The document discusses IT strategic planning. It begins by noting views that IT is becoming a commodity and that CIOs often inherit messy IT organizations with no credibility. This backdrop questions whether companies should have an IT strategy and what it should address. The document then presents a framework that categorizes IT systems based on their strategic impact and position of IT in a company. It suggests a company's strategic planning process should reflect this position of IT. Representatives from four companies discuss their own strategic planning processes and documents. The document raises questions about whether changes could make IT more strategic or improve its perception.

1. IT Strategic Planning
What you do either drives or reflects who
and what you are to the business
JPerzel & Associates Roundtable
May 27, 2010
5/27/2010 Copyright: Crocus Hill Associates, All rights reserved

2. Discussion Topics
 A starting point…
 A framework
 Where does this fit in the IT planning system?
 Where you are… responses
 Open discussion
 Take away slides…
5/27/2010 2 Copyright: Crocus Hill Associates, All rights reserved

3. A Starting Point
Our old buddy Nicholas Carr:
IT is best seen as the latest in a series of broadly adopted technologies
that have reshaped industry over the past two centuries—from the
steam engine and the railroad to the telegraph and the telephone to
the electric generator and the internal combustion engine.
For a brief period, as they were being built into the infrastructure of
commerce, all these technologies opened opportunities for forward-
looking companies to gain real advantages.
But as their availability increased and their cost decreased — as they
became ubiquitous—they became commodity inputs. From a
strategic standpoint, they became invisible; they no longer mattered.
That is exactly what is happening to information technology today,
and the implications for corporate IT management are profound.
5/27/2010 3 Copyright: Crocus Hill Associates, All rights reserved

4. A Starting Point
Martha Heller – former Editor in Chief for CIO Magazine
Ten years ago, I started asking CIOs a question:
When you walked into your job, what did you find?
The answer, roughly 90 percent of the time: "I inherited a mess. The IT
organization had major delivery problems and no credibility with the
business."
A decade later, I am getting the same answer. How can this be?
Is every CIO I have ever spoken to an idiot?
Or, more plausibly, is there something so inherently problematic about
the CIO role that even the most talented and experienced leaders have
trouble making it work?
If this is the backdrop should we have an IT strategy?
Why and what should it be about?
5/27/2010 4 Copyright: Crocus Hill Associates, All rights reserved

5. A starting point
Carr:
In light of these Commoditization
of IT
two views:
What is ITs seat at the table?
Heller:  Are we a proactive partner or an
order taker?
Buried in support  Do we have control over our
and delivery environment or are we trapped by
legacy
Do our planning processes reflect
or drive that position?
5/27/2010 5 Copyright: Crocus Hill Associates, All rights reserved

6. A framework
What you do in High Factory Strategic
strategic planning Applications which are Applications / projects
critical to the business. which will be of future
probably depends
strategic importance
Strategic impact of
on how strategic
existing systems
IT is…
Support Turnaround
Applications which Applications / projects
improve management which may be of future
and performance but strategic importance
which are not critical
to the business.
Low
Low High
Strategic impact of future systems
Source: IT Strategic Grid. Harvard Business School, Warren McFarlan, L.J McKenney
5/27/2010 6 Copyright: Crocus Hill Associates, All rights reserved

7. What does it feel like to be in each box?
 Factory Mode  Strategic Mode
– Systems can’t fail for a minute – Systems failure causes immediate
– Decrease in response time loss of business
unacceptable – Decrease in response time impacts
– Most core activities online internal and external users
– Systems work is mostly maintenance – New systems promise major
– IT provides little strategic transformation and cost reductions
differentiation or dramatic cost – New systems will close gaps with
reduction competitors
 Support Mode  Turnaround Mode
– Service interruptions are acceptable – New systems promise major
– User response time is not critical transformation and cost reductions
– Systems are invisible to suppliers and – New systems will close gaps with
customers competitors
– Business can revert to manual – IT is more than 50% of capital spend
procedures – IT is more than 15% of corporate
– Systems work is mostly maintenance expense
5/27/2010 7 Copyright: Crocus Hill Associates, All rights reserved

