Strategic Planning | MANAGE RESOURCES

This section will not provide the process and details for developing an IT strategic plan. There are other texts that can provide this information. However, this section will outline the components that should exist in an IT strategic plan and planning process that are important to enable cost reduction in your organization.

Having a solid strategic plan helps a company quickly focus on where to reduce IT costs. It also identifies and prioritizes the ways that technology is used to enable cost reduction throughout the business. For IT, the plan is essential to get the company's infrastructure and application portfolio as a whole to a cost-effective state for on-going maintenance and support. The plan provides overall direction and priorities to help the entire organization make sure it is marching toward the end goal even in light of cost reduction needs and initiatives. The clarity and prioritization that the plan provides will set the stage for easier and quicker identification of needed cost reduction as both the business and IT will know what is important. The following are key components to use as a checklist or self-assessment for your IT strategic plan and planning process:

• The IT strategic planning process involves the business and is regular, rigorous, thorough, and complete.
• The IT plan identifies strategic business opportunities with a thorough review of the business direction and the industry; it is not just a list of requested projects. The strategic business opportunities include areas where the business is able to use technology to make cost reductions. Having identified these opportunities may actually help make the case to keep or increase IT investment as it is an enabler for cost reduction within the business. The plan will help identify how to make the business more agile to improve the ability to react when cost reductions are necessary.
• The IT plan clearly communicates the current IT situation and includes an objective assessment of strengths, weaknesses, opportunities, and threats in terms the business community understands.
• The IT plan outlines guiding principles that you use on a regular basis to evaluate options. Key business drivers are the foundation for the principles. Review these guiding principles when making cost reductions to ensure the reductions are in alignment with your principles and business drivers.
  Top Tip: Have an IT strategic plan

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  "Have an IT strategic plan in place before budgeting begins. Line up your budget over a three to five year time horizon. Use portfolio management and engage with the business to manage the demand."
  —Colleen Mlecoch
  Amherst H. Wilder Foundation

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• The IT plan includes a detailed plan, or roadmap, on how to get to the stated direction. The plan should not be only high-level glossy statements of direction but the specific prioritized projects and action plans. When cost reductions are required, go back to the prioritized projects and determine the impact in timing.
• The plan provides key IT metrics so you know where you want to get to and where you are on the path to the desired destination. These metrics are important when making cost reductions as you are able to ensure that you continue to provide value to the business and do not cut too much.
• You communicate the IT plan to all areas of the business and IT. When making cost reductions, it is important to communicate, discuss, and have common expectations. Conveying a detailed IT plan across the organization provides that basic understanding. As you start planning and making cost reductions, you are able to use the plan to communicate the impact of changes and reductions.
• Use the plan on a regular basis to determine direction; make sure it is not just a book on the shelf. Use the plan to identify cost reduction actions and determine the impact on your overall plan and direction. Having a plan as a framework will ensure that the organization does not get too reactionary in a cost reduction mode and cancel active projects that are critical for the strategic direction of the company.
• The applications, systems, and tools resulting from the plan are easy to use, meet the needs of the business, and provide key business metrics and information necessary to make business decisions.

After going through a cost reduction phase, be sure to go back to your IT strategic plan and update it based on your changes. The overall direction probably did not change substantially, but the timing to achieve some of the objectives and tactics may have due to cost reduction priorities. It is important to communicate and document these changes in expectations and plans.