building a strategic it plan

8/7/2019 Building a Strategic IT Plan

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Building a Strategic IT Plan


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Understand Your Company's Needs


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Understand Your Company's Needs

Goals and ObjectivesDefinition of Goals and Objectives

Goals are long-term aims that you want toaccomplish.

Objectives are concrete attainments that can beachieved by following a certain number of steps.

Goals and objectives are often used interchangeably, but

the main difference comes in their level of concreteness.Objectives are very concrete, whereas goals are less

structured.


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Mission statement

Organisational objectives

Core competencies for the organization

Key performance indicators Business strategies

Organisational structure

Managerial and employee competency

Job description Individual objectives

Action plans

Performance appraisal

Individual performance gap review Succession planning

Individual development plans

Employee training

Recognition, reward and remuneration


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Competency Level


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Definitions - Strategy

a word of military origin, refers to a plan of

action designed to achieve a particular goal


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Definitions - Information Technology

As it pertains to technology, Information Technology (IT) is the"technology" used for the study, understanding, planning, design,construction, testing, distribution, support and operations of software,computers and computer related systems that exist for the purpose ofData, Information and Knowledge processing.

As it pertains to industry, Information Technology (IT) is the "industry"that has evolved to include the study, science, and solution sets for allaspects of Data, Information and Knowledge management and/orprocessing.

As it pertains to organizations or organizational structures, InformationTechnology (IT) is the organization in an enterprise or business that is heldresponsible and accountable for the technology used for planning, design,construction, testing, distribution, support and operations of software,computers and computer related systems that exist for the purpose ofData, Information and Knowledge management and/or processing.


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Definitions - Plan

A plan is typically any procedure used to

achieve an objective. It is a set of intended

actions, through which one expects to achieve

a goal.


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Definitions - Strategic IT Plan

A strategic plan is a long term plan that is

relevant to the current company needs and

situation. The objective of developing a

strategic IT plan is to define a vision of whereyou are headed and the approximate timing

and cost to make it happen.


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IT Strategic Projects

Cash flow

Profitability

Productivity Gaining Market Share

Significant differences in the way we conduct

business Significant client service enhancements


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IT Project Hierarchy
http://itlf.org/files/2010/04/pyramid.png


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Return on Investment


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What is appropriate for your company

Company A

100 Million

Company B

100 Million


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Or Does it?

Look at Company A Closely

Has grown incremental sales of new business

Significant investments in automation

Billing costs 3% of total revenue 25 days average collection


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Or Does it?

Look at Company B Closely

Growth through acquisition

Very little progress in automating billing

processes

Has 3 separate billing and collection

organizations in separate cities using different

technologies

Spends 5% of revenue on billing

80 days average collection


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Opportunities

Company A

_____________________

_____________________

__________________________________________

_____________________

_____________________

_____________________

_____________________

Company B

_____________________

_____________________

__________________________________________

_____________________

_____________________

_____________________

_____________________


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Opportunities

Company A

Improve billing

Electronic payment

MIS

Positioning for

acquisition

Automate reporting

Company B

Assimilation

Electronic billing

MIS

Automate reporting


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Foundation is Important

Establish your change processes

Fill skill gaps in the organization

Create project management disciplines Focus on your infrastructure so that you have

stability and scalability for growth

Address significant functionality issues in yourbusiness applications required to maintain

current business processes


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How high can you go?

Company capabilities that are dependent ontechnology

Automation opportunities that improve profitability orcash flow

Functional technology gap filters important forpositioning the company

Opportunities that differentiate the company

IT services required to support the future company The IT organization required to support the new

business


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What is needed in technology to

support the companys growth plans ?

If plans are to acquire new companies, youwill need IT due diligence knowledge

as well as project management skills for

assimilation. You will also need to have infrastructure capability to add large chunks

of people at a time to your networks.

If you are adding new software product lines,you may need additional application experts,programming, and support resources.


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What are needed capabilities to help the

company achieve its financial objectives ?

