Strategic Planning an Inconsistent Practice in Most IT Organizations

September, 2023

Nearly all IT organizations have some sort of formal strategic plan. However, many could do a better job of implementing it consistently into their standard practice. This ad hoc nature of strategic planning means that companies are not getting the full benefit of the practice. As a result, their IT strategic plan may be out of date or lack sufficient details to guide day-to-day priorities, leaving the IT organization without a clear road map for the future.

Strategic planning is an IT management best practice whether the economy is favorable or facing headwinds. During a recession, a strategic plan or an IT road map helps prioritize which projects can be slowed or deferred. In times of growth, it provides a strategy for investing in projects that may span many years to meet long-term objectives. The process typically involves understanding the organization’s business strategy, assessing the gaps between IT capabilities and business needs, establishing overall objectives for IT, developing an action plan, monitoring and reporting the results, and revising the plan on a regular basis.

As shown in Figure 3 from our report, IT Strategic Planning Best Practices, 84% of companies practice some form of IT strategic planning, but only 26% do so formally and consistently. Another 15% are implementing the practice, and only 1% report no activity.

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IT organizations that lack a strategic plan risk becoming reactive and are unable to help their businesses cope with immediate challenges or seize emerging opportunities. At worst, the organization may only make insignificant changes. A plan can be especially important for guiding IT organizations through periods of technological change.

“It is difficult to imagine how an organization can respond without IT strategic planning,” said Waynelle John, research analyst for Computer Economics, a service of Avasant Research, based in Los Angeles. “A plan that is formally and consistently updated will allow organizations to respond to business changes.”

The perceived acceleration of change might make the idea of a multiyear plan seem quaint, as CIOs are being asked to deliver everything swiftly. IT departments are required to be more agile and responsive than ever, and some may view an IT strategic plan as something etched in stone and counter to agility.

On the contrary, when done correctly, a strategic plan is the best defense against unrealistic expectations. An IT strategic plan that is developed in collaboration with the business side of the company is a valuable tool in evaluating a new request. CIOs can now consider where it may fall on the road map. Of course, the plan can always be revised, and business leaders may decide to go forward with an initiative that is not on the road map. But if there are resource constraints, another initiative may have to be deprioritized. Without an IT strategic plan, it is too easy for the CIO to be the one who always says “no.” Having a strategic plan encourages business leaders to face trade-offs.

In the full report, we describe the fundamental components of an IT strategic plan, assess current adoption trends by organization size and sector, and provide recommendations to make IT strategic planning more effective.

This Research Byte is based on our report on this subject, IT Strategic Planning Best Practices. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).