template strategic plan_sample it strategic plan

8/11/2019 Template Strategic Plan_sample It Strategic Plan

1/33


2/33

Alexander Peters, Ph.D. Lewis CardinPrincipal Analyst Senior Analyst

Forrester Research

May 1, 2008

Sample IT Strategic Plan

A Complete And Effective Plan Can Be

Short And To The Point


3/33

3 Entire contents 2008 Forrester Research, Inc. All rights reserved.

Theme

An effective IT strategic

plan is designed to provideclarity to stakeholders andmeasurability to the CIO.


4/33


Attributes of effective strategic plans Relevant to stakeholders

Efficient covers just what is needed

Traceable from performance measures back tobusiness needs and drivers

Documents assumptions and rationale

Fits IT governance (decision-making, oversight) model

Broadly communicated

Has a direct impact on group and individual objectives

Creation and maintenance is a process, not a project

Document is living regular review and update

Tells a clear story

Just ambitious enough


5/33


Strategic plan commentary

For a commentary on this sample IT strategic plan,please see the May 1, 2008, Best Practices

Sample IT Strategic Plan report.


6/33


Alelewy a Uti l it ies Ltd.IT Strategic Plan

2008 to 2012

Alelewya Utilities (AU) is a diversified holding company forgas and electricity production and distribution,

headquartered in Western Canada, with subsidiaries acrossCanada and the United States.


7/33


Strategic plan outline


8/33


Strategic plan purpose and highlights

AUs strategic goal is to become the benchmark for quality and efficiency in theindustry.

This goal drives an integrated business strategy that spans hitherto separatebusiness divisions and markets through an integrated business strategyandone-company culture.

Delivering on an integrated business strategy is practically impossible if AUs ITorganizations (AU IT) functions continue to remain fragmented and deliver ITservices in isolation.

This plan describes how AU IT will address AUs outstanding strategicrequirements along three major initiatives, aiming to improve:

ITs overall efficiency and quality.AU IT plans to accomplish this goal byimplementing a corporatewide shared services organization that will be responsiblefor the delivery of integrated infrastructure services.

Support for consistent and optimized business processes.AU IT plans to do this

by consolidating application areas into three centers of excellence (COEs).

ITs contribution to business innovation.AU IT plans to implement several majorbusiness-sponsored initiatives: 1) an integrated retail data trust that will providesynchronized customer data, billing, and protections; 2) a unified finance system; and3) an upgrade of existing personal productivity through the selective use of Web 2.0technologies for collaboration and project management.


9/33


Strategic plan purpose and highlights

The audience for the strategic plan is:

Board of Directors, which ensures that investment in IT contributes to shareholdervalue

The CEO, who champions the integrated business strategy

The CTO, who sponsors the development of the corporate retail data trust andthe corporate green initiative

The CFO, who sponsors the development of the integrated financial controlssystem

The business unit (BU) executives, who leverage IT to achieve their own businessobjectives

The corporate and BU CIOs, who will use the strategic plan as the master plan forITs transformation

IT management functions line managers, architects, and planning andprocurement staff that ensure that ITs tactical and operational activities alignwith the strategic plan


10/33




11/33


Business goals and requirements

Business goals (compiled from

AUs business strategy):

High-level IT requirements related to

business goals:

Expand through organic growthand regional acquisitions

Have an integrated IT delivery model thatprovides scalability, flexibility, and rapidintegration

Be number one in customerservice and retention Have a single companywide view ofcustomer relationships and interactionsthat covers billing and settlement,metering and data warehousing, andmarket monitoring

Match the industry benchmark for

quality and efficiency

Offer more dependable, flexible, and

cost-efficient automated solutions andservices to the business

Have a one-company structureand culture

Enable consistent enterprisewidebusiness processes supported bycommon systems


12/33


Planning

AUs business capability model represents the business capabilities on

which AU business is based

Engineering

Sales

Gasproduction

Electricityproduction

Electricitydistribution

Corporate and shared capabilities

Finance andadmin.

HR LegalEnviron.

compliance

Corporate

comm.

Facilities

infrastructureIT

Customer service

Gasdistribution

Core value-add business capabilities

Marketing


13/33


Business needs by capability

Electricity distribution

Strategic themes:

Unique meter IDs that are linkedto customers

Improved interaction withcustomers

More customer protections

Drivers:

Risk of loosing customers or beingforced to rework duplicate customerdata

Aggressive competition gainingcustomer intimacy through newcommunication channels

Massive numbers of complaintsbecause of inaccurate billing

IT requirements:

New meters providing greater usageinformation

Online bill presentment and payment

Customer-driven ordering and serviceconfiguration

Customer portal providing informationon AU green energy programs

HR

Strategic themes:

Management and leadershipgrowth

Streamlined and efficientprocesses

A focus on personal

development

One corporate culture

Drivers:

Increased employeesatisfaction/commitment

Reduced turnover

Reduced employee relations issues

IT requirements:

Improvements to employeetracking/reporting (attrition, complianceonboarding and offboarding, payroll,benefits)

eRecruitment capabilities

eLearning capabilities Improved communication/collaboration

infrastructure


14/33




15/33


The IT budget as a percentage of revenue is 3.5%, while the industry averageis 2.6%. Also, the ratio of maintenance and operations to new investments ishigher than the industry benchmark (a 15/85 ratio versus a 30/70 ratio).

