Simplifying IT strategy: How to avoid the annual planning panic

For those companies operating on a calendar year, the end of summer signals the start of annual planning and the mad dash to prepare their IT strategies. Annual or not, like running with the bulls in Pamplona, this exercise never fails to test your mettle and often leaves you staring frantically at the page and wondering: how do I tell this story?

This year, before you open any slides, grab a notepad. Can you answer these seven questions? Your answers will lay the foundation for your strategy and highlight where your story needs work if you want to avoid fire drills in the eleventh hour.

What’s the vision for IT?

What’s your goal? To spend on technology and digital at a rate slower than that of revenue growth, enabling scale and simplifying your environment? To fully leverage your data such that you might build a more intelligent and automated enterprise? How will the company have improved for your customers once the vision is achieved? What about for your employees?

How will the vision be enabled by disruptive technologies like Generative AI, IoT, and Cloud? After all, each of these is part of your mandate, as a CIO, to optimize the organization’s digital potential.

Whatever the case, be sure this vision links clearly to the CEO’s strategic narrative and priorities. Borrow language from investor-day presentations and earnings reports. By linking your ideas to these materials, you’ll signal to the C-suite that you’ve done your homework. 

Why change now?

What market forces are creating a burning platform for change? Are your competitors gaining ground on the digital front? Are customer preferences shifting towards digital channels and experience? Are there upcoming regulatory provisions that will change the game? Make it clear that you aren’t strategizing in a vacuum. Build the case for future investment on real examples; the closer they are to home, the more likely they will drive action. Not sure where to start? Try your competitors’ publications. They’re typically overlooked and often an untapped source of insight.

What major challenges and risks stand between the current state and the vision?

If you’re like most CIOs, you have technical debt, talent shortages, a supply-and-demand imbalance of IT resources, and many IT capabilities immature enough to compromise your vision. Address these issues head on. Clarify how they will obstruct your achieving the IT vision and any overarching business objectives.

Does someone in the audience have an ax to grind with you? Disarm them early by putting their concern on the page. Some CIOs also use these presentations as a chance to remind their audience of the inherent complexity in the technical estate. They’ll drive home the point by listing the number of users, devices, geographies, applications, and vendors within their purview. 

What IT strategic objectives will move us toward the vision?

Think of strategic objectives as buckets of related projects that, collectively, will build new capabilities or alleviate problem areas. The CIO of one high-tech company, for example, envisioned making IT the great enabler of scale, which aligned with one of the company’s strategic objectives: to accelerate non-linear scale. Effectively, this objective was the wrapper for a group of projects that would integrate recent bolt-on acquisitions, standardize technology across BUs, and reduce manual processes through automation.

Aim to define three to five objectives that together envelop projects proposed for 2024, ongoing and new. Remember, too, that not all objectives will link directly to commercial endeavors. Some will be worthy but time-consuming ones that stand alone—for example, improving the employee experience, modernizing the technical estate, or changing the way IT works.

What projects are needed to advance the strategic objectives? And when will we work on them?

Your projects are how you achieve your strategic objectives and fulfill your vision. For each objective, identify which projects will continue from the current year and what new projects must be mobilized. Tell a cohesive and logical story: all of your projects should align with one of your strategic objectives. If a majority don’t, revisit them.

Also, don’t commit to more projects than you have capacity for. And beyond capacity, consider how much change the organization can stomach at once and reflect this in the sequencing of the roadmap. Explain why certain projects were prioritized over others.

How much will it cost? And what will we gain?

In developing your strategy, you have two responsibilities related to the finances of any proposed project: First, you must articulate the costs and benefits of the project; and second, you must contextualize those costs and benefits by comparing them to overall budget projections, which should include multi-year projections that align with the needs and norms of your finance organization.

Not sure how to frame the numbers? Borrow revenue projections from FP&A, then layer in projected IT run-rate spend, IT project spend for each year in the forecast, and summarize total IT spend as a percentage of revenue. Hint: Be ready to explain any increase in this metric.

How do we mobilize for execution?

What will you need from others for your plan to succeed? Dedicated resources from BUs and functions? Participation in steering committees? Incremental funding? The point is you can’t drive a transformation alone. Key to success will be clarifying roles and responsibilities and ensuring others have skin in the game. 

Bringing it together

Once you’ve tried answering the questions, consult your deputies. Test and refine your hypothesis as a group. Figure out where the story is strong and where it needs work. Devise how you will carry the planning effort across the finish line.

The principal challenge of annual planning is staying focused on the topics that matter. That means dispatching audience questions swiftly and persuasively so you can focus on storytelling.  Answering these questions will address the majority of questions your audience will ask and provide the ingredients to rapidly build an MVP that you can review with your peers, which is where the real work begins.