REAL WORL CASE Forrester, NMSU, Exante Financial Services, and Others: Getting R
ID: 417199 • Letter: R
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REAL WORL CASE Forrester, NMSU, Exante Financial Services, and Others: Getting Real about Strategic Planning Michael Hites knew the lack of vision at New Mexico where IT and the business are so tightly State University (NMSU) would be a challenge. "If you can harely tell the two apart In such compa- don't have the highest level plan in place, even the best IT to be the CIO of a FedEx, or a GE, or a ligned y laders understand that IT is a strategic asset strategic plan won't work," explains Hites I've seen it I've lived it." When he became CIO in the majority of his time on the Big Pic-2003, NMSUs plan was no different from any other school's If one works in that kind of IT Wonderland, getting a So Hites's first IT strategic plan was standard and risk-averse sach. These are places where the CIO is IT plodded along doing good work but nothing particularly strategie plan down on paper is probably a snap. The vast majority of CIOs, however, work in places where strategic. In the absence of a more ambitious university plan, business itself may not have a clearly articulated strategy. there was nothing to anchor a real IT strategy, says Hites. "If corporate leaders don't care too much for you stick your neck out lin that environmentl, the university In such companies, , e ch less value it strategically. These are places where the is devoured by day-to-day opcrations and theres left to look beyond the next few months. If one lives aih chat kind of tactical IT reality, getting a good strategic may or may not be behind you," he notes. Then a funny thing happened. After several years of For most Cio is practicaly engod For most CIOs, putting together an IT strategic planechnology bugging people about the lack of a strategic plan for the uni- versity, Hites was put in charge of strategic planning for the entire university and naned vice president of planning and plan down on paper is practically impossible. Hites and his team have lots of great ideas-about S15 and beyond-is dauntingly hard. Although the odds may be million worth of them, he says-but his organization is stacked against the average CIO, the truth is that those IT funded to the tune of half a million a year. The question lcaders who don't master the art of strategic planning won't he's faced with each year is "how to spend that little bit to do lust long. "The parpose of the IT strategic plan is to improve something strategic. If the university has the 'mom-and- the business-IT relationship. A CIO needs it to communicate apple-pie' strategy of helping students succeed or 'increasing hat anqual road map to guide IT through the next 12 months witch the business, to tell them that he understands the com- rescarch,' anything you do is going to foster those objectives. needs and to set expectations," says Alex Cullen For rester Research vice president and research director And you can never be sure you're making the right doc s But if a university steps out on a limb and says, "We will have A CIO can't succeed without it." Michael Jones, CIO of best online education program in criminal justice in world, the National Marrow Donor Program, calls it "the business then that becomes the strategic focus," says Hites. The cardinal rule in developing an IT strategy is to connect it to the business strategy. "The business should have desired outcomes-market share gains, higher cus- tomer satisfaction levels, shortened cycle times," says inde- It can be appropriate for the CIO to help push business along in terms of strategy," says Forrester vice president and principal analyst Bobby Cameron. That doesn't necessarily mean the CIO takes on a second full-time job. When Kelly Clark joined Exante Financial Services, pendent IT analyst Laurie Orlov. "TT has to figure out financial services provider for the health care industry, he ehere they factor into that." Yet for all the whining CIOs have had to endure about how IT needs to be more strate- wanted to change the IT strategic planning process "Generally, it's done at the end of the year," explains os, the businesses they support are often in even more dire Clark. "You look at the budget, see you have X number of trategie straits. Businesses very often don't have a strategy. dollars, and figure out what you can do. Its reactive." Clark do, but it's very high-level and vague. Or they re- wanted a proactive process, a "business overlay that said, erve the right to change it. Or they have some strategies, here's what the market is looking for, here's what we have, they don't apply to all the business activities taking here's what we need."Exante had a business place," says Forrester's Cullen. process but no business and systems strategy, so his CEO and CFO organizations are they needed one and they bought it. the hook, right? Wrong. "It's the ultimate cop-out for "So off we went," says Clark "We created an to say they can't do an IT strategy because the busi- tegic plan and IT became a piece of that." ess doesn't have an articulated strategy," says Bethesda Lutheran Homes and Services (BLHS), . Orlow. Fuzzy foot at as an opportunity."People in the business are very and research director for Gartner Executive einet win and how IT fits into that. Then you go from just goals present a challenge, but smart CIOs should faith-based provider of services for individuals with develop- on operations or other minutiae," says Dave Aron, ganizational strategic plan when Brian Tennant became its II can help the business articulate what will generic: Be the best and grow by this amount, recalls Ten- mental disabilities, was a couple ofyears into CIO·The plan, however, was strategie in name only. "It was nant. "But it was unclear why they picked the growth tn order taker to actualily influencing overall strategy mumber or how they would measure it. And they hadnYExplanation / Answer
Case Study Questions
Answer1:
As mentioned in the case study, the business strategy does not have a clear guidance or an IT strategy. As discussed IT in these organizations which are not IT based like GE or Fedex where business and IT strategy are aligned closely. In most of these organizations where IT is critical, the CIO also plays the role of company strategist. He might make the plan for the business and IT relationship. Most other organizations IT has only a supportive role and tags to the strategy planned for the business. Over a period of time most businesses think to gain bigger market shares and achieve higher customer satisfaction, IT strategy has to be developed to connect with the business. Unfortunately some big business houses don’t even have a business strategy. They just have a loosely held plan which they follow with mild modifications year by year.
Answer2:
Yes, it is possible get by without any clear or strategic planning as some of them are a century old and follow the old tried and tested methods of working. Most businesses are so involved with the day to day activity that they don’t have a plan even at the top level, as discussed of the new Mexico State University, Hites CIO was allowed to make the strategic planning after years of begging the organization to come up with a plan, normally the budget allowed for IT is so miniscule that it barely covers the maintenance of the existing IT setup. It tells us that business and industry is risk averse and would prefer safe strategies. The tried and tested methods if are still getting them desired results, they would rather continue with the same with minor fine tuning. The need for huge change in strategy is normally pushed by change in law or competition behavior.
Answer 3:
It is rightly stated by Dave Aron of Gartner that the real role of IT is when there is no clear business strategy. The IT leaders can step in and share ideas and plans with the budgets of execution and expected profitability. We are all aware today that IT intervention can make organization customer friendly and increase market reach easily, good examples are banking sector, online marketing, etc.
The downside of increasing the IT leader intervention in the business strategy is that he might not have a good overview of the business needs. He might make the strategy without adequate research or knowledge. Thirdly, they are normally highly trained technical people who might insist on IT intervention at every stage of business.
Answer 4:
It is clear that IT success is dependent on the overall business strategy of an organization. The business strategy is normally covering overall growth, development and changes required in the organization, this includes all resources including manpower, capital, finance, etc. It encompasses the need to revise our four Ps in marketing as per changing market demands and to reach our customers and get their feedback at the earliest, this is in todays world easy as the technology has become so sleek that we can get information across the globe in seconds. This is only possible if IT and business strategy are closely knit. Eg. To make a tire natural rubber comes from Malaysia, carbon is bought from China and product is sold in Europe. This entire chain is completed several times every month by every organization. All activities of buying and selling are supported by IT team. Hence it is clear that business strategy can succeed only with necessary IT strategy.
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