plans include input from industry. Competitors will utilize new and different technologies to disrupt your markets. If your IT plans involve the scheduling of a number of known, old and backlogged projects, your plan will likely destroy shareholder value in the long term as it is ignoring the significant disruptive effects of competitors’ new technology deployments. Moreover, the digitization of one industry after another means that industry insights may frequently be found in adjacent or radically different industries today. Every firm should ask “How might we be hobbled should Amazon, Google, Apple, etc. move into our space?”
The new long-range IT plans, if they are to be truly valuable and strategic, must take a fresh approach to acquiring net-new sources of insight. New experts and ideas are needed. Failure to challenge your own firm and its inwardly focused view of the markets, technology, constituents and data will result in a plan of limited usefulness or relevance.
Recommendations
Before any plans are committed to paper, the planning team needs to become more aware about what is going on in high-tech, their industry and across other industries. To become more cosmopolitan, planners must step out of their normal, inside-the-four-walls-of-the-company roles and go visit cutting-edge firms. If your planning team creates a strategic, long-range IT plan without once visiting Silicon Valley or meeting with the leadership of several innovative example firms then it will likely create a low value and obsolete plan. At best it will deliver small, incremental value that quickly withers in the face of disruptive innovators.
When I have taken firms' leadership to Silicon Valley and innovative organizations, the trip triggers several material things:
- an awareness of new possibilities that were heretofore deemed decades away or just plain impossible
- a heightened sense of competitive opportunity should the firm become one of the earlier adopters of this new technology
- a newfound clarity in what the priorities for the organization and its technology efforts should be
- a clear narrative regarding the new direction of the company, its desired future state and how specific technology and technology initiatives will facilitate this
- how many current technology partners the firm has that may no longer be all that relevant anymore
The new long-range plan must also contain direction regarding who the firm's new technology “partners” will be and their relative strategic importance to the firm. Likewise, the plan must address what will happen to hardware, software and service providers whose importance will be diminished and whose presence may eventually be phased out. This exercise is critical as IT leaders have limited bandwidth to dedicate to their strategic IT vendors. Some of the established players must make way for newer, more market relevant and more strategic solution providers.
Who will assist in the development of the plan may be one of the most interesting challenges yet. Planning teams will need access to a very different group of market influencers, industry analysts, futurists, bloggers, etc. And, they will want to tap the expertise of people in many areas (e.g., machine learning) that may be unknown to the firm today. Experts may help in both the knowledge transfer and the change management issues the company will face as it moves its IT and organization into this new world.
The team will want input from multiple generations of people in many different parts of the world. Some demographic groups will have decidedly different needs and wants relative to mobile, digital and other technologies while other demographic groups may be unintentionally biased towards older, traditional and quite mature technologies. Incorporating these differing wants and needs into the plan will help bring a better longer-term value to the planning efforts.
Final Thoughts
I participated in a number of long-range IT planning projects over the years. I love those gigs.
When I compare the projects I did in the 1980s and 1990s to more recent efforts, I see sharp differences. Earlier projects were more inwardly focused. The systems backlogs were huge and well known. The focus then was on automating more business processes some for the first time and achieving new operating efficiencies. Later projects took the efficiency push further with shared service and outsourcing planning items. More recent efforts switched from an efficiency or productivity focus or cost transfer focus to more of a competitive advantage/differentiation flavor. More of the project team’s energy went to understanding how competitors might use new technologies (e.g., analytics) to gain more market share, increase margins, etc.
I relate this evolution in planning to you as I want you to re-imagine what a great long-range plan should do in the context of today’s not yesteryear’s business world. Don’t just use your old methods for developing an IT strategic plan. Instead, have the courage to change your approach to planning and, in the process, you’ll likely change the fortunes of your firm. It won't be easy but it will be rewarding.
Good luck.
Image credit: Change, Same Green Road Sign Over Clouds © Andy Dean - Fotolia.com