To-be budget and ratioAs-is budget and ratio

85%

15%

70%

30%

An independent study hasestimated the potential ofduplications caused by thefragmented structure and

system architecture to beabout 20% of the IT budget.

To become the industrybenchmark, AU needs toconsolidate the duplicationsand improve its new-

investment-to-maintenanceratio.

New

investments

Maintenance

operations

-20%


16/33


Planning

AUs as-is state of IT: several fragmented system instances and

infrastructures

Engineering

Sales

Gasproduction



Finance andadmin.

HR LegalEnviron.

compliance

Corporatecomm.

Facilitiesinfrastructure

IT

Customer service

Gasdistribution

Marketing

Multiple enterprise resource planning (ERP) systems divided bysubsidiary and business lines

Partially implemented ERP functionality Extensive customizations that increase the cost of upgrades Existing costs: Maintenance and support $xxM, development $xxM

Separate silos of customer information No visibility into entire customer relationships

No integration with salesand customer support

Multipleengineeringsystems

Redundant and fragmented infrastructures Existing costs: $xxM


17/33


Planning

AUs target application state: one-company systems

Engineering

Sales

Gasproduction



Finance andadmin.

HR LegalEnviron.

compliance

Corporatecomm.


IT

Customer service

Gasdistribution

Marketing

One-company ERP system

Comm on IT infrastructure

Common

engineering

system

Enterpr ise customer informat ion

The target application state has a goal of 80% or more common systems and processesand less than 20% customization for specific business lines or subsidiaries.


18/33


19/33


The target IT organization is a one-company IT an IT organization thatuses process-oriented centers of excellence to improve business efficiencywhile maintaining responsiveness and that is supported by a new OCIO thatprovides consistent planning and oversight and by a new IT shared services

organization that drives cost efficiencies.

Planning

Engineering

Sales

Gasproduction



Finance andadmin. HR Legal Environ.compliance

Corporatecomm.


Customer service

Gasdistribution

Marketing

IT shared services

COECustomer relationshipmanagement (CRM)

COEERP

COEengineering

Office of the CIO (OCIO)Consolidated enterprise architecture (EA), financial controls, project management

office (PMO), and IT supply management functions


20/33


Requirements for the new shared services organization (SSO)

Area Description

Services/clients A shared services model for all infrastructure capabilities and all architectural capabilities common

to the development of business-facing IT servicesManagement andorganization

A merged IT organization that is overseen by the new OCIO and that is solely responsible for:

Making technical architectural decisions

Procuring and managing and suppliers

Commissioning/decommissioning/promoting staff members

Structure andprocesses

Structure and processes that are tech-architecture-centric and that use best practice IT processes(such as ITIL).

Service lines andsystems

Will deliver the same services that the gas and electricity IT organizations deliver today

Separate IT organizations will transfer their equipment to the new organization.

Data centers (DCs)and platforms

Two corporate DCs: A (mainframe and systems) and B (open systems)

Staff number and

locations

316 full-time employees (FTEs) (86 FTEs less than today)

Estimatedoperations costs(yearly)

$53.3M annually or $17.6M per quarter (20.8% less than today)

Culture andvision

A new one-company IT SSO delivering services with at least the same quality level as todaysservices but with lower costs


21/33


22/33




23/33


Strategic principles summary

AU IT will use a shared services model for all infrastructure capabilities and all

architectural capabilities common to the development of business-facing IT services.

AU IT will enhance agility by improving its ability to anticipate and react effectively tochanges in the organization and/or the industry through better management of itsapplications portfolio.

AU IT will use a buy rather than build philosophy for noncore services unless abusiness case exists for an exception.

AU IT will embed governance processes into IT project approval, developmentdelivery, and operations processes and will manage these governance processesusing clearly defined roles and responsibilities.

AU IT will manage its operational costs to free up funds to reinvest in improvingcapabilities.

AU IT will invest in its staff members to maximize their productivity, motivation, andcontribution.


24/33


Strategic principle: scope of the SSO

Principle:

AU IT will use a shared services model for all infrastructure capabilities and all architecturalcapabilities common to the development of business-facing IT services.

Rationale:

This will create strong economics of scale and savings in the area of IT infrastructure.

