The roadmap for any great CIO and his or her IT group has been the IT Strategic Plan. Recent events would suggest a number of CIOs need to re-visit that tool and make a number of updates. What does the IT Strategic Plan look like now in a pandemic-changed world?
What the IT Strategic Plan used to look like
At its core, an IT Strategic Plan usually contained the following:
- Business and Competitive Assessment
- Present Status Assessment
- IT Opportunities
- IT Strategy
- Data plan
- Application plan
- Technology plan
- Project plans
CIOs would complete this process every few years. Its infrequency had more to do with the slower rate of innovation in computing technologies and applications back then. Early in my career, you were lucky to see a software vendor produce a new release of its application software every 18-24 months. And, those releases were generally unspectacular in the new functionality present within them. Hardware and systems software changes were often slow and unremarkable, too.
The real action, in the day, was in the development of custom applications. That was how firms could create competitive advantage.
In subsequent years, we’ve seen:
- The number of ‘systems’ that CIOs must support has grown markedly (e.g., telephony, mobile phones, physical security, personal computing devices, etc.) even though IT budgets and headcounts haven’t changed much. Finance and Payroll apps have been around 40+ years, CRM and early web applications (e.g., HRMS) for 20 years, business capable smartphone apps in the last decade, etc. Add to this, a number of new procurement, e-commerce, web marketplace, clearinghouse, auction, supply chain, pricing, analytic, data visualization, travel, and more applications now exist to tax the CIO and IT staff.
- A shift in power. Where corporate IT was powerful and customer technology almost non-existent years ago, now consumers have powerful smartphones and home computing devices that are connected to massive data stores. Consumers are in the driver’s seat today vis-à-vis computing.
- Increased reliance on package software for common back office, front office and operational systems. It’s just not cost-effective or a good use of programmer time (and capital) to build a custom general ledger.
- More and more competitive advantage coming from non-transactional systems like big data analytics, predictive tools (via ML), preventative maintenance (via sensor tech), etc. The future success of the company is not going to be found in incremental productivity improvements of tactical applications. Instead, real value will come from all-new applications that better serve constituents other than internal users.
- New business models require new technologies – Whether it’s an omni-channel play, a product-as-a-service or uptime-as-a-service (to name but a couple), new solutions are needed when the essence of one’s business changes.
- Business is more global than ever – Competition is everywhere now and can come from previously unknown players.
- Scale matters more than ever – It’s not enough for businesses to be global, they have to able to rapidly scale up and down. Just look at the hyperscalers and how much nimbler they are versus on-premises data center technology.
The Impact: IT planning frequencies must increase as the pace of obsolescence is quickening, IT scope is increasing, more IT specialization is needed, generic stuff must get outsourced to specialists (e.g., multi-tenant applications), and, scale flexibility is more important than ever.
COVID-19 stresses on IT Strategic Planning
If the IT Strategic Planning process was starting to develop cracks in it, COVID turned those cracks into very big fissures. How many IT Strategic Plans accounted for the following?:
- The need to support a company that is shuttered for months on end, furloughs much of its workforce, sees material reduction in revenues/cash flow, etc.?
- Large numbers of workers now having to work remotely?
- Large numbers of workers needed to be spaced apart from each other?
- The inability of IT staff to come into the data center to maintain hardware, applications and other critical systems?
- The need to create and rollout all-new applications (e.g., banks creating a Payroll Protection Program loan application for small businesses as a result of the CARES legislation) during the middle of a crisis?
Moreover, few IT systems were actively monitoring their external environment as well as they could have. Pre-COVID, did your IT systems:
- Track the spread of potential epidemics and adjust operations to stay in front of things? Have you read what grocer HEB Food Stores was doing?
- Monitor minute changes in supplier activity? Could your supply chain monitoring tools detected plant closures or lower production of offshore suppliers? Could it do so in spite of the “everything’s normal” pronouncements of local government officials?
- Predict changes in customer buying habits and front-load manufacturing raw materials accordingly? Check out this Wall Street Journal piece on what several firms did with some big-data and AI-powered supply chain tools.
- Have access to near-real-time big data (e.g., NO2 monitoring, satellite imagery, and the analytic tools to spot anomalies?
IT Strategic Planning now
The old ways of IT Strategic Planning (ITSP) were limited and require overhauling. Doing a plan every few years just isn’t viable anymore.
The ITSP activities of yesteryear missed a lot of planning activities we need today. Specifically, the ITSP should have major chunks of work dedicated to:
- Rapid scale up/down capabilities, costs and risks
- Extremely Rapid Application Development during times of great change or when new competitive threats emerge
- Managing IT well even if the company must conserve its cash for an extended period
- Remote IT management when IT staff cannot get physical access to their own data center
- Reducing tactical IT workload wherever possible (e.g., use of multi-tenant software to reduce technical debt and to reduce IT workload)
- Real-time software asset management assessments (i.e., to ensure office automation, collaboration and other tools are in compliance with subscription licenses)
- Rapid re-prioritization of in-process IT projects, upgrades, etc.
