As technology becomes increasingly integrated with business, companies are demanding better and newer technological products, or solutions, to boost business performance, facilitate smooth operations, improve product delivery and enhance the customer experience. This has also caused the role of CIO to change in recent years, from one of process-centric IT leadership and a focus on cost-cutting to developing innovative, value-creating solutions for their company. However, even today, many CIOs are not invited to sit at the table when future vision for their companies is discussed. This may be due to the perception that IT’s primary role should be to resolve issues with existing technology, rather than the view that IT can be a hub for innovation within the company. Moreover, business executives outside of IT often fail to recognize that IT must balance the priorities of all other divisions in the company, in order to come up with its own prioritization of projects. As such, there is a lot of pressure on IT to deliver solutions in a timely manner and meet business expectations. Furthermore, many companies are better at defining corporate strategy than business unit or divisional strategy, as divisional heads often focus on execution rather than planning. This means that overarching corporate goals may not be translated into divisional goals and are not executed on throughout the company.
In light of the issues above, there are several steps CIOs and/or IT leadership will need to take, to ensure that IT is regarded as a key driver in their companies. First, the CIO needs to develop a strategic vision of how IT can deliver enhanced value to the wider company, as well as lead their departments to execute on this vision. In turn, IT needs to become much more connected with the rest of the company, in order to respond to, as well as understand how changes in the competitive landscape, industry or the company’s business priorities could affect IT’s priorities. However, this is not a miniscule task for any CIO or IT leader. Where should they start?
Metis Strategy’s Strategic Translation, Alignment and Refreshment (STAR) methodology provides an integrated and cascading strategic framework that helps CIOs and IT leadership address questions surrounding IT strategy. For instance, what does IT need to do to empower and enable the execution of corporate and/or divisional strategies? What does IT need to do on its own to generate value? Additionally, what IT projects are being funded and how do they relate to the strategic goals of IT and/or the business? The STAR methodology focuses on all of these questions, while providing a mechanism to align IT’s priorities to value-driven strategic imperatives. Firstly, the methodology suggests that strategic planning and alignment begin with the development or refinement of strategic objectives at the corporate level. The next step in the methodology is to translate corporate objectives into divisional objectives. After that, detailed tactics (i.e. executable actions) are developed for each objective. Then, success measures are developed for both objectives and tactics (referred to as goals and measures, respectively) to ensure effective tracking and monitoring. This framework is referred to as the OGTM (objectives, goals, tactics and measures).
However, it is important to note that the OGTM framework is not an IT-specific strategic framework, even though in our experience, IT strategy has proven to be an excellent use case for it. In fact, the OGTM framework can be applied beyond IT, to other aspects of a company. For instance, OGTMs that are created at the CEO level can be cascaded to, or linked with OGTMs at the divisional level, thereby ensuring that corporate strategy is baked into the entire organization’s strategic planning and executed on in a holistic manner. The methodology also proposes that separately, all of the company’s business and IT projects should be evaluated based on standardized criteria. Next, projects can be grouped into portfolios that are aligned to the corporate and divisional objectives that were identified by OGTM. Finally, portfolios can be prioritized across the organization for budget, resource allocation and decision-making.
Consequently, Metis Strategy’s STAR methodology can better position IT leadership and their departments to become better integrated with the rest of their organization, as well as take on a more influential role in driving company strategy. For both business and IT executives, the STAR methodology can provide a comprehensive and logical framework to address challenges around project and portfolio management, prioritization and resource allocation. Lastly, our STAR methodology assessment is designed so that it can and should be performed on a company multiple times, to ensure that as corporate objectives evolve, divisional objectives, goals, tactics, measures, and projects can be refreshed as well.
Metis Strategy has conducted STAR methodology assessments for clients across a wide variety of maturity levels and industries. For a sample case study on the assessment, please refer to www.metisstrategy.com/what-we-do. For further inquiries, please refer to Implementing World Class IT Strategy by Peter High.