Strategic CIO // Executive Insights & Innovation
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4/5/2012
08:45 AM
Nigel Fenwick
Nigel Fenwick
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Forget Alignment: How To Co-Create A Business Strategy

Creating an IT strategy "aligned" with business goals just makes things worse. Instead, use this framework to cooperatively create a business strategy with a technology component.

At a large U.S. insurance company, IT created a series of business capability maps as a framework for identifying, organizing, and designing SOA (service-oriented architecture) business services. The CIO and the chief IT architect realized that these models could be used to map each business unit to a common model and thus identify duplication, and map the specialized requirements of each unit. They took a three-step process to reorient joint business-technology planning around their capability map: validate the capability map with business executives, use capability-level business outcomes to drive discussions on how to improve, and tie both business and technology improvement ideas back to the capabilities model.

3. Feed Strategy Discussions With Data-Driven Insights

A key ingredient in the development and execution of the strategic planning process is finding and using appropriate data and insights--data that often lives outside of IT. Thinking broadly, this includes data on consumer behaviors, business executive priorities, and workforce productivity. IT needs to deliver these facts to help executives separate signals from noise with important technology-market driven trends like social media, consumerization, cloud computing, mobility, and more. Data that helps you understand your customer and workforce, identify and capitalize on emerging technologies, and identify staffing and sourcing competencies helps business technology strategists be proactive in supplying technology-supported changes to business capabilities.

4. Develop Multiple Business Technology Strategies

For any goal there usually are many possible ways to achieve the results. The aim of BTSP is to provide business leaders with informed choices between alternative strategies to achieve the business goals. The information IT brings to the table includes an understanding of the likely costs, risks, complexity, and timescale of strategies based upon knowledge of their underlying technologies and the available options for putting the technology in place. IT can also bring new strategy choices to the table that may not have been considered by others, often because of knowledge of emerging technologies that make new strategy choices possible. IT needs to provide business leaders with the guidance they need to make informed decisions between competing strategies.

5. Develop A Living Technology Road Map

After agreeing on the best high-level strategies, IT can begin the detailed work of building the BT road map with a more detailed technology gap analysis. Enterprise architects are important members of the strategy planning team, helping map the existing architecture to the future-state architecture. A gap analysis aims to identify the major architectural changes required in order to implement the BT strategy and validate the cost, risk, timescale, and complexity assumptions made during the strategy selection. If the assumptions turn out to be incorrect, it's up to the business leaders to decide if the strategy still makes sense or if an alternative would be a better choice. And because markets are constantly changing, business leaders must be able to constantly revise their strategy choices--this means that the roadmap must be a living framework--one that flexes and changes with the business.

6. Create IT To Support The BT Strategic Plans

The IT operating plan is a vital component of the BT strategic planning process. This is where the CIO determines how IT will function as a business unit--supporting and enabling the business technology strategy. Because this is a continuous process, the IT leadership team must continuously examine the IT capabilities needed to execute the BT roadmap. This isn't something done once a year and forgotten.

The co-development of business strategy is perhaps the most important responsibility of the CIO. Too often, CIOs delegate the development of "aligned IT strategy" to more junior team members as an annual activity. Instead, CIOs must lead the strategic planning process and take an active part in shaping future business strategy. As Stuart McGuigan, CIO at CVS Caremark, puts it, "There's no such thing as technology projects; they are all business projects with technology components."

Nigel Fenwick, a former CIO, is a vice president and principal analyst at Forrester Research, where he serves CIOs.

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pearl
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pearl,
User Rank: Apprentice
4/5/2012 | 3:36:46 PM
re: Forget Alignment: How To Co-Create A Business Strategy
HI, Nigel, very good article, well articulate the strategy scenario every organization need optimize, especially co-developing strategy via both business and technology will reduce the execution risks and avoid the pitfall when executing it. thanks
Jason Sharp
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Jason Sharp,
User Rank: Apprentice
4/19/2012 | 6:42:28 PM
re: Forget Alignment: How To Co-Create A Business Strategy
Thanks, Nigel, and I fully agree on a more meaningful alternative to "alignment". And I especially love the "living" reference on #5. Of course, it applies across the board, as a need to keep engaged and maintain momentum. That seems a key takeaway that is often ignored, as everyone in bigger orgs has a tendency to delegate and think it's covered (it's someone else's responsibility), but the consequence is the stall.

(had to chuckle, however, at McGuigan's soundbite--it sure sounds like a master/servant reference! :-)
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