Setting IT Strategic Priorities: Page 2

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Level III: Competitive Parity Plus

The focus of level III is improving the usefulness of applications to the business. Organizations operating at level III will have the following characteristics:

• The package or custom systems will provide full coverage of core front-office and back-office needs. The organization will be fully exploiting package capabilities, as well as using customization and configuration to create additional unique functionality.

• Additional helper applications for both administrative support and to augment the core front-office and back-office systems have been implemented – CRM, forecasting, HR support, etc.

• All applications are well integrated and have global access to common, non-duplicative lookup and transaction data.

• Overall applications will be industry or market leading through the incorporation of strategic, proprietary capabilities that are used effectively throughout the organization.

• Supporting systems infrastructure will be robust and redundant: effective disaster recovery, data center management, systems monitoring, configuration management, and systems management tools in place.

Level IV: Business-IT Alignment

At level IV, all IT decision making is made congruent with business priorities. This is reflected at across staffing, budgeting, project, application architecture, and O&I support answering questions such as:

• What hardware to purchase. • What staff to hire. • What staffing levels are set. • Which vendors to partner with. • How capital and operating budgets are deployed. • Which projects are done. • How many concurrent projects are appropriate.

The IT department will also have:

• Implemented an IT steering committee for governance and will be meeting with reasonable frequency.

• Developed mature project and demand management capabilities, ensuring the appropriate number and size of concurrent projects are underway.

• Implemented all important policies required, and has successfully complied with any relevant industry regulations or internal company requirements.

• A CIO with an effective relationship with senior management

• Periodic IT end-user customer satisfaction surveys consistently provide satisfactory or above ratings

• Staffing levels are industry appropriate with low turnover and higher-than-average skills

The challenge of achieving level IV for the IT department is understanding precisely what the business needs. Doing this requires a deep understanding of how the business operates and what the executives who are running the business care about. This in turn requires the CIO and IT department to have effective working relationships with the business users and to spend significant time with them. What many CIOs discover in attempting to align IT with the business is that there is often conflicting information and conflicting priorities within the business. One of the myths of business–IT alignment is that the business side of an organization has a coherent, well-defined strategic plan, and that if IT could simply understand it they will be on their way to level IV.

Level V: Setting the Agenda

Level V elevates IT from a model in which it exists to ascertain and then carry out the wishes of the business, to one where IT is helping the business by spotting opportunities to use technology and IT services to improve both IT and business performance.

Organizations that achieve the best value from IT has CIOs who not only understand and serve the business, but also combine that understanding with deep technology and application expertise to drive high ROI initiatives within the organization. In these companies, the CIO is a peer of senior management and a critical part of the executive team.

In Summary

We have found that our prescription is sometimes met with distaste by IT practitioners. Accomplishments at the base level of the IT hierarchy are often considered uninteresting, mundane drudgery. However, walking before you attempt to run is advisable in IT.

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