Approach
to ICT PlanningApproach
to ICT Planning
How often do we hear discussion of IT plans not being aligned to the business? It seems to be one of today’s hot topics – though it’s been around for years. When I was with DMR, more than ten years ago, we spoke of services to help clients with “Business-IT Alignment”.
Doesn’t it strike you as unusual that IT would not be aligned with the business? How could situations arise where the IT department is doing things other than what the business needs, or working to priorities different to the business priorities?
Such situations are of course likely to reflect a lack of two-way engagement in the development and ongoing management of business and IT plans. In recent years, we have seen several situations where this is exactly what happens. We saw an organisation that was frustrated because IT never delivered what was required – for which the principal reason was exclusion of IT from the planning process and lack of any vehicle for communicating business requirements to IT. More recently, we heard of an organisation in which service units and operational units were all treated as being independent – to the extent that they prepared plans and budgets independently and then bartered over how much funding each would receive. Not surprisingly, the IT group was struggling to achieve high levels of customer satisfaction, and was frustrated that it could not achieve on its own plans.
Planning the use of IT independently of business is rather like planning the meals agenda for a family holiday independently of the travel and entertainment schedule. A mid-trip five-course gourmet dinner in a top class restaurant might be a great idea in its own right, but not if its timing coincides with a day-long trail ride which leaves the travellers weary and saddle-sore. Planning a five-year overhaul of a key operational system makes little sense if the organisation is struggling in that particular line of business and contemplating a tactical withdrawal.
It’s not hard to work out that human resources are essential to the operation of most organisations, and that proper, effective management of the human resources is essential if they are to maintain optimum performance. But in most effective organisations, HR planning is not the exclusive province of either HR departments or operational units. It’s something that needs to be done collaboratively. The HR department does not, in its own right, generate revenue for the organisation. But its performance in development of effective HR practices can be a significant contributor to the success of the operational units.
The same principles should be applied to IT. In the contemporary organisation, IT underpins business systems that enable operational units to generate income. But the IT department does not, in its own right, generate income. It makes sense then for IT planning to be a collaborative effort between business leaders and IT leaders, with the clear focus of the planning being achievement of short, medium and long-term business goals.
A slightly better, but still inadequate approach to IT planning is for business unit plans to be developed first, followed by IT plans that aim to meet the needs of the business plans. While this approach may provide for better alignment of IT plans to business plans, it suffers significant limitations. It assumes an almost infinite elasticity in IT supply, through which business plans are established with significant dependence on IT, but no recognition of whether there is capacity to deliver on the IT requirement. It also fails to take into account any constraints in existing IT – systems and people – that might limit the ability of the organisation to achieve new business targets.
The first two principles for good governance of IT as set out in AS8015 focus on responsibility and planning. The requirement that organisations should establish clearly understood responsibility for IT demands recognition that the critical factor is not the delivery of IT, but the USE of IT. This is a business issue, and demands that business leaders take responsibility for determining the extent to which IT is used in achieving the organisation’s goals.
The requirement that plans be made so that IT best support the organisation cannot necessarily be satisfied when organisation plans are made in isolation, without proper understanding of the capabilities and limitations of IT. Some aspects of organisation planning need to be informed of IT matters, ranging from the viability of existing systems and infrastructure, through to the near, medium and long-term emerging capabilities of technology and the organisation’s IT specialists.
As organisations work to improve their system of governance for IT and to better align their governance to the recommendations in AS8015, Infonomics recommends that top level policy direction be given to ensure that business leaders take on significant responsibility for the use of IT. In concert with this allocation of responsibility, the organisation’s planning approach should embed IT planning as an integral part of the business planning process.
Within such a model, the planning process should give specific attention to each of three questions:
For the continued effective and efficient operation of the current business, is the existing IT satisfactory?
For the changes we need to make to the business, what are the corresponding changes that we need to make to our IT capability?
Considering market developments in the capability and use of IT, are there any changes that we should be making to the business?
Using this approach should result in the situation that IT activity (including infrastructure activity) is unequivocally driven by the business intent and need, and that excessive demand can be tempered from the outset. If business intent is beyond the capability of the organisation to achieve due to resource constraints or technology issues, the limitation should be recognised from the outset. There should be much greater business ownership of initiatives and there should be less tension with respect to unfulfilled demand.
Of course, this approach does not remove IT specialists from the planning process. Specialists should have a specific responsibility to inform the planning process in respect of each of the three questions. Preparatory effort may be required. Organisations that don’t have a continuous awareness of the status of their current ICT will need to prepare an assessment and may also need to develop a map of how their ICT systems (and infrastructure) support their business activities. If business managers are not aware of the ICT systems on which they depend (at a suitable level), they may need an appropriate briefing.
Adopting this approach to planning helps to position organisations for strong alignment to the principles set out in AS8015. This is because it underpins the first principle – “Establish clearly understood responsibilities for IT” – with the business leaders effectively becoming responsible for setting the IT agenda (in close liaison with the IT specialists). It also underpins principle 2 – “Plan ICT to best support the organisation” – because planning done in this way is most likely to be strongly aligned to the real future needs of the organisation.
Upgrading the entire system of governance to align with AS8015 involves more than merely establishing a joint approach to annual planning. There are numerous other facets to the governance system and effort needs to be prioritised to ensure that the most important issues are resolved first. It is for these reasons that we generally recommend starting with an assessment of the organisation’s existing approach to ICT Governance and developing a top-management understanding of why effective ICT Governance is important.