Implications:

The SSO will cover the complete life-cycle support from solution evaluation and consulting servicesto architecture and standardization, build/assembly services, deployment, operations, support, anddisposal for the following infrastructure building blocks:

Collaboration and directory

Web

Systems management

Data management

Platforms

Networks

Security

Data center infrastructure


25/33


Jun e July Sept.Aug. Oct.Dec. Jan. Feb. Mar. Apr. MayProject

(architecture, portfolio, finance, organization) + (tracking, reporting, change, communications)

Data centersrelocation

Design

Sharedservicesorganizationaldesign

Relocation

Governanceand projectoffice

DesignTechnicalarchitecturesconsolidation

Optimization

Relocation and optimization

Process and org. design

ReviewReview

Program plan

Review

Business modelOrganization

FinanceHR


26/33


Road map for the implementation of the SSO

Q2Q1 Q3 Q4

Recommendation

Org. context

SSO

fully

operational

Finalization of project team

Definition of legal frame

Definition of HR rules

Structure and processes reorganization

Due diligenceperformed and tech.scenario defined

Go-decisionconfirmedby steeringcommittee

Budget 200X/Yandinvestment plan

Business case:

Services, org., costs

Scenario definition

Business value analysis

Implementationrecommendation

Go-decision

by steering

committee

Set up and planning of

transformation project.

Technical consolidation

Change

of

control,

start

operation

SSO

Development and negotiation ofservice-level agreements (SLAs).

The launching project needs to be fast, be sustained, and stay on schedule. The SSOshould be fully operational one year from now.

Definition of changemanagement program Implementation and communication


27/33


Governance and program structure for the implementation of theSSO

Steering committee

Program manager

Program office Architecture Controlling Communications Administration

Organizational change Structure Processes Skill Resilience

Technical projects Networks Platforms Middleware Data management Web services Collaboration Security Systems management Data center infrastructure


28/33


Tech consolidation project: sample project summary

Project management: Participating:

Point of departure/motivation: There are two mainframe locations within

AU.

Further staff reductions are only possibleby merging these into one location.

The technical basic conditions for aconsolidation are given (network,software).

The IT service contract between AU andservice provider is cancelled by Oct. 31,200X.

Activities and milestones: Technological conception in

implementation phase Q3, 200X Commissioning of network

connection Jan. 11, 200X Configuration of AU environment by

Jan. 17, 200X

General testing Jan. 17/18, 200X Implementation Feb. 28/Mar. 1, 200X Start-up monitoring until mid-April,

200X

Results: Business case ready-made Computer configuration installed Network ordered

Benefit: Savings of approx. $25 million

within the next five years $1.875 million already saved in

200X

Critical success factors/premises: Well-timed preparation of a service offering including

prices Determination of roles in cooperation Providing of migration costs (who, when, how)

Business case: Worked out and adopted

Savings contributions are fixed Migration costs of approx. $4.5 million

Project risks: Interference in existing contracts Very short timeframe Approval of this method by external software (SW) partners (SW

hitherto only for location A assured by contract) Cooperation with service provider

Resources: Internal ca. 600 FTE days External

Importance:veryhigh

Urgency:veryhigh


29/33


Progress report sample: SSO

1. Sponsorship and funding2. Organizational setup

3. Due diligence

4. Organizational consolidation

5. Technical consolidation

6. Data center relocation

Project plan/milestones Dec 01 02 03 04 05 06 07

1. Data center relocation2. Server consolidation

3. Reorganization

Projects: Critical success factors:

1. Executive sponsorship2. $6M investment

3. Availability of critical resources

Project:

Project teams:

SSO

Savings:

Target:

Realized:

Savings:

$800K$7.2M

$6M

200X

$14M

$1.5M

xx.yy.200x

= Milestone


30/33




31/33


Plan implementation

The ownership of the overall plan rests with IT planning within the office of

the CIO. IT planning will track and report on overall progress, issues, and issue resolution.

IT planning will manage communication of this plan to all audiences andstakeholders.

Each initiative has its respective business and IT owner.

These owners will be jointly accountable for achieving the target benefits of theinitiatives.

Business and IT owners will establish steering committees for their initiatives.

The IT steering committee will review progress against the plan monthly andreassess the plan semiannually to make adjustments.

The monthly reviews will focus on initiative progress and achievement of metrics.The specific metrics per initiative follow.

This plan will be updated annually, with the next iteration starting in June,200X.


32/33


The success of the IT shared services organization will be evaluatedagainst achievement of strategic objectives using the following metrics

Strategic objective Candidate metricsEnsure alignment Percentage of project aligned with strategy

Stewardship of the IT budget Actual budget versus planned budget

Improve user satisfaction Percentage of responses that meet SLAs

Improve user satisfaction Index from user satisfaction survey

Improve operational efficiency Operation and support cost per user

Improve help desk support -First pass yields-Cycle times

Improve availability Number of unplanned outages

Improve staff effectiveness Percentage of staff members meeting competency models

Improve employee development Percentage of staff members with personal developmentplans

Improve management capability Number of incidents resolved automatically


33/33


Appendixes

Business area strategies and requirements assessment

IT assessment details

Strategic initiative details

Architecture road maps

Other IT initiatives not related to this plan Multiyear resource and financial plan