Monday, August 24, 2009

The Need for Strategy

In a study, it was determined that the area of strategy within IT organizations and for that matter even non-IT organizations) is the most undeveloped and under-utilized with the greatest scope of improvement and realizing benefits. I have certainly found this to be true in my own career and dealings with various organizations.

The word strategy instantly brings to mind the concept of long-term planning. A highly reactive response to solving a customer’s immediate problem as quickly as possible is not a strategic activity. However, deciding what new products and service to introduce 3 years down the line is an example of strategic activity. What I have noticed too often in the past is that organizations get into a constant state of firefighting and reactive problem solving which results in adequate strategy never being realized. It is up to management to ensure that sufficient resources are dedicated to strategic activities and kept free of the day to day firefighting tasks.

Strategy is important because it provides the initial roadmap or path to the organizations long term goals and objectives. A wrong decision taken in the initial plan can have disastrous consequences in the long term. Furthermore, possible risks and downturns need to be evaluated and accounted for in the future planning. Over and above all this, the strategy team should evaluate the current products and services and the customer’s happiness with respect to them and make course corrections based on this as necessary. Therefore, it is apparent that the strategy step is crucially important and should not be neglected.

So now that we are convinced of the importance of strategy, how do we go about strategizing? The different areas of strategy, in my opinion, can be broken down to three main components. Understanding of your organization (which includes current products and services, resources and capabilities etc.), understanding the customer (demand patterns, market conditions etc.) and financial information (including Budgeting, Accounting and Charging). These are found in the ITIL body of knowledge as the Portfolio Management, Demand Management and financial Management processes within the Service Strategy Module.

Therefore, with the information needed to adopt strategy for IT services being readily available, there is really no excuse for the implementation of poor strategy. All the greatest generals in history, considered strategy the most important part of their military campaign, beyond even the number and strength of their armies and the technological sophistication of the weapons being used. Indeed, Napoleon Bonaparte won numerous battles simply because of his superior strategic planning. In the battlefield of business, the implementation of correct strategy will ensure economic victory.

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