Neven Zitek I will start with a quote from Carl von Clausewitz: “Everything in strategy is very simple, but that does not mean that everything is very easy,” and personally, I couldn’t agree more. Most IT organizations are run by engineers who are accustomed to a practical way of thinking, i.e., focused on solving practical problems and gaining knowledge (and experience) on how to solve them. But, when they face simple questions like what is the objective of their organization, silence is the most common answer. In the best case, you may expect something like: “We run, operate, and maintain [insert technology brand / system here].” Strategic thinking is abstract and often requires you to leave your comfort zone, so get ready for the dive into the ITIL Service Strategy chapter and Strategy Plan.
But, before we dive into yet another part of the “A document you need, but probably don’t have” series, please read (if you haven’t already) this excellent article regarding the basic principles of Service Strategy: Strategy Management for IT Services – Holding your steering wheel.
4 chapters of the Strategy Plan
Figure 1 – Building blocks of a high-performance service strategy
IT Service providers should meet objectives defined by their customers’ business outcomes within system constraints. This, of course, implies that there will be some tradeoffs involved in terms of which services you offer, which markets you serve, and your ability to outperform competitors. The goal of a service strategy can be summed up as superior performance versus competing alternatives.
As shown in Figure 1, in order to set up a high-performance service provider, there are three major building blocks:
- Market focus and position – even if you run a Type I or Type II organization, this is how the “where and how to compete” aspects of a service strategy are defined. See the Strategic Position chapter.
- Distinctive capabilities – create and exploit a set of distinctive capabilities, which enable you to translate the “big idea” into a set of cost-effective capabilities. See the Strategic Perspective chapter.
- Performance anatomy – strategic assets, workforce productivity, performance measurement, and continual improvements are the key execution differentiation factors. See the Strategic assessment chapter.
Your Strategy Plan should reflect all of the listed building blocks in order to fulfill its purpose: improvement of the decision-making ability, tracking and measuring progress toward the long-term vision, objective evaluation of resources and budgets for the future, and delivering more value at lower cost by tightening up the execution model.
1. Strategic Assessment
As mentioned before, performance of your IT organization may be the single most important aspect of organizational characteristics and differentiators from your competition. Therefore, deep and objective analysis of performance, ability to measure it, and any strengths or weaknesses found should be contained within the Strategic Assessment part of the plan. This may include, but should not be limited to the following:
- internal and external environment (identification of opportunities)
- market spaces and strategic industry factors (market and customer potential)
- strategy objectives (simple list of your own objectives)
2. Strategic Perspective
Having a vision of what the company wants to deliver should give a better view of your business goals and objectives. By setting a perspective within the mission and vision, you can also cement your own distinctiveness in the minds of the customers.
3. Strategic Positioning
Your strategic position should reflect your projections in terms of what types of business you are going to produce, shall you compete based on value or low cost, will you provide a broad scope or specialized services, are you biased toward warranty or utility, etc.
4. Execution of the Strategy Plan
Once you set your Strategy Plan into motion, how will you measure execution and performance of set objectives? It’s important that the Strategy Plan consist of a pre-defined set of rules / measures that will track the progress (success) of set objectives and the measures taken in order to achieve them.
For complex systems, the popular balanced scorecard can be used.
How to create a successful Strategy Plan
A strategy is a plan designed to achieve a specific goal. By simply starting to work on your Strategy Plan, you’ll immediately be forced to think about things you commonly took for granted, or didn’t think about at all. This is a big step for every IT organization / company and may even shape the future of it. But, as the end result, it will give you clarity and a sense of purpose, and you should use it to evaluate all your future decisions.
There is always an element of uncertainty about the future; therefore, a successful Strategy Plan is more focused on the set of available options than prediction of future events. It’s said that it doesn’t matter what your plan looks like, as long as you have one.
You can use our free ITIL Gap Analysis Tool to plan the strategic development of your organization’s processes and functions according to ITIL recommendations.