8. Does your strategic planning approach fit the
position of IT in the company?
Respondent Respondent Respondent Respondent
1 2 3 4
Planning processes and documents
Do you have a formal IT strategic plan Yes Yes No No
Do you have a formal IT business plan Yes Yes No No
Are they the same? Yes No No
Do you have an IT Capex and Opex budget Yes Yes Yes Yes
Are they included in the Strategic Plan Yes No
Are they included in the business plan Yes Yes
Planning timelines
How often is the IT strategic plan updated Bi Annually Yearly Not done
How often is the IT business plan updated Ad Hoc Yearly Not done
How often are the IT Capex and Opex budget updated Bi Annually Yearly Yearly
5/27/2010 8 Copyright: Crocus Hill Associates, All rights reserved

9. Possible discussion questions . . .
 Does your strategic planning process reflect the position of
IT in your company?
 Would a change in the way you conduct planning make a
difference in:
– ITs’ impact on the business – could you make it more strategic if
you did something different?
– How IT is perceived by the business – would a change in planning
processes bring IT the recognition it deserves?
 Other?
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10. Take away slides
For reference …
5/27/2010
10 Copyright: Crocus Hill Associates, All rights reserved

11. A couple of definitions
 IT Business Planning is where we define the set of projects / initiatives
which drives or supports the business change agenda
– It’s the prospecting / mining exercise to determine what the business wants
or needs
– This is where we take the initial whack at ‘linkage’ and business case
development
– In theory this drives all the rest of the IT planning initiatives…
– In essence it is the ‘what and why’ for IT investment
 IT Strategic Planning is where we define how IT will do its business.
– What is the organization structure and governance
– What is the staffing and sourcing strategy
– What are the architectural standards and biases (build/buy, integrated / best
of breed)
– In essence it sets the constraints and biases on how IT will deliver service
5/27/2010 11 Copyright: Crocus Hill Associates, All rights reserved

12. Where does IT Strategic Planning fit?
Business Where does IT
Planning
strategic planning fit
IT IT
Drives Business Strategic
Planning Planning
Portfolio
Drives
Management
CAPEX /
Drives OPEX
Budgeting
PMO /
Drives Project
Planning
5/27/2010 Copyright: Crocus Hill Associates, All rights reserved
12

13. What kind of planning should we be doing?
 Support
– It’s questionable whether IT Business or Strategic planning is worth
the effort…
– Focus on service level management and OPEX budgeting
– Look at outsourcing strategy to drive cost effectiveness
– Keep eyes open and peeled for ‘glimmers of opportunity’ –
turnaround…
 Factory
– Focus on IT Strategic planning concentrating on service level
management, core process excellence (ITIL…)
– Drive Capex expenses for delivery improvement (high availability,
cloud etc.) and risk mitigation (Disaster rec., business continuity)
– Tighten down on OPEX but be careful about sourcing risks
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14. What kind of planning should we be doing?
 Turnaround
– Develop and IT business plan which focuses on portfolio
management, business linkage and provides the development
agenda to Capex budgeting.
– Develop an IT strategic plan focusing on the future support
environment, sourcing strategy, ongoing governance etc.
– Focus on changes in the support environment that will drive future
Capex investment (DR etc.) and OPEX changes.
 Strategic
– Consider building the IT business plan formally into the business
strategic plan. Tie investment to the businesses change /
improvement agenda. Build the linkage directly into their plans.
– Focus IT strategic plan on delivery excellence and risk mitigation in
same manner as Factory.
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15. For more information
Additions, arguments,
corrections or for a copy of
this presentation:
Contact us:
Craig Bickel
craig629@comcast.net
612 978 3737 – Cell
612 216 2403 – Direct
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