You want to understand the IT expense as a per cent of revenueexpected. Rather than being driven by senior management, itsbetter for the CIO to understand the dynamics of this number andto drive an expectation with senior management as to what toexpect.

Quantify key internal department needs that helps them achievesupportive financial objectives for the company.

Quantify key initiatives that allow IT and other companydepartments to support company growth in a manner that allowstheir department to grow at a slower rate.

Quantify key issues related to outside clients that help the company

retain clients, increase clients, or increase sales to existing clientswhile maintaining a relatively constant IT expense.


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Identify automation projects that improve

the companys profitability or cash flow.

Quantify all projects that replace manual

processes with an automated process.

Discussion on ROI (Return on Investment) will

come later.


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What are the projects that can differentiate the

company from competitors?

Talk to senior management, step out of the

box, and concentrate on concepts that would

make you want to buy stock in the company.

Things that are innovative, progressive, costeffective, valued by clients, etc. are areas that

youre looking for.


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Quantify key gaps in IT services or

application functionality needed ?

For the company

For internal departments

For external clients For new sales


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Are there assimilation opportunities to

eliminate redundancy ?

Elimination of redundant technologies

Elimination of duplicate departments

Elimination of duplicate processes


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Are there key cost leverages in IT ?

Large distributed wide area networks often havecost savings opportunities.

Reviewing long distance phone bills for

distributed office environments usually has costsavings opportunities.

Eliminating organizations that do not complimenta companys core competency can have large

benefits. Standardizing equipment purchases might have

cost savings.


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Are there major employee productivity

gains through innovation of technology ?

IT quality improvements

Department productivity improvements

through automation


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Can certain improvements eliminate waste,

bad debt, or lost sales ?

Identify all items that achieve greater

profitability


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Back to A & B

$100 Million

1000

$12 Million (12%)

1

1

75%

$3 Million

25 Days

$100 Million

1000

$7 Million (7%)

3

3

5%

$5 Million

80 Days


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Strategies

1. Improve Electronic Billingto 90%

2. Develop electronic processfrom insurance carriers

3. Develop enhanced MIS

4. Integrate scanning andimaging technologies

5. Position It organization foracquisition and duediligence assimilations

6. Implement a companyautomated reportdistribution system

1. Assimilate the 3technologies

2. Develop electronic billingfor 70% of the business

3. Implement a companyautomated reportdistribution system


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Backward or Forward

Insure your plans and objectives are

consistent with the companys needs

Major projects must be justified or have a

tangible value to the company.


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Defining Key Milestones

Technology Assimilation Initiative

Technology 1

Technology 2

Technology 3 Billing Automation Initiative

Clearinghouse #1

Clearinghouse #2

Major Payer A

Major Payer B

Major Payer C


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What are the prerequisites


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Quantify needs for each strategic project

Staff

Budget

Other resources


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Staff


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Budget


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Other Resources


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If your doctor told you that you had a viral

upper respiratory infection which resulted from

inflammation of the mucous membranes of the

nasal cavity


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What is the critical path?


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What is the critical path?

Technology Assimilations Initiative Technology 1

Technology 2

Technology 3

Billing Automation Initiative Clearinghouse #1

Clearinghouse #2

Major Payer A

Major Payer B

Major Payer C

Automated Report Distribution Initiative P&L Distribution

Revenue Reports Distribution


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Define Project Timeframes

Break 18 to 24 months into 3 month periods

Break 36 to 48 months into 6 month periods

Be realistic

Allow room for uncertainties


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Time frames


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Your MD wants you to get to the point

He needs the answer

Very little detail

Clear benefits

Costs

Risks

Implications if the project is not done?


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Picture Story


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Picture Story


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Present the plan

Objectives

Create awareness of the major initiatives

Gain validation from senior management

Create awareness of dependencies

Create awareness of size and complexity of plan

Gain agreement top go forward


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Present the plan

Return on investment

Objective

Benefits

Estimated cost and payback

Estimated time frame

Payback period = Total Cost/Net Monthly Savings


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Meeting Concluded

Brilliant Meeting

Now the work starts


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Questions

building a strategic it plan

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