Introduction
We are living in an information technology age and every organization is looking for ways to leverage the proliferation of IT systems to gain an edge over its peers. As information technology continues to grow rapidly, organizations are faced with challenges of initiating, implementing and monitoring all IT systems to ensure that they leverage the power of IT platforms. According to Balanced Score Card Institute (2008), strategic planning for IT departments is a deliberate effort aimed at developing viable approaches to address IT-related issues that may have far-reaching implications on the growth of the organization (Lientz, 2010).
As organizations grow and IT environments become more complex, organizations are forced to develop proper strategies (Kukreja, 2013). Studies by Lientz (2010) found that companies that constantly deploy well-crafted IT approaches realize continuous growth.
This report endeavors to explore the IT strategy and strategic planning process and has four focus areas. The first section will give a detailed overview of what the IT strategy and strategic planning process are. The second section will provide a discussion on the process of IT strategic planning process. Subsequent sections examine the execution, evaluation, and recommendations. The final section provides a conclusion (Meier, O‟Toole, Boyne & Walker, 2007).
Defining IT Strategy and Strategic Planning Process
IT Strategy can be viewed as a structured, purposeful action aimed at delivering outcomes on what the organization should do, who the target is, and the reason for doing it. An effective strategic plan serves to project an organization’s future while defining specific actions that must be taken into account to produce the desired results (Kukreja, 2013).
A strategy addresses the questions of “what” and “why.” Therefore, a strategy refers to a unique approach that an organization chooses to achieve its short-term and long-term goals (King, 2009). Balanced Score Card Institute (2008) noted that IT strategic planning processes involve various steps that must be pursued in a consistent, disciplined, and careful manner to overcome potential risks (King, 2009).
The Process of IT Strategic Planning
Although there is no “apply-it-all” formula that dictates what a strategic planning process should or should not capture, most scholars agree that a strategic planning process should capture the following aspects:
Situational Analysis
When executed in a disciplined process, situational analysis has the power of rewarding a company’s efforts and employee commitment. Situational analysis is the step that allows an organization or its selected agents to understand the position where the organization is coming from and its current position relative to the market realities (Meier et al. 2007). With proper execution plans, an organization can confidently face the future and turn around its threats into opportunities (Grünig & Kühn, 2011).
Segmentation
This step provides an IT-based organization with an opportunity to analyze the market and match its IT services with the actual market situation (Ward & Peppard, 2007). This helps an organization to realign its IT strategic planning actions toward reducing risks and increasing financial returns. There is a need for IT firms operating in highly competitive environments to identify their strong and weak market segments based on the needs of the customers (Grünig & Kühn, 2011).
SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis
SWOT analysis has been found to be a valuable and reliable tool for determining an organization’s position in the market. When implemented properly, SWOT analysis can serve as an audit tool capable of evaluating an organization and its surrounding environment. For effective results, a SWOT analysis should use the input of all people in an organization with a view of unearthing the key issues around the organization’s capacity to deliver on its vision and mission (Ugboro, Obeng & Spann, 2011).
Develop a Business Unit Strategy
An organization is made up of distinct, yet inseparable units working together for the good of all stakeholders. When it creates a functional business strategy unit, it can address specific problems and ride upon its specific strengths to maximize results. The effectiveness of the implementation of this step depends on the nature of the organization, the complexity of the environment in which it operates, and the available resources (Grünig & Kühn, 2011).
Strategy Execution Process
For the last two decades, numerous researchers have been contributing to the growth of management science. One notable outcome of the development is the strategy map. To execute IT strategies effectively, experts in management science propose that organizations should use a strategy map. It helps to illustrate graphically how a firm can create additional value for people that matter to the business (Simerson, 2011). The map links an organization’s objectives with ongoing improvements using a cause-effect analysis (Ugboro et al., 2011). When executing a strategic plan, an organization should be able to appreciate its strengths, weaknesses, opportunities, and threats. For example, riding on a less complex IT system may be seen as a weakness and as a strength (Ward & Peppard, 2007). Taking into account the fact that a business with a less sophisticated IT infrastructure may not need to commit enormous financial and human resources means, a company may save a lot on system maintenance and employees’ salaries (Poister, Pitts & Edwards, 2010). By recognizing all these aspects, organizations can help identify profitable strategies that can spur an organization to greater growth levels (Ward & Peppard, 2007).
Evaluation and Recommendations
The effectiveness of the strategic planning process cannot be ascertained if an organization lacks meaningful measurement and evaluation mechanisms. Today, most companies have internal inefficiencies that go unnoticed and are exerting pressure on their operations. Key questions an organization may need to ask are as follows: In what areas has the organization failed to do better? What are the proposed improvements? Are there gross mistakes that should not be repeated? Do outsiders view our weaknesses the same way we do? There should be accurate and verifiable measurement and evaluation benchmarks in determining whether the strategic planning processes have been effective (Poister, et al. 2010).
Organizations should develop administrative and operational structures that will eliminate redundancy in their IT systems and foster the efficiency of enterprise systems.
Organizations must eliminate skill and resource constraints to achieve the most desired outcomes or deliverables (Andersen, 2000). IT service organizations must create formidable customer service orientation programs to help top decision-makers understand the demands of end-users.
Conclusion
The fast-paced technological world is likely to pose serious challenges for average IT firms or businesses that rely on information technology systems (Andersen, 2000). If left to top managers alone, the implementation of IT strategic plans may not take off or may fail to deliver the intended results. It is essential for organizations to develop comprehensive and people-driven solutions that can turn around inefficient IT departments into technologically efficient outfits that can deliver on the promises of the organization.
References
Andersen, T. J. (2000). Strategic Planning, Autonomous Actions and Corporate Performance. Long Range Planning, 33(2), 184–200.
Balanced Score Card Institute. (2008). Is There Any Strategy in Your Strategic Planning? New York, NY: John Wiley & Sons.
Grunig, R., & Kuhn, R. (2011). Process-based strategic planning. Heidelberg: Springer.
King, W. R. (2009). Planning for information systems. Armonk: Sharpe.
Kukreja, D. (2013). Strategic Planning- A Roadmap to Success. Academy of Management Executives, 15, 1-9.
Lientz, B. P. (2010). Breakthrough strategic IT and process planning. Hackensack: World Scientific.
Meier, K.J., O‟Toole, L.J., Jr, Boyne, G.A., & Walker, R.M. (2007). Strategic management and the performance of public organizations: Testing venerable ideas against recent theories. Journal of Public Administration Research and Theory, 17(3), 357–377.
Poister, T.H., Pitts, D., & Edwards, L.H. (2010). Strategic management research in the public sector: A review, synthesis, and future directions. American Review of Public Administration, 40 (5), 522-545.
Simerson, B. K. (2011). Strategic planning: A practical guide to strategy formulation and execution. Santa Barbara, CA: Praeger.
Ugboro, I.O., Obeng, K., & Spann, O. (2011). Strategic planning as an effective tool of strategic management in public sector organizations: Evidence from public transit organizations. Administration and Society, 43(11), 87-123.
Ward, J., & Peppard, J. (2007). Strategic Planning for Information Systems. New York, NY: John Wiley & Sons.