Enterprises can get stuck in their ruts. Executives, like all humans, tend to be creatures of habit, sticking with practices in their comfort zone. The annual strategic planning process is one of those sacred rites that may seem beyond question. But, it’s time.
Digital technologies demand a new approach to planning, including a fresh look at who will participate in strategy sessions and who will be tapped to lead the transformation process. The CIO, who may have been in a supporting role in the past, should now be recognized as the expert with the map to the future.
Demand a new approach to planning
Digital technologies have transformed many aspects of business processes, from the way personnel communicate and collaborate, to new revenue streams, which focus on data or products-as-a-service. Several industries have undergone complete upheaval, such as media, entertainment, travel, financial services, healthcare, and transportation. The industries that haven’t yet been reimagined are overdue, and no amount of resistance will be able to hold back the tidal waves of technology and innovation.
It’s a new world, demanding a new approach to the strategic planning process. Now, at year end, is the optimal time to examine the traditional process, toss out the antiquated, and create a new environment for fostering creative initiatives and making the most of cutting-edge capabilities.
Think of it as harnessing a fierce storm and turning its energy into power. The CIO, with the help of consultants or partners, if needed, likely will be the individual in the organization with the greatest awareness of new technologies and how they may be leveraged by the enterprise. Most importantly, the CIO will know the limitations of the current IT systems and where outdated software is impeding growth.
Focus on goals not past routine
The traditional planning process has numerous outdated concepts. One of the most troublesome is the operation-driven focus that seems to lock the enterprise into its routine trajectory. Instead of starting with a blank slate, the planning team typically starts with the previous year’s budget and then plots incremental changes, upping or lowering the allocation for each line item by a few percentage points. After the basics are covered, the remaining funds might be divvied up over a few new initiatives.
But, meager left-over funds are seldom sufficient for a full enterprise makeover or pursuing new digital opportunities. A better approach, more aligned with today’s high velocity change, would be to focus on goals first, including new revenue streams that can be leveraged using data or service-oriented concepts. New customer-centric programs or e-business platforms are other game-changing directions to explore. Then, allocate funds based on new priorities, not old routines. The CIO will be able to project the spending range that will be needed for IT solutions to support large-scale concepts.
Seek broader input
Another outdated concept often associated with traditional budget planning is the closed-door, elitist approach, where only a select few officers set strategy from within a vacuum. In this era, when product innovation, relationships with customers, global supply chains, and value-added service offerings are essential to growth, it makes sense to elicit ideas from the organization’s specialists in those areas — even if they are at a director or manager level. The front-line personnel who interact with customers daily may be the ones who are best suited to advise on customer expectations and how to create products or services, which will lead to customer loyalty.
The CIO will be the best suited to stand up new data-driven programs, including what software solutions will support the processes. Even if an acquisition, merger, or creation of a new business unit is part of the strategy for growth, integration to the core enterprise system for ROI analysis will be needed.
Discern hype from reality
Enterprises, hungry for growth opportunities, can be easily enticed by sensational promises of IT solutions with fast fixes or miraculous automation capabilities. It’s easy to fall into the quagmire of short-term patches, isolated point solutions and highly hyped innovations. In the long term, such application bandages can hurt system-wide visibility and create data confusion. Leaping onto a hype-driven bandwagon — without the proper due diligence — can yield disappointing results, plus sidetrack other core investments and upgrades, which may be a higher priority.
Again, this an area in which the CIO will be well positioned to provide guidance and make difficult decisions about likely success and ROI. When in doubt, the CIO will be able to turn to consultants, partners and implementation experts. They will 'speak the same language' and be able to collaborate, despite jargon-rich technical concepts.
Get started now
The final advice is to heed urgency. Get started now and allow time for discussing new concepts and researching ideas and options. Staying open to new ideas is essential. But, even more important is the need to back ideas with funds and personnel. Exploring routes takes more time than simply following last year’s path.
So, in summary — jump into the planning process now, bring the right people, and prioritize digital concepts. Chart a new course, and make sure the CIO is front and center.