Strategic IT Planning Stumbling Blocks

By Allen Bernard

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Two recent surveys indicate most CIOs don't have long-range, strategic IT plans. Yet those same surveys conclude that CIOs who do are better able to advance their companies' bottom lines and show ROI on IT investments. (See: Deloitte survey, CSC survey.)

"Having the business-aligned IT plan more than doubles your chances of getting a high return on your IT invest," said Eugene Lukac, a partner in Computer Sciences Corp.'s (CSC) consulting group, speaking of CSC's January survey. "I don't know that this has been shown before. Prior to this, I think people always thought 'Yeah, having a plan would be a good idea,' but now we know that it's not only good idea, it (equals) dollars."

So if the benefits are supposedly so apparent, why don't more CIOs have a plan? While there is no single answer to this question, there are common themes.

One is the service/order-taker mentality still prevalent in many IT organizations, said Dennis Gaughan, research director for AMR Research's IT Governance practice, and a trend also noted by CSC's Lukac. IT for so long has been considered just another business services department, its newly acquired abilities to drive and create revenues either have not been recognized or not capitalized upon by those running the company and, in many cases, those running IT.

But, this is changing, said Gaughan, as more companies continue down the path of IT consolidation and centralization. These efforts cannot be accomplished successfully without some idea of how the business will be affected by such a dramatic shift in the way IT is run and its services utilized.

The current popularity of portfolio management techniques and software is another indicator things are changing, Gaughan said.Another theme is change or, more specifically, the rate of technological change, said Craig Lawton, who leads Boston Consulting Group's America's IT Practice.

"Most companies have some level of IT plan," agreed AMR's Gaughan, who believes the 60% number cited in CSC's study is a bit high, "but to plan out so far in IT has been difficult because things change so rapidly."

Or so the story goes.

Some IT managers believe technology changes so rapidly, to plan is a waste of time.

Lawton's standard answer is any plan off of which you can bounce ideas is better than stumbling around in the dark.

Lastly, and not something IT can do much about, is the lack of long-range planning on the part of the business. Many businesses do not have a three- or five-year plan, so, by default, it is nearly impossible for IT to think long-term, said Lawton.

What CIOs in these situations do is cobble together a shorter-term plan, say, for one year, using their knowledge of technology coupled with past performance metrics and assumptions about the future.

"That's why a lot of companies have gotten to the place they're in today," said Lawton, "which is a little of everything and not a very well thought-out approach to 'How do I optimize the data architecture, the application architecture, the infrastructure in a way that's leading to something?'"

Regardless of what's tying your hands, this remains the $64,000 question and one that, increasingly, needs to be answered.

"I don't think you can ... be in that top quartile of companies and not have a pretty well thought-out strategic plan for IT that at least gives you the next two to three years," he said.

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