New Directions in IT Strategic Planning
- What Is Strategic Planning?
- New Strategic Planning
- Final Thoughts
- References
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What Is Strategic Planning?
For years, in most corporations, it was a regular annual task for a team of management personnel to produce a report for the board of directors and senior managers of the corporation, who would generally approve it. The team would produce scenarios of one or two years, and often project out to five or even ten years. Examples of companies that had negative experiences with such large-scale, formal strategic planning operations include General Electric, Texas Instruments, General Motors, and IBM—each of which, in various ways, was hobbled by "lead boots" and "paperwork bogs" that hurt innovation and responsiveness. By contrast, a number of corporate success stories—including Wal-Mart, Nike, Microsoft, Dell, Honda, Gap, Southwest Airlines, and 3M—found notable success through approaches that were much less rational.
As strategic planning evolved, terms such as top down and bottom up were introduced as techniques. Planning involved such notions as strategic niche, competitive position, shareholder values, SWOT analyses, and core competencies. From the 1980s and into the early 1990s, the visibility of planning continued to increase. By the late 1990s, planning had become a mainstreamed necessity as the pace of technology quickened and then the Internet became a commodity. Certainly, most corporate management by now had come to believe that strategic planning represented basic and essential business practice.
NOTE
Others made light of the subject, however. Tom Peters, for example, [1] treats strategic planning and other management trends such as TQM, reengineering, and the learning organization as "death by a thousand initiatives."
There are many definitions of strategic planning, but I particularly like this one: "Strategic planning is the process by which the guiding members of an organization envision its future and develop the necessary procedures and operations to achieve that future." [2] In other words, strategic planning is a process for taking us from where we are to where we want to be. When done well, it creates a shared vision of the future among members of an organization.
The purpose of strategic planning is to transform the organization. Done well, strategic planning helps leaders to do all of the following:
Create their own organization's future
Provide a framework and a focus for improvement efforts
Optimize organizational systems and processes
Provide guidance for day-to-day decisions and operations
Provide a means for assessing progress, productivity, and profit
Project a corporate future and technologies that should be used
Pitfalls and Perils of Strategic Planning
Several pitfalls are associated with strategic planning. The plan may not turn out as well as expected because of changes in the environment in which the plan is supposed to operate. Strategic planning is also worthless at getting an organization out of a major crisis. This is where disaster planning comes into its own. A crisis is a current problem not solved by a strategic plan. And if the planning process itself is weak, the resulting plan may be weak and unsatisfactory.
Some observers have questioned whether strategic planning is a useful tool or just an elaborate management fad. IT strategic planning—at least in terms of how it has at times been conceived or implemented—has been criticized for all of the following:
Being too linear or static
Relying too heavily on available hard information
Creating elaborate process mills or stovepipes
Being too formalized and structured
Ignoring organizational context and culture
Discouraging creative, positive change
Accelerating the Pace of Business
Speed typifies our way of life, our work, our society, and our future. We lead a hectic, frantic lifestyle at home and work. Everything around us seems to be moving fast, and we're required to move at the same pace as others—or worry about the consequences. Computers, networks, mobile phones, pagers, and the Internet feeds on this lifestyle. Technology has a rapid heartbeat. Our ability to live, work, and play at this pace can give us a sense of power, a buzz, a feeling of exhilaration similar to what our ancestors experienced in the heat of battle. Some of us thrive on it; others don't.
No one can deny the acceleration of business life in the last 50 years—since the evolution of the computer and its associated technology. Psychologists have termed this behavior "Hurry Up Syndrome." Transported and transformed by the Internet and global commerce, we've entered the "Now Economy," an ever-changing era in which the customer is king, the global marketplace is the kingdom, and wired businesses everywhere are subject to 24/7 demand for constant information, customized products, and instant electronic transactions.
Users, engaging in Internet time, have come to expect instant access to everything, everywhere. They want access to data/information, and they want simplicity, flexibility, value performance, and choice. In general, enterprises want a competitive advantage and an appropriate return on investment. CIOs want to lower costs, flexibility, manageability, and security. As a result, enterprise computing is undergoing rapid and continuous change.
Welcome to the world of "Internet speed" or "warp speed." The crush of new technology descending on the workplace—designed to provide quantum leaps in productivity and improve communication—is leaving many people alienated, disoriented, and burned out. Bombarded with information, data, and deadlines, many individuals aren't sure how to cope. Corporations are not much better off. As competition escalates and pressure builds, many corporations believe that they must respond with increasing speed to stay in the game. Customers, employees, and managers continue to develop expectations about doing business with organizations through the Internet—at Internet speed. For some, it's an absolute necessity. Unfortunately, the technology often moves faster than the ability of people or corporate cultures to adapt. While it's tempting to blame this problem solely on technology, the issue is as much about work habits, time management, corporate culture, and human resources practices. Unless people take control of the technology and learn to manage it, they're likely to find themselves managed by it. But at many companies, there are simply too few rules.
To stay competitive and continue to produce profits, corporations are shortening processes, products, salaries, and services—everything in sight. They've shortened product lifecycles and aim to introduce products faster than their competitors can. Manufacturers strive to lower costs and increase market share by implementing just-in-time inventory control. Faster product development is essential; speed kills the competition. In the automobile industry, new cars used to take years to get to the showroom floor; now they take just months. In the semiconductor industry, chips are produced, manufactured, and delivered in days.
There is one fundamental enabling factor in all this fast product development and implementation—the computer. Without adaptable, flexible computer systems, such "Internet speed" or "warp speed" is impossible.