- How data privacy will be ensured in a work from home (WFH) work environment
- How IT continues to deliver it services should it lose half of its staff
- Enhanced disaster recovery plans
New ITSP implications
Now, CIOs must consider the addition of new capabilities, the outsourcing of others and the development of new skills. Specifically, we believe CIOs must have:
- Global Monitoring and Projections of Potential Risks – If CIOs lack the systems, the big data sources, the connections to key global suppliers/customers/etc., then they need to get them asap. The time to acquire these isn’t during the middle of a crisis.
- Contingency planning options defined for the broadest set of potential issues – Many ITSP efforts consider a narrow group of issues that could affect IT systems like an earthquake or fire damaging a data center. The list of potential scenarios to consider today is much, much broader though and many of these require context in non-IT disciplines (e.g., disease, economics, etc.). To do this kind of contingency planning, IT leaders may need to reach out to experts outside IT and their firm.
- Actionable and current continuity plans in a variety of economic, pandemic, weather, natural disaster, etc. scenarios – In a call today with KNOA CEO Brian Berns, we discussed how the COVID experience has produced some big a-ha moments and shown some big holes in IT plans. Specifically, we discussed how some core systems usage plummeted during the first two weeks of WFH/lock down. Apparently, a lot of firms had no plan for getting people quickly up and running on home computing devices and networks. Next, service tickets appear to be exploding now as people want to better optimize their WFH experience. Without plans, appropriate technology, etc., companies and CIOs will continue to be in the dark when a crisis pops up.
- Plans to get off the on-premises world – Having your own data center is a luxury when you thought you would always be able to have IT people on-site. However, close quarter working conditions may not be possible in a pandemic world. If most applications don’t need to be in your data center, go with a hyperscaler now.
- Plans to move off of custom code for all but the most strategic applications – When you are in a crunch, you’ll need your IT team focused on your most important issues, applications and development efforts – these are the ones that really matter. You don’t want them writing and maintaining applications that add little or no strategic value/competitive advantage. Use packages where it makes sense and keep them vanilla.
- Transition the support, maintenance and patching of single-tenant, private cloud and on-premises applications (especially for tactical applications like Finance) to others or move to multi-tenant apps (where the vendor maintains the applications as part of the subscription fee)
- Get out of the data center business – If you’re one of those CIOs who measures their career success in terms of sq. ft. of data center managed, you can stop reading now. It’s okay to have a small data center for some applications, but the bulk of your processing probably belongs on a highly scalable hyperscaler solution. Management of virtual computing resources is possible from anywhere. Your data center may not be.
- Get up and down scalability built into every software and computing power agreement – Recent weeks events have shown that IT contracts AND pricing need to work when times are good (and business is growing) as well as when events dictate a reduction in usage and costs.
- Acquire additional team members with expertise in big data, analytics, ML and algorithm technology especially as it pertains to value chain, supply chain, workforce management, preventative management, new business model development, digital commerce, and other transformative competencies. We’re past the day of having most IT people dedicated to the maintenance of applications and the computing environment. Those functions don’t drive the company forward.
The business of technology, like any business, is always changing. And, by connection, so too must the plans involving technology.
A couple of recent studies would suggest that we’re in for some interesting times. ChiefExecutive.net recently reported:
A troubling new survey by Chief Executive reveals how quickly and deeply the impact of COVID-19 has spread through American businesses, with 68 percent of the CEOs we polled experiencing declines in revenues due to COVID-19 so far this year, and a stunning 84 percent expecting declines in April.
Meanwhile SMB Group’s recent study, Impact of COVID-19 on Small and Medium Businesses, stated:
At least two-thirds of respondents in all industries—except life sciences—say their businesses are negatively impacted by COVID-19.
However, the depth of this impact varies by industry. Personal services, hospitality and manufacturing are taking the biggest hits, with 100%, 95% and 90% of respondents in these industries, respectively, saying they are negatively impacted.
At a minimum, CIOs should be currently planning for a couple of scenarios based on:
- Their firm being materially shuttered for short, intermediate and long-term timeframes
- A very constrained capital budget for the immediate time-frame
- IT vendors being unwilling to reduce payments or renegotiate financial arrangements with their firm
If you are involved in short-term and longer-term IT Strategic Planning, let us know how this resonates with what you are dealing with. Your views directly impact where we take this coverage next.
Stay safe, everyone!